Penny stocks have been heavily focused on over the years. But no industry has seen more attention on these cheap stocks than the cannabis industry.
Pot stocks were in the middle of a lump for much of the summer. But after the impressive earnings posted by many of the companies in the sector; there is some newfound optimism among investors. In such a situation it may be time to look at some pot penny stocks as well.
That’s considering the fact that a rising market could lead to significant gains in certain marijuana penny stocks. However, you need to be very diligent with your research if you want to invest in penny stocks. Keeping an eye on the market is the best way of going about it.
Something to also pay close attention to is the timing of certain industry events. Later this year, Canada will officially legalize cannabis derivatives for retail sales consumption. That even could act as a focal point for those looking for pot penny stocks to buy. On that note, here is a look at two marijuana penny stocks to watch.
Penny Stocks To Buy Or Watch #1: Harvest Health & Recreation (HARV) (HRVSF)
The first on this list of marijuana penny stocks to watch, Harvest Health & Recreation Inc (HARV Stock Report) (HRVSF), continues to be under the radar of many investors. That isn’t shocking considering HARV stock has lost 50% from its highs this year. But it may still have ample opportunity for growth. While cannabis is legal in 11 states in the United States, it is the uncertainty about federal-level legalization that has dragged stocks like Harvest Health down.
The company performed impressively well in the second quarter of 2019. It ended up generating $78 million in proforma revenues during the period. That’s right up there with giants like Canopy Growth and Aurora Cannabis. The company expects to hit $900 million-$1 billion in sales in 2020.
On top of that, Harvest Health expects to have in excess of 120 dispensaries spread across 5 states by next year. Therefore, it’s no wonder why analysts believe it could prove to be a high growth stock in the long term. Given this, however, will it be a penny stock to buy or just watch for now?
Penny Stocks To Buy Or Watch #2: MediPharm Labs (LABS) (MEDIF)
The other cannabis company could find its way onto investors’ watch lists is MediPharm Labs Corp (LABS Stock Report) (MEDIF). The company is involved in extraction services and it provides these services to some of the biggest names in the cannabis industry.
Considering the impending legalization of derivative products in Canada this year, extraction services are likely to be in huge demand. That could make LABS stock an interesting one to watch.
In Q2 2019, the company posted revenues of C$31.5 million, which reflected a rise of 43% from the previous quarter. On the other hand, gross profits stood at C$11.3 million. It’s not a surprise that analysts are following closely. Right now Canaccord Genuity Corp., GMP Securities, Roth Capital Partners, and Scotia Capital Inc. are all listed as covering LABS stock.