Marijuana Penny Stocks for 2019
It’s not the best time to be a marijuana bull. The pot stock market has been getting hammered over the past few days, largely due to a correction that was long in the making.
But if you look beyond the near term, there’s a lot of potential in the legal cannabis industry, especially when you consider marijuana penny stocks for 2019.
The marijuana industry isn’t going to stay down for long. We’ve seen this happen multiple times before in the stock market, wherein explosive gains were dimmed somewhat in the following months by an industry-wide wind-down.
We saw it happen in 2017, and we’re seeing it again now after marijuana stocks exploded in August 2018.
This makes it that much more important to consider the long-term outlook of pot stocks as we enter a period of stagnation and drops until the next big rush.
With Canada’s marijuana legalization no longer driving the hype, it’s a good time to consider cheap marijuana stocks before the next big investment in the marijuana industry lands—or another country hops on the legalization bandwagon.
With that in mind, I will examine three of the best marijuana penny stocks available right now.
But first, let’s look at the marijuana penny stock market more broadly.
Are Penny Pot Stocks Risky?
The fact is, legal marijuana is a highly volatile industry. That’s why you sometimes see 100% stock price gains overnight or 20% drops in a single morning. This is the nature of an emergent, excitement-filled industry.
With added volatility comes increased risk, but also increased potential. After all, you won’t see this kind of payoff for your investment from older, more stable sectors.
When it comes to marijuana penny stocks for 2019, the added volatility, in conjunction with the inherent risk in penny stocks, makes these picks far less predictable compared to more established or larger players.
So the answer is yes, marijuana penny stocks are risky.
The catch is that the industry is so young that some of the strongest marijuana stocks out there are still in their nascent stages. That makes them penny stocks in name only, and mitigates much of the risk that comes with more traditional, less established, and smaller marijuana penny stocks.
Marijuana Penny Stocks for Early Investors
Now for the good side of marijuana penny stocks for 2019.
These stocks are all a second chance, if you will, to benefit from the marijuana sector if you missed out on the initial rush.
While the gains aren’t guaranteed to match those of the recent past that we’ve seen in the cannabis industry, these low-cost marijuana stocks will allow you to get substantially more shares for your investment than if you were to invest in the industry heavyweights like Canopy Growth Corp (NYSE:CGC).
So when we do see the industry rebound in 2019, your dollar will likely have gone much farther, since these penny stocks have more room to grow.
Marijuana Penny Stock List
Aurora Cannabis Inc
The first entry on our list is really an industry heavyweight masquerading as a marijuana penny stock: Aurora Cannabis Inc (NYSE:ACB).
The company is one of the largest cannabis companies in the world, both by market cap and production capacity.
That being said, ACB stock currently sits at around $8.00 a share, making it a steal at such a low price.
Aurora has a lot going for it, from strong supply agreements signed across Canada to a bevy of acquisitions that have expanded its production capacity, its global foothold, and its product lines. ACB stock is poised to see big gains in 2019 to catch up with the price of similarly-sized competitors.
First, it’s the only penny marijuana stock listed on the New York Stock Exchange, putting it in a powerful position to receive investment from weed-hungry U.S. investors.
The company has made several acquisitions over 2018, with its recent acquisitions of UAB Agropro and ICC Labs Inc (OTCMKTS:ICCLF, CVE:ICC) helping push its brand globally and expand its product line.
Another marijuana penny stock on my radar for big gains in 2019 is Hexo Corp (OTCMKTS:HYYDF, TSE:HEXO).
This year, Hexo scored a supply agreement with the Quebec government, shipping 200,000 kilograms of cannabis over a five-year period to the province. (Source: “Hydropothecary reports fiscal 2018 third quarter results,” GlobeNewswire, June 28, 2018.)
Hexo also signed a deal with Molson Coors Brewing Co (NYSE:TAP) to produce cannabis-infused beverages—an extremely hot segment of the market. (Source: “One of the world’s largest beer makers is about to start producing marijuana-infused drinks,” Business Insider, August 1, 2018.)
“Canada is breaking new ground in the cannabis sector and, as one of the country’s leading beverage companies, Molson Coors Canada has a unique opportunity to participate in this exciting and rapidly expanding consumer segment,” said Molson Coors President and CEO Frederic Landtmeters.
Hexo’s most recent quarterly report added strong financials to its already impressive year.
The third and final selection of our marijuana penny stocks for 2019 is OrganiGram Holdings Inc (OTCMKTS:OGRMF, CVE:OGI).
Long a favorite of mine, OrganiGram stock remains one of the better stocks in the marijuana industry.
OrganiGram’s most recent financial report showed quarterly net sales hitting CA$3.7 million, compared to CA$1.9 million for the same period in 2017. The nine-month net sales came in at CA$10.1 million, versus CA$3.6 million in the same period in the previous year. (Source: “Organigram Announces Record Q3 Financial Results – Net Income of $2.8 Million for the Quarter,” OrganiGram Holdings Inc, July 30, 2018.)
OrganiGram has chosen to expand globally, investing in Germany’s lucrative marijuana market.
OrganiGram recently bought a 25% stake in alpha-cannabis Pharma GmbH, giving it a foothold in what will eventually be one of the largest marijuana markets in the world. (Source: “Organigram to Take 25% Stake in German Cannabis Company,” New Cannabis Ventures, October 17, 2018.)
This makes OrganiGram stock not only one of the best low-cost marijuana stocks—at about $5.00—but also a strong pick for long-term growth.
Marijuana Stock Performances
The stock chart below showcases the performance of ACB stock (black line), HYYDF stock (blue line), and OGRMF stock (red line).
Chart courtesy of StockCharts.com
There are risks associated with my picks for marijuana penny stocks for 2019, but so too are there rewards.
The three companies mentioned above have many qualities that you’d expect from their larger competitors, while also being far cheaper—and therefore having much more room to grow.
The entire marijuana stock market is likely to balloon over the next few years, but much of that growth is going to be centered around marijuana penny stocks catching up with larger producers, which is great news for new investors.