Here are the top three marijuana penny stocks with the best value, the fastest growth, and the most momentum.
To begin with, cannabis stocks face higher-than-normal risk and volatility due to a long list of factors. Many publicly traded cannabis companies are young, unproven enterprises that face a complicated, fast-changing market that includes different laws across many local, state and regional jurisdictions. Also, cannabis use is still illegal at the U.S. federal level. The challenges are particularly great for marijuana penny stocks, and investors should be especially cautious and perform more than their usual due diligence when investing in these companies. Some up-and-coming names in the marijuana penny stock category include High Tide Inc. (HITI.V) and Vireo Health International Inc. (VREOF).
These are the marijuana penny stocks with the highest year-over-year (YOY) sales growth for the most recent quarter. Rising sales can help investors identify companies that are able to grow revenue through organic or new ways, as well as find growing companies that have not yet reached profitability. In addition, earnings per share can be significantly influenced by accounting factors that may not reflect the overall strength of the business. However, sales growth can also be potentially misleading about the strength of a business, because growing sales on money-losing businesses can be harmful if the company has no plan to reach profitability.
Best Value Marijuana Penny Stocks
Marijuana stocks, represented by the ETFMG Alternative Harvest ETF (MJ), have solidly outperformed the broader market. MJ has provided a total return of 61.1% over the past 12 months, ahead of the Russell 1000’s total return of 43.2%. Note that MJ targets a broad assortment of cannabis industry stocks, including penny stocks. These market performance numbers and all statistics in the tables below are as of July 2, 2021.
These are the marijuana penny stocks with the lowest 12-month trailing price-to-sales (P/S) ratio. For companies in early stages of development or industries suffering from major shocks, this can be substituted as a rough measure of a business’s value. A business with higher sales could eventually produce more profit when it achieves, or returns to, profitability. The price-to-sales ratio shows how much you’re paying for the stock for each dollar of sales generated.
Medical and recreational cannabis use has been legalized in a growing number of U.S. states and on a national level in Canada, fueling a burgeoning legal cannabis industry in recent years. Cannabis stocks are now a prime focus for investors seeking potentially explosive sales and stock growth. But there are certain considerations associated with marijuana stocks that investors should keep in mind.
These are the marijuana penny stocks that had the highest total return over the last 12 months.
Revenue is also on the rise. In the three months ending Sept. 30, 2019, Canopy brought in roughly $57.8 million, compared to roughly $17.6 million in the same time the year before. However, more than 200% of revenue growth wasn’t enough to match the market’s high estimates for growth. On the first day of trading after the revenue figures were made public, shares of Canopy opened with a roughly 15% drop. And like many companies in the cannabis sector, Canopy is operating at a loss. In the quarter ending Sept. 30, 2019, Canopy posted a net loss of roughly $282.8 million.
Still, Canopy has some of the strongest growth figures in the sector. That—along with high-profile partnerships with celebrities like Martha Stewart, Seth Rogan, and Drake —makes Canopy an interesting company that may be worth watching in the years to come.
Eighteen U.S. states have already legalized recreational cannabis for adults, as has the District of Columbia, and more states are expected to follow suit in the coming years. Proponents cite public opinion polls, which show support for legalization has grown to well beyond half of the nation.
Canopy Growth Corp. (NYSE: CGC)
There has been a lot of focus on cannabis penny stocks lately. It is because many of them have doubled or tripled in price at points over the past few years. These large moves have mostly been predicated on investor belief that there will be an opportunity for pot companies to succeed as more states legalize hemp, CBD oil, and cannabis for medicinal and recreational purposes.
This is another company based out of Canada, and as such, it has the advantages that come with operating within a country that has legalized cannabis on a national level. Even after the stock’s slump throughout 2019, Canopy still boasts one of the biggest market caps in the cannabis industry—more than $5 billion. Canopy’s financials are bolstered by more than $6.1 billion in assets, compared to under $2 billion in liabilities.
Unlike many cannabis-wannabes, who aren’t selling flower yet, Aphria is actively producing hydroponic cannabis with the help of the Canadian government and selling it for medical use. Aphria, as well as other cannabis companies with Canadian government partnerships, may be around for years to come. APHA’s shares rose nearly six-fold between 2016 and the beginning of 2019. Also, similar to Aurora (but unlike cannabis companies trading on the pink sheets), Aphria trades on the well-known and investor-trusted NYSE.
In Q2 of 2021, Aurora brought in an impressive $70.3 million in revenue, up 11% from the same period a year earlier. The company had a positive net income after years of losses before. The balance sheet also looks better than the ones above: $150 million in current assets and only $75 million in current liabilities.
With the SAFE Banking Act on the Senate floor through a bipartisan committee. Chuck Schumer continues to reiterate that he is currently working on introducing a bill shortly. The senator wants to pass a cannabis legalization package before the banking reform policy. Either way, cannabis investors will have to be patient and wait for this market catalyst at the moment.
In its most recent earnings, Valens reported its first-quarter fiscal 2021 gross revenue of $21.8 million up 21.4% versus Q4 of 2020. The company also saw product sales increase 23.3% to $17.9 million. In April Valens company entered into an agreement to acquire a leading CBD company Green Roads entering into the US market. Also, important Valens has filed the initial application for listing on the NASDAQ after its first US acquisition.
Finding Value In Penny Stocks
Due to the fact, top cannabis stocks have not been showing increases from their first-quarter reporting it may be time to look in other areas of the marijuana sector for larger short-term returns. One part of the cannabis sector that’s shown significant upside this year is top marijuana penny stocks. When we speak about penny stocks technically, we are talking about any securities trading under the $5 per share benchmark.
Because of this more investors prefer to establish short-term positions and take advantage of price fluctuation. Whatever your trading style pot penny stocks are known for being a high-risk high rewards part of the market. This is because investors can use much less capital to establish a larger position in these equities. As we close the second week in May these could be the top marijuana penny stocks to watch right now.
In April cannabis sales in Michigan increased by 149% to $153.8 million. Additionally, the top companies in the US have given some rather significant increases in revenue guidance for 2021. For the most part, this is currently being delivered by some of the top marijuana stocks to buy in their first-quarter results. It goes without saying the cannabis market has substantial growth potential for the next five years. But at the moment the cannabis sector seems to need a kick start from the US federal government in the form of cannabis reform.