Marijuana Penny Stocks: The Good, the Bad, and the Ugly
Marijuana penny stocks are plentiful in the market and have proven to be some of the better picks around.
From the higher-end penny stocks like Aurora Cannabis Inc (OTCMKTS:ACBFF, TSE:ACB), which was a mere $2.00 when I first began writing about it, to riskier ventures with smaller market caps, the marijuana industry offers penny stock lovers a good variety of options.
But not all penny stocks are created equal, so let’s go over how to tell a good one from a bad one, using two specific examples.
NAC Stock Is a Good Marijuana Penny Stock
The best marijuana penny stocks are those with long-term growth potential, a proven track record of developing (and maintaining) strong gains, and those with an eye toward growth and expansion.
With National Access Cannabis Corp. (OTCMKTS:NACNF, CVE:NAC), you get all three.
While the industry-wide correction has reaped havoc on a good many marijuana stocks, even ones that I’m often a big supporter of, like ACB stock, NAC stock has simply not suffered in the same way. In fact, over the past three months, the company has surged by nearly 50%.
Courtesy of StockCharts.com
So why is National Access stock performing so well while others are flagging?
First, management is solid.
One thing you want to see in any penny stock is that the company is headed by capable leaders, preferably with a connection to the industry.
National Access has all that and more, with its president, Derek Odgen, being a former Royal Canadian Mounted Police (RCMP) officer. More importantly, Odge served as director general of the “Drugs and Organized Crime” branch.
This gives the company a huge advantage, not only due to Odgen’s background knowledge, but also due to a steady stream of connections that will certainly help make any future legal changes easier to handle.
Financially, the company is on solid footing.
National Access’s revenue for Q1 2018 came in at CA$437,352, compared to CA$179,350 the previous year. The company netted a loss of one penny per share during the quarter.
Both profit and expenses more than doubled in that time frame, which is nothing out of the ordinary for a fast-growing company looking to make its mark. In fact, an increase in spending is often a good sign because it means the company has the necessary capital in order to expand.
NAC stock is a perfect example of a well-grounded, solid marijuana penny stock that provides both the opportunity for huge gains with a comparatively ample amount of security.
Golden Leaf Stock Is a Bad Marijuana Penny Stock
Golden Leaf Holdings Ltd (OTCMKTS:GLDFF, CNSX:GLH) recently made waves in the news for its attempt to franchise its stores with the help of BlackShire Capital.
Calling the stores “Chalice Farms,” the company has leapt onto the scene with big ambitions and large promises.
But that’s what worries me. Taking Chalice Farms international is a bold plan, but one that I believe is far more fantasy than reality.
All you have to do is dig a little beneath the surface.
Courtesy of StockCharts.com
GLDFF stock has been getting crushed on the market. While many marijuana stocks have suffered in 2018 (with NAC stock being a notable exception), few have had it as rough as Golden Leaf Holdings.
Golden Leaf stock has dropped 33% in value over the past three months. Even when it was gaining alongside the rest of the marijuana industry, its jumps were modest in comparison to some of the truly big winners.
In my mind, this lofty goal of marijuana franchises spread across the world is a lot to take on for a small marijuana penny stock that is already struggling.
I could very well be wrong, of course, and should this Chalice Farms idea pan out, we’re looking at perhaps one of the more valuable marijuana penny stocks.
In terms of having that foundational security that I look for in a marijuana penny stock, not to mention concrete appeal beyond words and plans, I simply don’t see it at Golden Leaf Holdings.
Marijuana penny stocks can run the gamut from fantastic long-term buys to fly-by-night operations that are there to benefit from the hype and little else.
While I believe that NAC stock could be the former, GLDFF stock falls in the middle of the spectrum.
Golden Leaf Holdings is a fine company as far as legitimacy goes, but I just don’t see how it digs out of the hole it’s in via a moonshot idea like an international marijuana chain. That is such a tall order to fill for any company, let along one struggling the way that Golden Leaf stock is.