These top 7 Marijuana Penny Stocks promise an interesting year
Planning to invest in Cannabis Penny stocks in 2021? Want to stay ahead of the Cannabis stock trends? Then you’re probably asking yourself:
“What cannabis penny stocks should I invest in 2021? Is 2021 a good year to invest in cannabis stocks? Which cannabis penny stocks will be the best return on investment right now? What can we expect from the cannabis stock market in 2021 and beyond?”
As marijuana usage gets given the green light across more U.S states and other places throughout the world, let's take a look at 7 of the best cannabis penny stocks that are positioned well in order to grow as this industry is looking set to continue its rapid acceleration.
Over 2020 the cannabis industry witnessed a yo-yo of a year. Starting at a relatively low stance to hitting new highs and continuing its rise through the start of 2021.
There were many leading factors over the course of 2020 that left investors unsure how these factors were going to affect the cannabis industry, including the pandemic and other geographical factors that weakened and challenged global markets.
But in light of all the challenges, the cannabis industry has made surprisingly impressive groundwork and is continuing to break records and push through more barriers.
The industry was on the rise and in the spotlight heavily in 2020 brought on significantly due to political changes. During the weeks of the presidential election rally this started to lead the industry to hit new highs, especially following the announcement that Joe Biden was to be the next President of the United States, who is in favour of legalising marijuana across the U.S.
This news was the icing on the cake for both cannabis stocks and investors alike.
Following this news the U.S cannabis market outshone the leading Candian cannabis market over 2020. The U.S cannabis market reportedly hit a record $17.5 billion in sales in 2020, with the Canadian cannabis market reaching a sales figure of £2.8 billion, up 120% from 2019. Globally cannabis sales exceeded $21 billion.
The rise in demand across the U.S is strong due to more states legalising the usage of marijuana with New York and Virginia becoming the two latest states to confirm legislation for recreational usage of cannabis. This pushes the total number of states to 16 that have now given the green light for cannabis to be legal.
Top 7 Marijuana Penny Stocks Right Now
Before we take a closer look at the best Marijuana Penny stocks in 2021, here are our top 7 picks:
- Harvest Health & Recreation (HRVSF)
- Terra Tech (TRTC)
- Medical Marijuana (MJNA)
- Supreme Cannabis Co Inc (SPRWF)
- OrganiGram Holdings Inc (OGI)
- CBD of Denver Inc (CBDD)
- KushCo Holdings Inc (KSHB)
What Are Marijuana Penny Stocks?
For beginner investors who may not know what cannabis penny stocks are these stocks are simply smaller marijuana companies that are operating within the cannabis industry.
A definition of a penny stock is any company that typically trades under $5 per share. However, some may also class penny stocks as companies that trade under $10 per share.
It is also worth noting that cannabis penny stocks and cannabis stocks, in general, are not all in the direct line of selling cannabis. Some companies are the operations behind the making of marijuana such as protective containers, specialized equipment or they could even be a company sitting in a different industry that then acquire or partner up with a cannabis brand.
For an industry that has been forecast by one London investment firm that it could potentially reach $350 billion in the next 10 years, whilst cannabis sales are projected to reach $22 billion by 2022, there is no wonder many experienced and beginner investors are turning their hands to invest in cannabis stocks.
Although most cannabis stocks on the market today sit at relatively attractive prices for their future growth potential, there are too attractive cannabis penny stocks that sit in good light based on their recent financial performances and future growth prospects.
So let's take a look at 7 of the best cannabis penny stocks that investors may wish to consider to add to their collection in 2021 that have the strong potential to deliver well over the year and beyond.
Best 7 Marijuana Penny Stocks To Buy Right Now:
Here are Trading Education’s top 7 marijuana penny stocks to consider!
1. Harvest Health & Recreation Inc (HRVSF)
The vertically integrated cannabis company Harvest Health & Recreation Inc (HRVSF) comes in first on the list as a top cannabis penny stock to buy in 2021.
HRVSF has been committed to its wholesale and retail presence across the U.S since 2011 along with acquiring, manufacturing and selling cannabis products spread across various licenced states with its aim to improve lives through the happiness of cannabis.
The cannabis stock released its Fourth Quarter and Full Year 2020 results in March confirming that the company is showing positive signs of improvement off the back of its previous losses in.
Within the company’s Q4 outlook the cannabis company confirmed a revenue of $69.9 million up by 85% from $37.8 million in Q4 2019, gross profit reached $31.3 million in Q4 compared to $16.6 million in 2019 and net loss before non-controlling interest was $7.4 million in Q4 compared to $85.2 million in Q4 2019.
In the company’s full year results the cannabis stock confirmed a total revenue result of $231.5 million up by 98% YoY from $116.8 million in 2019, total adjusted EBITDA was $15.3 million compared to negative $43.7 million YoY with net loss before non-controlling interest for the year was $59.6 million compared to $168.8 million in 2019.
The results are a clear indication of a strong management setup along with strong consumer demand within the stocks core markets including Arizona, Florida, Maryland and Pennsylvania. Who remain the company’s core areas for success in 2021.
The company has forecast revenue to reach $380 million in 2021, a $148.5 million difference from 2020 with Q1 revenue hitting $87 million.
The cannabis stock is also seeking to expand its portfolio by acquiring and leasing facilities to strengthen its financial position with its latest leaseback sale to Innovative Industrial Properties Inc (IIPR) looking set to receive $10.8 million in tenant improvements.
The cannabis stock currently sits on share price of $3.06 up by 27% from the start of January. And holding a 1-year change of 244.55%.
HRVSF stock is sitting in a good spot whichever angle you look at it. For its evidenced positive earnings, strong growth potential looking ahead and is potentially undervalued position for the stock's potential.
2. Terra Tech Corp (TRTC)
Terra Tech Corp (TRTC) organisation is a company that has witnessed a challenging year over 2020. But despite the stock underperforming, the company is looking rather promising looking to the future.
The company recently announced its Fourth Quarter and Full Year 2020 results on March 30th that confirmed the challenges that the stock faced.
Revenue from continued operations reached approximately $14.29 million compared to $16.49 million in 2019, a decline of $2.20 million overall. Gross profit reached $3.60 million compared to approximately $10.35 million in 2019 with Gross profit margin for the year being 25.2% compared to 62.8% in 2019. Net loss for the twelve months ending on December 31st was $30.12 million compared to a net loss of $46.93 million in 2019. Lastly, the company sits with $888 thousand in cash compared to $1.23 million in 2019.
The company’s new CEO Frank Knuettel confirmed that they are very optimistic for the future as TRTC recently announced that it has entered a transaction to acquire Unrivaled, a leading cannabis company that is poised for great growth.
The merger with Unrivaled is a huge positive for Terra Tech Corp as the company currently owns and manages one of the largest distribution network dispensaries, with over 700 in California and Oregon selling both its products and third party brands.
Unrivaled has a strong management team with Dallal Imbimbo, a director at KushCo Holdings Inc (KSHB) at the helm, along with having top cannabis brands within its portfolio including Korova, one of the top 10 brands in California.
Looking to 2021 the Terra Tech stock is predicting good growth from its recent acquisition plans to its new online operations coming in 2021 including Hemp Herbal Cigarettes. Ultimately all these positives will lead to the stock achieving good revenue over the year as it has been predicted with a combined companies revenue forecast in excess of $70 million in 2021.
The Terra Tech stock currently holds a market cap of $65.31 million with a negative EPS as it stands of - 0.15. But with the stocks healthier balance sheet leading in 2021, along with its strong and firm management team who is looking to build and expand a stronger network, including continued strong customer demand should leave TRTC stock sitting well at the end of the year.
Making Terra Tech one cannabis stock that should not be overlooked in 2021 as it seeks to grow well as the industry continues to evolve.
3. Medical Marijuana Inc (MJNA)
Medical Marijuana Inc (MJNA) is a holding company with subsidiaries that make and sell hemp-based products designed to make everyday a step towards a healthy living lifestyle.
MJNA stock became the first cannabis company to be traded publicly within the U.S and is continuing to push its hemp-based products heavily, to both the general public and to professional athletes by confirming the health and wellness benefits that these products give. Its Cannabidiol (CBD) products are becoming more well known globally for their strong benefits including to help aid recovery after intense exercise sessions.
The company gained well in Q3 with generated net revenue increasing by 11.25% to $12.2 million compared to Q2, a positive EBITDA of $175,55 million with the stocks Kannaway subsidiary hitting its best revenue in the company’s history in its Japan division in August 2020.
The company is yet to release its full-year results but the stocks subsidiaries are starting to release their latest progress update reports.
Kannaway LLC one of MJNA’s largest subsidiaries seeks to manufacture and market some of the world's most important product innovations sourced from cannabis. The company has started 2021 on a glowing note confirming the news of the brands Pure CBG tincture oil-based product is now being pushed across both the U.S and European markets and is witnessing a positive response.
It is estimated that the hemp CBD market is going to grow by 12.3% over the next five years where the product's current market size was valued at $1.7 billion in 2020. This is just one avenue that is a part of MJNA’s portfolio.
The small-cap stock MJNA currently holds a market cap of around $215 million and is trading at $0.05 per share. And currently holds a daily range of between 0.053-0.06. Whilst the stock has recently been trading over 7 million shares per day.
Marijuana MJNA stock has a strong growth opportunity and a stronger balance sheet, makes this cannabis penny stock a good value stock to buy.
4. Supreme Cannabis Co Inc (SPRWF)
Driven forward being one of the world's fastest-growing premium lifestyle cannabis companies, Supreme Cannabis Co (SPRWF) is still on the rise leading into 2021 and set for more the coming years.
In recent days the stock has been acquired by one the main leading cannabis stocks on the market Canopy Growth (WEED) in a reported $435 million deal. This not only benefits Canopy Growth stock hugely as it will gain access to almost 14% total share of the cannabis market, but it will boost SPRWF stock further as the company’s shares soared 60% following the news.
As the legalisation of marijuana within the U.S becomes more apparent, this has led to this merger with Canopy Growth as Supreme Cannabis are a small-cap stock that are leading ahead with cannabis sales across the U.S and also have their presence felt within the Canadain cannabis market.
In the company’s recent Q2 report the stock confirmed a record revenue of $18.3 million, a rise of 54% from the previous quarter whilst recreational net revenue grew by 70% to $12.7 million compared to the previous quarter. The cannabis stock also managed to achieve a positive Adjusted EBITDA of $3.6 million up from $0.3 million in Q1 2021.
These are just a few gains for the stock in the Q2 confirming that the company's strategies are strong as the stock delivers.
As the company continues to expand and seeks to add more partnerships including its latest with Humble & Fume Inc, this has led Supreme stock to increase net listing to 3,446 in Q2 up from 2,258 in Q1. These growth prospects should push the stock to reach their forecast targets moving forward.
Supreme Cannabis is looking to improve liquidity by raising $21.5 million in net process from equity and a further $4.2 million through its at-the-market equity program. This is aimed to strengthen both the company's balance sheet along with being able to innovate new plans for future growth expanditures to enable to increase shareholder value.
The Supreme Cannabis stock currently holds a share price of $0.32 not far behind its yearly high of $0.40 in February. With the stock having an average trading volume of around 5.65 million shares with its last daily trading volume being 8.89 million.
This growing cannabis penny stock looks attractive as it carries on evolving and utilises all angles of its business to drive sales and attract new consumer attention, including the form of its digital social media presence. Ultimately could push the stock to increase profit.
5. OrganiGram Holdings Inc (OGI)
One of Canada’s original cannabis producers OrganiGram Holdings Inc (OGI) is still proving to be a leading cannabis penny stock on the market today.
Since the start of the year many cannabis stocks have almost doubled with OGI stock being one of them. The stocks recent announcement of the company British American Tobacco (BAT) now holding a firm 19.9% equity interest within OGI stock, led the cannabis stock to rise in shares by almost 40% in a day.
Additionally, OGI has also confirmed its strong partnership with Cannabis New Brunswick will continue to operate due to the government confirming approval, this enables the largest New Brunswick licensed retailer to continue to deliver strong results.
Lastly, the stock is on a roll with its acquiring plans as it confirmed on the 6th April the stock had acquired the edible chewy cannabis brand Edibles & Infusions for a reported $22 million.
This purchase was designed to position OGI stock in a stronger financial position as soft chews is the largest within the edible category and to give better value back to its shareholders along with strengthening the company in other key areas.
Within the stocks Q1 2021 report most areas were slightly down from Q1 YoY, but only marginally. But the stock witnessed good gains across Canada as adult-use recreational gross and net revenue grew by 42% and 30% respectively, alongside positive cash flow from operations of $0.3 million in Q1 2021 which represented a second consecutive quarter of cash positive territory.
The OrganiGram stock currently sits on a share price of $3.05 down by 3% from close on Friday at $3.15. Whilst it holds a 52-week range of $6.45 at its high and sits on its lowest price of $1.01.
Nonetheless, OrganiGram cannabis stock is a strong contender within the marijuana industry and a cannabis penny stock that is on the minds of many investors around the globe as this stock has the potential to perform well over the year and to the future.
6. CBD of Denver Inc (CBDD)
The publicly traded CBD company CBD of Denver Inc (CBDD) is one of the newest companies on the market today and comes as a cannabis penny stock to consider buying in 2021.
The company which trades on the over-the-counter (OTC) market was created to give customers a unique and new perspective on the CBD industry. The stocks network enables CBD users from across the world to discuss their products, CBD uses and more. Even though the stocks network has only been operational for the past 3 months it is already seeing up to 2,500 hits per day.
Within the company’s Q1 2021 results the stock announced it generated a revenue of $7.31 million, this figure is almost 50% of the company's 2020 full year revenue.
Taking into consideration that this stock operates across the U.S, Europe and Switzerland there is only the U.S out of the three that is not currently restricted to tighter lockdown restrictions in comparison to many European countries and parts of Switzerland, confirming that this is an impressive result that the stock has achieved within the first three months.
Looking ahead the CBD of Denver stock is maintaining its focus on the company’s Rockflowr GmbH brand as they seek to strengthen, execute and deliver the brands aims of producing and distributing both cannabis and CBD products. Whilst using equity in order to further establish the company's portfolio in Switzerland in order to strengthen the stocks market position alongside strengthening shareholders value.
Due to this cannabis stock being fairly new to the market it does come with limited data available. Although the CBD of Denver stock looks like it could fit nicely into the cannabis market across various continents, and is holding a positive outlook from what we can see.
But it goes without saying that you may wish to dig further on the stock financials before you consider investing into this new cannabis company.
7. KushCo Holdings Inc (KSHB)
KushCo Holdings Inc (KSHB) is a cannabis penny stock that if you are familiar with this industry you will have heard of this company.
Being a trusted partner serving legalised cannabis across various continents including North America, South America and Europe as well as offering additional services to meet and help consumer demands, has blown above its previous quarters earnings and is looking to continue to reach new highs within this year and the coming years ahead.
KSHB reported an increase of 23% quarter-over-quarter to $32.9 million in revenue in Q2 2021 with the company’s net revenue growing by 9% YoY. But one of the biggest improvements for the stock is that it managed to sit in a cash position at the end of Q2 of $35 million compared to $5.7 million in Q1 2021.
The KushCo stock also confirmed that it has a loyal consumer base as its top 25 consumers made up 77% of the company’s total revenue.
On top of the stocks already blooming success, KSHB is continuing to expand as the stock confirmed its largest merger with Greenlane Holdings Inc (GNLN). This merger has confirmed a new leading ancillary cannabis company on the market that will serve many multi-state operators (MSOs), licensed producers, many smoke stores within the U.S along with being available to millions of consumers.
Following the news of this merger KushCo shares jumped up 12% at the start of April. With this merger being forecast to expect annual run-rate cost synergies within two years of between $15 million to $20 million, whilst the merger will also enable KushCo’s shareholders to receive a quarter of Greenlanes share for each of their shares.
The KushCo cannabis stock currently holds a market capitalisation of $204.8 million whilst holding a share price of $1.29 up by 3.20% from its previous close with a volume of 1.12 million shares.
The KushCo stock has strong makings to become a wonderful cannabis penny stock as it grows well over time. Sitting in a good position, both financially and in the market makes this stock a stock that can certainly add growth, value and diversity to your collection.
Overview: Best Marijuana Penny Stocks
And there you have 7 of the best cannabis penny stocks on the market today that all offer great advantages individually to an investor.
As the cannabis industry continues to evolve and with consumer demand across the globe being stronger than ever spreaded across various cannabis products, this should see revenues continue to hit new highs and provide good value to these stocks shareholders.
Medical marijuana is a plant-based medicine from cannabis sativa or cannabis indica and has three major active compounds which include THC, CBD and CBN. Medical cannabis has been active within the healthcare industry for many years helping to treat conditions such as nausea associated with chemotherapy, relief from muscle pain and spasms and can also be used to treat anorexia.
It's worth noting that cannabis stocks are companies who directly or indirectly are legalised to manufacture and sell cannabis products. This can be in the form of cannabis, edible treats, cigarette vapes, CBD oils and much more, with all cannabis products being designed to be consumed or inhaled for positive impacts.
For example, CBD oil has been confirmed to be a therapeutic oil that is known to relax and ease muscle pain and are strongly advised to be used by professional athletes to help speed up the recovery process. CBD products are also sold publicly in countries that have not legalised recreational use of marijuana, the UK being an example as CBD does not fall under the Misuse of Drugs Act.
Read Also: What Are The Top Stocks To Buy Under $10?
Features to Look for in Marijuana Stocks
1. Company Management and Growth Strategy
Like with any company on the market, having a good management team and a solid growth strategy are two main elements in order to become a successful business.
A realistic and competitive business strategy that aims to promote, excel and introduce new products and services along the way whilst seeking to expand operations both nationally and potentially internationally into new markets, are ultimately the main elements that every investor should look into when looking at a stock of interest, as these elements will make the stock sit in a stronger position.
That said there are other ways that companies can seek to expand their growth opportunities by acquiring and partnering with other companies. These forms of growth can strengthen a company's balance sheet, provide more diversity, enable more market share and strengthen the company’s performance which inevitably leads to strengthening the stocks position.
2. Cost of cannabis per gram (cost per gram)
When seeking to invest in cannabis penny stocks it is an important factor to look and analyse cannabis cost per gram.
The reasoning for this is because the industry is very competitive, especially as the industry is growing and all companies are looking to be a cut above the rest.
Then you also have to factor into the equalization so-called ‘Black-dealers’ that will be around offering lower rates sparking further challenges.
Lastly, you may also want to keep an eye out on cannabis stocks that are showing a decline in costs per gram over a period, as this can then lead to stronger price benefits for investors if they decide to buy into a stock down the line.
3. Consider both Fundamental and Technical analysis
Although both features above can fall under this category, so too do other factors.
To start with a stock's fundamental analysis this includes looking at key characteristics with a stock, elements such as the stocks earnings per share (EPS) is one of the most prominent and popular metrics that investors look at to calculate and measure a company’s profitability.
As the cannabis industry is a relatively new industry compared to other leading industries on the market today, it is not uncommon for you to see cannabis companies EPS in the negative.
This could be due to numerous factors, one being that companies are reinvesting for the future which can cause this effect. Secondly, many cannabis companies are not yet sitting in profitability, but this is potentially all set to change as the industry is on the brink of acceleration.
Either way the best way to determine the outcome for a company's negative EPS is by taking a look at a stocks balance sheet and seeing how the company is spending their money.
Then you have a technical analysis of a stock which can be challenging if you are a beginner investor and may take some time to fully figure out.
But in short, technical analysis on a stock is simply technical assessments that include price indicators, moving averages and stock charts that are all carried out to determine to see stocks more accurate results.
If you are a beginner at investing, sticking to a stock's fundamental analysis is the best way to start your trading journey as it is both easier to understand and will determine a stock's realistic value.
How Marijuana Penny Stocks Add Diversity to Your Portfolio
If you have not come to this outcome already it is clear to see that cannabis stocks are set to grow substantially well over the coming years, leading to confirmation of this industry's enormous growth potential ahead.
Naturally, cannabis penny stocks do come with stronger risk factors compared to none penny stocks as these companies are on a smaller scale and are deemed to be more riskier than larger cannabis companies on the market. The risks include lack of public information, stronger fraud factors due to their size and lastly low liquidity.
But when you have a portfolio made up of a collection of assets including mid-large cap stocks, ETFs and Bonds which are one of the safest forms of investments on the market, then looking to add the odd penny stock in the equation is where these stocks will strengthen not only your diversity but will strengthen your collection of stocks as they seek to add good earnings potential.
If you do research into how penny stocks operate and know the ins and outs of these stocks, they can be extremely rewarding. And who knows what could lie ahead in the future for these stocks as the industry evolves, they could be the unexpected surprise all investors dream of.
Marijuana companies are in heavy competition not only with one another but against the black-market sellers. Alongside, political challenges with governments holding the strings not just across the U.S but worldwide having a strong influence and outcome on this industry.
Nonetheless, the cannabis industry can still grow regardless but it may grow at a slower rate if governments halt legislation or if other factors including high taxes come into play.
Adding one or more of these 7 cannabis penny stocks to your collection may benefit investors, especially in the long-term as this industry grows to record highs as predicted.
eToro – Top Stock Broker, Buy stocks with 0% Commission
eToro have proven themselves trustworthy within the stock market over many years – we recommend you try them out.
Your capital is at risk. Other fees may apply