Three Top Marijuana Penny Stocks
Marijuana penny stocks are some of the best opportunities on the market in general, but with the recent pullback we’ve witnessed in the pot industry, they might actually be at some of their best values yet.
You see, the marijuana stock downturn is very real. Share prices have plummeted this summer and the outlook is bleak—or at least that’s what some would have us believe.
Frankly, the near term is going to be a little bumpy, but all the factors that drove pot stocks crazy in the first place are still intact: huge potential growth as the industry expands (think U.S. marijuana legalization), a growing consumer base, a variety of applicable uses for cannabis, and an overall warming of the public to the drug.
Not to mention that the current downturn is as much a function of the broader stock market as it is a commentary on marijuana stocks specifically. Investors are concerned about the ongoing trade war between the U.S. and China—and about a potential recession—and are therefore divesting from more volatile stocks.
Marijuana stocks, known for their volatility, have suffered. But that opens up a whole slew of opportunities from which steel-nerved traders can benefit.
And that brings us to the point of this article: marijuana penny stocks that are extremely high-value opportunities at their current prices.
Following the marijuana stock market correction, these stocks have been battered a bit, but they contain tons of potential. There’s a veritable powder keg of possibilities and a number of things that could set it off.
From a new market opening up due to marijuana legalization, to another big investment deal, to an overall economic recovery, various factors could play into a massive marijuana stock resurgence.
Chart courtesy of StockCharts.com
The top pot stocks we’re examining today—CURLF stock (black line in the above chart), HEXO stock (blue line), and OGI stock (red line)—are among the few marijuana stocks to still be on the positive side of gains in 2019, despite the recent downturn.
Below we’ll examine why that is, and what the future holds for these three marijuana penny stocks.
Among the largest marijuana businesses in the U.S., Curaleaf Holdings Inc (OTCMKTS:CURLF, CNSX:CURA) is looking in the next fiscal year to become the first cannabis company to post more than $1.0 billion in sales. (Source: “Cannabis Canada: Will Curaleaf be the first pot company to report US$1B in sales?,” BNN Bloomberg, August 28, 2019.)
CURLF stock, while down significantly over the past few months, is still on an upswing year-to-date, having gained nearly 50% since 2019 began.
If the company is able to achieve $1.0-billion-plus in sales next fiscal year, then expect its stock price to continue rising.
By operating in 11 U.S. states, Curaleaf is one of the few marijuana companies that has access to the broadest pot consumer base in the world. After all, California is a bigger market than all of Canada.
The difference between Canadian pot stocks and U.S. pot stocks, of course, is that federal marijuana prohibition remains in place in the U.S., preventing a number of benefits from reaching companies like Curaleaf.
It’s worth noting that CURLF stock is not registered on a major stock exchange, instead being traded over the counter and on the Canadian Securities Exchange.
That leaves a ton of room for growth on top of the already sky-high potential. After all, when federal U.S. marijuana legalization eventually comes, Curaleaf will not only be able to expand its operations and no longer fret over federal interference, but it will also likely be able to register on a major stock exchange, exposing it to another avenue of capital and increasing its visibility among investors.
Being the top dog in the biggest legal pot market on Earth right now means that this marijuana penny stock has a lot of momentum behind it. In fact, I could see Curaleaf stock easily eclipsing its all-time high of $11.00 in 2020. My prediction has the stock potentially doubling in the next year or so, making it a very valuable pick-up at its current price of around $7.70.
Much like CURLF stock, Hexo Corp (NYSE:HEXO) is a marijuana penny stock that has fallen on hard times. Nevertheless, HEXO stock is still up on the year, having gained 15% in 2019.
Moreover, the company has a lot of potential due to its partnership with the big alcohol company Molson Coors Brewing Co (NYSE: TAP).
On top of that, Hexo Corp has a great way to earn recurring revenue: supply agreements. These long-term contracts with provincial governments in Canada mean that money will keep coming in as long as the company has enough pot to supply.
Certain regulatory hiccups have made that process more difficult than it should be, but those issues will likely be rectified sooner rather than later.
I’m still very bullish on HEXO stock, and I could easily see the stock hitting $10.00, up from its current price of around $5.30. While that will likely occur in 2020 or beyond, the long-term projection is still very rosy for HEXO stock.
Another marijuana penny stock very much in the same situation as HEXO stock is OrganiGram Holdings Inc (NASDAQ:OGI). OrganiGram stock has also fallen on tough times but remains a very high-value stock.
First you have to consider the fact that OGI stock was one of the few pot stocks that was able to largely sidestep fears of overvaluation. While many stocks in the industry were labeled as overvalued, OrganiGram largely avoided those accusations due to its relatively low price and market cap compared to its assets.
Now you have one of the strongest marijuana companies at a bargain share price. Not to mention that it’s one of the few weed stocks operating on the Nasdaq, and it’s the only marijuana penny stock on that exchange. While not a game-changer, that gives the stock a slight boost in its visibility.
These top pot stocks have one thing in common: all three are priced at a great value right now.
CURLF stock, HEXO stock, and OGI stock each have massive potential to easily double within the next few years. For long-term investors, these stocks could be very solid options.
Overall, OGI and HEXO are among my favorite marijuana penny stocks for many of the same reasons: strong foundations, high potential, and low price. It’s a good matrix of attributes, one that will likely lead to gains in the future.