fbpx

Best Marijuana Penny Stocks Right Now

Benzinga Money is a reader-supported publication. We may earn a commission when you click on links in this article. Learn more.

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 penny stocks. 

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 Marijuana penny stocks can bring value to your investment portfolio.

Highlighted Marijuana Penny Stocks:

Symbol Company Change Price Invest
ACB Aurora Cannabis
– 1.83%
$13.94 Buy stock
APHA Aphria
– 0.79%
$4.39 Buy stock
TLRY Tilray
– 6.05%
$9.48 Buy stock
CRON Cronos Group
– 1.35%
$6.60 Buy stock
CGC Canopy Gwth
– 0.64%
$16.51 Buy stock

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.

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. 

At this time, most states have made CBD or low THC programs legal. However, marijuana remains completely illegal in Idaho, Wyoming, Wisconsin, Tennessee, South Dakota, Alabama, South Carolina and Kansas. 

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 stocks 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 favorites.

TD Ameritrade
Commissions
$0 $6.95 for OTC Stocks
Account Min
$0
Get started securely through TD Ameritrade’s website
Commissions
$0 $6.95 for OTC Stocks
Account Min
$0
1 Minute Review

This publicly listed discount broker, which is in existence for over four decades, is service-intensive, offering intuitive and powerful investment tools. Especially, with equity investing, a flat fee is charged, with the firm claiming that it charges no trade minimum, no data fees, and no platform fees. Though it is pricier than many other discount brokers, what tilts the scales in its favor is its well-rounded service offerings and the quality and value it offers its clients.

Best For
  • Novice investors
  • Retirement savers
  • Day traders
Pros
  • World-class trading platforms
  • Detailed research reports and Education Center
  • Assets ranging from stocks and ETFs to derivatives like futures and options
Cons
  • Thinkorswim can be overwhelming to inexperienced traders
  • Derivatives trading more costly than some competitors
  • Expensive margin rates
TradeStation
Commissions
$0
Account Min
$0
Get started securely through TradeStation’s website
Commissions
$0
Account Min
$0
1 Minute Review

TradeStation is for advanced traders who need a comprehensive platform. The brokerage offers an impressive range of investable assets as frequent and professional traders appreciate its wide range of analysis tools. TradeStation’s app is also equally effective, offering full platform capabilities.

Best For
  • Advanced traders
  • Options and futures traders
  • Active stock traders
Pros
  • Comprehensive trading platform and professional-grade tools
  • Wide range of tradable securities
  • Fully-operational mobile app
Cons
  • Confusing pricing structure to leave new traders with a weak understanding of what they pay
  • Cluttered layout to make navigating TradeStation’s platform more difficult than it should be
Commissions
Free
Account Min
$0
Get started securely through Webull’s website
Commissions
Free
Account Min
$0
1 Minute Review

Best For
Pros
Cons

Features to Look for in Marijuana Penny Stock

Management: The success of marijuana 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. 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. 

Marijuana Penny Stocks to Watch Out for This Year

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

1. Aurora Cannabis (NYSE: ACB)

This company based in Edmonton, Canada, produces, distributes and sells various marijuana products. Management has expressed goals to target higher-margin retail space. Aurora Cannabis also has one of the largest international presences out of all marijuana stocks. 

It has outsourced various business development tasks such as production and research to 25 countries, including Canada. For 2019, the company reported EPS at a loss of $-0.22. Its most recent EPS came in at $0.22.

2. Aphria (NYSE: APHA)

Aphria is a pharmaceutical company that researches, produces and distributes marijuana. While Aphria focuses primarily on medical marijuana distribution, it operates several brands that focus on the recreational segment. Headquartered in Leamington, Canada, it is one of the largest marijuana companies in the country. 

Over the past several years, the company has invested heavily in production facilities and innovation. Since 2018, it has entered the Latin American and German markets through acquisitions of LATAM holdings and CC Pharma. The company reported an EPS of $-0.05 for 2019. It’s most recent EPS came in at $0.30. 

3. Tilray (NASDAQ: TLRY) 

Tilray is a Canadian company that engages in researching, cultivating and distributing marijuana. It sells medical marijuana across international markets such as Australia, New Zealand, Canada, the EU and Latin America. It also sells marijuana for adult recreational use through its High Park subsidiary. 

Management has emphasized expanding international sales, improving business efficiency and reducing costs as primary goals. The company reported an EPS of $-3.20 for 2019. It’s most recent EPS came in at $-3.20. 

4. Cronos Group (NASDAQ: CRON)

Cronos produces and distributes marijuana across 5 continents. The company operates recreational marijuana brands such as COVE and Spinach. They also operate CBD brands such as Lord Jones and PEACE+. Cronos Group is based in Toronto, Canada. 

The company’s business model emphasizes research and product innovation. The company reported an EPS of $3.33 for 2019. It’s most recent EPS came in at $2.71. 

5. Canopy Growth (NYSE: CGC)

Canopy Growth produces, researches and sells marijuana for both medical and recreational purposes. The company, based in Smith Falls, Canada, has operations that reach across North America, South America, the Caribbean, Australia and the EU. 

The company focuses heavily on producing innovative marijuana products including beverages, chocolates, vapes and oils. Canopy Growth reported EPS of $-1.96 for 2019. It’s most recent EPS came in at $-1.79.

Biggest Marijuana Penny Stock Movers of the Day

One strategy for finding a promising stock is by periodically checking the premarket movers of the day. This will give you a sense of which companies outperform others. 

Gainers

Session: Jun 4, 2020 4:00 pm – Jun 5, 2020 3:59 pm
Symbol Open Close Change Change % Volume
Buy HEXO Stock – Trade For Free HEXO
HEXO
0.73 0.80 0.07 10.23% 13.33M
Buy NBEV Stock – Trade For Free NBEV
New Age Beverages
1.61 1.70 0.09 5.59% 1.13M
Buy IIPR Stock – Trade For Free IIPR
Innovative Industrial
90.23 93.30 3.07 3.40% 14.00K
Buy OGI Stock – Trade For Free OGI
OrganiGram Holdings
1.75 1.77 0.02 1.14% 2.55M
Buy GWPH Stock – Trade For Free GWPH
GW Pharmaceuticals
127.34 128.05 0.71 0.56% 13.05K

Losers

Session: Jun 4, 2020 4:00 pm – Jun 5, 2020 3:59 pm
Symbol Open Close Change Change % Volume
Buy TLRY Stock – Trade For Free TLRY
Tilray
10.09 9.48 -0.61 -6.05% 6.05M
Buy SMG Stock – Trade For Free SMG
The Scotts Miracle Gro
139.09 134.26 -4.83 -3.47% 32.02K
Buy CARA Stock – Trade For Free CARA
Cara Therapeutics
15.62 15.36 -0.26 -1.66% 29.00K
Buy CRON Stock – Trade For Free CRON
Cronos Group
6.69 6.59 -0.10 -1.49% 3.02M
Buy XXII Stock – Trade For Free XXII
22nd Century Group, Inc. Common Stock
0.80 0.79 -0.01 -1.19% 52.65K
Buy APHA Stock – Trade For Free APHA
Aphria
4.43 4.38 -0.04 -1.01% 2.25M
Buy CGC Stock – Trade For Free CGC
Canopy Gwth
16.62 16.52 -0.10 -0.60% 2.66M

How to Diversify Your Portfolio with Marijuana Penny Stocks

Marijuana 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. 

Consider mitigating risk by diversifying your portfolio. You can do this by holding onto safer assets — like bonds, consumer staples stocks or REITs. In all, marijuana penny 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.

Final Thoughts

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.

Benzinga's #1 Breakout Stock Every Month

Looking for stocks that are about to breakout for gains of 10%, 15%, even 20% potentially or more? The only problem is finding these stocks takes hours per day. Fortunately, Benzinga's Breakout Opportunity Newsletter that could potentially break out each and every month. You can today with this special offer:

Click here to get our #1 breakout stock every month.