We recently compiled a list of the 10 Best Tobacco and Cigarette Stocks to Buy Now. In this article, we are going to take a look at where Tilray Brands, Inc. (NASDAQ:TLRY) stands against the other Tobacco and Cigarette stocks.

Cigarette and tobacco stocks are companies that produce and sell cigars, snuff, chewing tobacco, cigarettes, e-cigarettes, and all other tobacco products.

The tobacco industry has long been a huge winner for investors. Tobacco companies were among the top performers during the 20th century because of their reputation for providing investors with substantial dividend yields as well as their addictive, extremely profitable, and recession-proof product. However, tobacco firms now confront a different set of challenges. Globally, smoking rates have been progressively declining, particularly in the United States, as a result of growing legislation and health concerns. The industry has attempted to shift to next-generation products as a result. Some people believe that e-cigarettes, vaporizers, and chewable nicotine pouches are healthier options since they avoid some of the negative aspects of smoking cigarettes, such as unpleasant odors. Some companies are expanding beyond tobacco, working with cannabis businesses to capitalize on the potential development in a market that shares numerous similarities with tobacco. There are other hazards associated with tobacco stocks, such as heightened regulation and a decline in smoking rates.

According to the Centers for Disease Control and Prevention, the number of tobacco farms in the United States decreased from 93,530 in 1997 to roughly 3,000 in 2022. Nonetheless, the USA was the world’s fifth-largest producer of tobacco in 2021, harvesting 431.6 million pounds in 2022, compared to 1.74 billion pounds in 1997. Seventy-seven percent of U.S. production came from North Carolina or Kentucky. Price reductions accounted for $5.7 billion (72%) of the $8.6 billion tobacco businesses spent on advertising in 2022, which included $572.7 million for smokeless tobacco and $8.01 billion for cigarettes. Marketing costs for e-cigarettes came to $859.4 million in 2021. Sales of cigarette packs fell from 12.5 billion to 9.1 billion packs between 2015 and 2021, a 27% decrease. In 2024, the average cigarette tax in each state was $1.93, while the federal tax was $1.01.

Despite the industry’s weak revenue and profit development, investors continue to be drawn to these stocks due to their consistent dividends, profitability, and solid profit margins. Investors believe that stronger growth will eventually be catalyzed by next-generation products.

However, on April 2, 2025, the U.S. Supreme Court upheld the FDA’s decision to deny approval for flavored e-cigarettes in a major decision. According to Justice Samuel Alito, vape producers were given “adequate notice” of the FDA’s review criteria. In this case, businesses like Vapetasia and Triton Distribution applied for certification for products such as “Mother’s Milk and Cookies” and “Killer Kustard Blueberry.”

The FDA has been regulating vaping products since 2016, claiming that flavored vapes represent a health concern and may encourage young people to use tobacco. More than 2.1 million youths in the US reported using e-cigarettes in 2023, with 10% of high school students vaping. The FDA has rejected thousands of flavored products and has only approved tobacco and menthol flavors. One specific issue, marketing plan consideration, was returned to lower courts after the Supreme Court reversed the 5th Circuit’s prior criticism of the FDA’s changing criteria. Companies that promote unapproved products risk “civil and criminal penalties,” the FDA warned.

A laboratory with white-coated technicians carefully measuring out cannabis extracts.

Our Methodology

For this article, we sifted through the online rankings to form an initial list of the 15 Tobacco and Cigarette Stocks. We have also included e-cigarette and cannabis companies. From the resultant dataset, we chose 10 stocks with the highest number of hedge fund investors, using Insider Monkey’s database of 1009 hedge funds in Q4 2024 to gauge hedge fund sentiment for stocks. We have used the stock’s market cap as of April 25, 2025, as a tie-breaker in case two or more stocks have the same number of hedge funds invested.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).

Tilray Brands, Inc. (NASDAQ:TLRY)

Number of Hedge Fund Holders: 19

Market Cap as of April 25: $496.16 million

Tilray Brands, Inc. (NASDAQ:TLRY) is a Canadian company that grows and markets cannabis for both medical and recreational purposes. Through a reverse merger, legacy Aphria purchased legacy Tilray in 2021 and changed its name to Tilray. Canada and the global medical cannabis export market account for the majority of the company’s sales. CBD products and alcohol are the primary sources of exposure in the United States.

In Q3 of 2025, the firm’s cannabis gross margin increased by 800 basis points year over year to 41%, the highest level in over two years, showing increased profitability. Significant international growth was also recorded by the company, with revenue rising both quarter over quarter and year over year in major markets, including Germany, Italy, Luxembourg, and Portugal. Furthermore, Tilray Brands, Inc. (NASDAQ:TLRY)’s sales of medical cannabis flowers in Germany soared by 79% after legalization.

In Q3 of 2025, the company advanced its Project 420 cutting expenses drive, increasing the target to $33 million and attaining $20.6 million on an annual basis. Tilray Beverages produced $55.9 million in net revenue in the beverage category, with gross margins climbing to 36% from 34% in the same quarter last year. Tilray Brands, Inc. (NASDAQ:TLRY) strengthened its financial position by holding $248 million in cash and marketable securities and lowering its net debt to about $50 million, making it among the Best Tobacco Stocks.

Overall, TLRY ranks 6th on our list of the 10 Best Tobacco and Cigarette Stocks to Buy Now. While we acknowledge the potential of Tobacco and Cigarette companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than TLRY but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.