Best Marijuana Penny Stocks Right Now

As marijuana becomes legalized in more places throughout the world, these companies are in the position to grow.

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Contributor, Benzinga
February 20, 2024

Amplify ETF Trust Amplify Alternative Harvest ETF (ARCA:MJ)

The ETFMG Alternative Harvest ETF is an exchange-traded fund that is comprised of a range of cannabis, grower and producer stocks.

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Vol / Avg.177.000 / 3.368MMkt Cap-
Day Range- - -52 Wk Range2.640 - 4.700

The Cannabist Company Holdings Inc (OTC:CCHWF)

Columbia Care Inc is the United States based cultivator, manufacturer, and provider of medical cannabis products and services. Some of its products are Vaporization Oil, Sublingual Tinctures, Lotions, Hard Pressed Tablets, and Suppositories among others.

$1.14
0[0.00%]
Last update: 3:59PM (Delayed 15-Minutes)
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Vol / Avg.0 / -Mkt Cap-
Day Range- - -52 Wk Range0.355 - 1.500

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Harborside Inc is a United States based cannabis retailer. The company manages and operates four cannabis stores and a cultivation facility and also assist state-licensed operators engaged in the cultivation, manufacture and distribution of cannabis throughout the United States.

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OrganiGram Holdings (NASDAQ:OGI)

OrganiGram Holdings Inc is a Canada licensed producer of cannabis products. The company focuses on producing indoor-growth cannabis for patients and adult recreational consumers, as well as developing overseas business partnerships. It operates in a single segment that is the production and sale of cannabis. The company’s brand portfolio includes Edison Reserve, Edison Cannabis Co, ANKR Organics, and Trailblazer.

$2.11
-0.07[-3.21%]
Last update: 7:00AM (Delayed 15-Minutes)
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Vol / Avg.3.259K / 882.147KMkt Cap198.547M
Day Range- - -52 Wk Range0.970 - 3.364

4Front Ventures (OTCQX:FFNTF)

4Front Ventures Corp is a Canadian-based company. It is engaged in the cultivation, processing, extracting, manufacturing, and distribution of cannabis products. It operates in two segments: THC Cannabis and CBD Wellness. The THC Cannabis segment engages in the production and cultivation of THC cannabis, manufacturing and distribution of cannabis products to own dispensaries and third-party retail customers. CBD Wellness segment encompasses the production and sale of CBD products to third-party customers.

$0.0895
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Last update: 3:59PM (Delayed 15-Minutes)
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Vol / Avg.0 / 543.065KMkt Cap59.922M
Day Range- - -52 Wk Range0.054 - 0.295

If you’ve ever bought a lottery ticket or asked someone out on a date, you’ve taken a risk. Many risks are worth taking because the payoffs can be huge. Penny stocks are one of the riskier assets you can invest in. There’s a chance the rewards can be great, but there’s also the chance that you’ll lose the money you put in. 

About 30 years ago, it was unimaginable for anyone to invest in a marijuana company. Now, marijuana stocks trade on some of the world’s major exchanges worldwide. The rising interest in marijuana stocks has also created an interest in marijuana stocks at low prices. Wall Street is awash with cannabis stocks, and that means that they could fall in value (or fail to rise.)

Yes, pot stocks may be held by hedge funds, they might find their way into your portfolio and they could easily provide you with high highs or low lows. The stock price that is not reaching its target or that sits close to $1 or less means that you might not see immediate gains.

Marijuana penny stocks trade for a few dollars and even less than $1 in some cases. These equities are cheap to buy into and show great potential for growth. Sure, they can be a bit risky, but everything worthwhile requires some amount of risk. It’s how you diversify the risk within your portfolio that matters most. 

Take a look at how cheap Marijuana assets can bring value to your investment portfolio. You want to review things like revenue growth, market cap, growth rates and much more.

The Best Marijuana Penny Stocks

Overview: Marijuana Penny Stocks

Marijuana stocks are companies that produce and distribute marijuana products. Marijuana, also known as the cannabis plant, contains 2 main compounds: cannabidiol (CBD) and delta-9 tetrahydrocannabinol (THC). THC is psychoactive, meaning it impacts the mind. THC is the ingredient that gives marijuana users a sense of high or euphoria. 

CBD does not affect someone’s mind and has been found to be therapeutic. People report feeling more relaxed and suffering less pain with CBD. This is not the same thing that weed companies are offering, especially when you consider that the range of cannabis products is quite vast.

Most marijuana products contain either THC, CBD or both. Both THC and CBD can be consumed as food, drinks, oils and smoking. Hemp, a variation of the cannabis plant, can be used to create a variety of things including rope, textiles, paper and even biofuel.

Before 1996, marijuana use of any kind was illegal across all 50 states. Since then, marijuana laws have become more lenient. First allowing for medical use, and now increasingly for recreational use. In today’s market, the top marijuana penny shares for 2020, 2021, 2022 and now 2023 represent an even wider swath of the industry as it explodes in many states across America. The more businesses in this space can open and operate in more places, the more you’ll see investment opportunities appear.

At this time, most states have made CBD or low THC programs legal. However, marijuana remains completely illegal in Idaho, Kansas, Nebraska and American Samoa. 

The marijuana market is also growing outside the U.S. Although marijuana is still banned in most countries around the world, it is becoming more tolerated across some major economies. 

Medical marijuana has been legal in Italy since 2013. Germany recently legalized marijuana for medical use in 2017. And in late 2018, Canada legalized the drug for recreational use. The success of marijuana companies is dependent on how widespread legalization will be throughout the globe. 

Marijuana penny stocks offer the potential for high-growth, which is what attracts most investors. But these are some of the riskier assets you can have in your portfolio. As long as you do your due diligence and balance the risk throughout your portfolio, you should be well-positioned to see the benefits of these stocks. 

Best Online Brokers for Marijuana Penny Stock

Marijuana penny shares are somewhat of a niche investment category. It can be time-consuming to find relevant information about these stocks. Choosing the right broker can help. Take a look at some of Benzinga’s favorite online brokers as you consider investing in the top cannabis companies or picking up an American cannabis stock that will improve the performance of your portfolio. This is especially important when you’re hoping to come upon growth stocks, hidden gems of the stock market and those that exhibit quite a lot of potential for sales growth.

Features to Look for in a Marijuana Penny Stock

Management: The success of THC stocks depends on high levels of growth. One of the best predictors of strong growth is a management team with a competitive business strategy. Management that aims to diversify products and expand operations into international markets will be better positioned. Partnerships and acquisitions are another way to drive growth. Look out for companies that are making strategic moves to cement themselves in the market. 

Cost per gram: Companies that are able to reduce their production costs have a distinct advantage. Marijuana companies face heavy competition from black market dealers that are able to keep prices low. Be on the lookout for companies with low costs per gram. And, especially ones whose costs per gram are decreasing over time. The most expensive marijuana is not always going to offer the best profits and performance, and the marijuana price index does not impact every business in the same manner. This will give you a good idea of who is likely to enjoy price advantages in the coming years. 

Earnings per share: By looking at a company’s earnings per share (EPS), you can get an idea of that company’s profitability. This is calculated by subtracting preferred dividends from net income and then dividing the difference by outstanding stockholder shares. Keep in mind that you may see a negative EPS for some marijuana companies. Don’t let this put you off. 

Many companies in the industry aren’t profitable yet. Take a look at how the company is spending money. If funds are going toward investing and expanding operations, it may be a signal of future profitability. 

Considerations With THC Stocks

As you look for pot stocks to add to your portfolio, you need to look at everything that could go on around these assets. Marijuana doesn’t exist in a vacuum, and it doesn’t have a 100% approval rating. Consider these things when buying into the THC or CBD market.

Legality: Marijuana is not fully legal in all 50 states, and it’s most assuredly not legal worldwide. Yes, many US states are allowing for medicinal use, and there are many recreational pot laws awaiting a willing legislature from coast to coast. But, there’s no way to know how marijuana laws will shake out across the country or even North America, meaning that some stocks could falter while others soar due in large part to lawmakers and nothing else.

Growth potential: You might think that the marijuana market is going to grow infinitely, but that’s not the case for every business. Some are growing more than others. Some are growth stocks you can grab onto today. Some pot assets are so large and expensive that you may not get a lot of value out of holding them. Some are on a downturn and could be bought out tomorrow. Look carefully at growth potential before you assume marijuana stocks are a good investment.

Management: As you invest in marijuana assets, you may find that some companies are managed better than others. Consider that Google hired a business expert to support the “Google guys” before they became executives themselves. Is your favorite THC firm doing the same? Looking carefully at management can tell you a lot about any business, but especially one in such a unique, tenuous and controversial industry.

How to Diversify Your Portfolio with Pot Stocks

Marijuana stocks or cannabis stocks offer enormous potential for growth. But they are not without their share of risk. Marijuana companies face heavy competition and low prices from black-market sellers. Their business models completely depend on the political landscape. If governments decide to roll back on legalizing marijuana or enforce heavy taxes on products, growth will slow—a marijuana stock could become a hindrance instead of an asset.

Consider mitigating risk by diversifying your portfolio via stock comparison and research. For example, you may like Curaleaf, but there are other options like Canopy Growth (CGC), Aurora Cannabis Inc (ACB), Green Thumb Industries and many more. You can do this by holding onto safer assets — like bonds, consumer staples stocks or REITs. In all, pot or THC stocks can be a valuable contribution to your investments. 

Want to learn about other bargain investing options? Take a look at Benzinga’s selection for stocks under $5, stocks under $10 and stocks under $20.

For more information about about penny stocks and penny stock trading, visit the U.S. Securities and Exchange Commission at www.sec.gov.

Spanish version, “Cómo Invertir en Acciones de Cannabis” on ElPlanteo.com.

Continue reading: BEST US CANNABIS STOCKS