Marijuana Stocks Are Jumping Again; Can The Rally Continue?
One of the important things to keep in mind with regards to penny stocks is that these are stocks that can often generate substantial returns in a short timespan. However, it should be noted that an investor needs to choose the right sector when it comes to the best penny stocks to buy.
The cannabis sector may have gone through some troubles over the past few months, but there are some pot penny stocks that recently jumped. Here is a look at three marijuana stocks that have ridden the wave of bullish pot names this week. These stocks could definitely be in the watch lists of most investors this week.
Marijuana Penny Stocks Are Moving Up This Week
On Wednesday, Canopy Growth (WEED.TO) (CGC Stock Report) is one of the biggest cannabis companies in the world. It jumped by as much as 15.15% at one point and the rally in the stock also resulted in a rally in pot penny stocks too.
Aurora Cannabis (ACB Stock Report) rose by as much as 52% as well, while HEXO Corp (HEXO Stock Report) enjoyed a rise of 73% in 3 days. Other notable winners include Acreage Holdings Inc (ACRGF Stock Report) which has soared 54% and Organigram (OGI Stock Report) went up 44% this week. This was also echoed across some of the major pot stock ETFs as well:
Pot Penny Stock HEXO Continues to Move Higher; Up 73% In 3 Days
In the case of HEXO, it was particularly important considering the fact that the stock had tanked by 14.8% on Tuesday. Christopher Carey, the analyst at Bank of America upgraded the Canopy Growth stock from neutral to a buy rating. This upgrade resulted in a knock-on effect of sorts on Aurora Cannabis and Hexo.
In addition, HEXO stock has attracted attention from bigger hands. A 13G filing from ETF Managers Group shows an increased stake in the company. The firm increased its position from 10.1 million shares to 13.5 million shares. Its position now equates to a 5.24% stake in the company.
Pot Penny Stock Aurora Stock Soared 52%
However, in the case of Aurora, it should be noted that the company had also made a significant announcement. On Tuesday, the company had announced that as many as 94% of the holders of its convertible debentures, which were to mature in March next year, have agreed to convert it to ACB stock.
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That is a significant development for the company and must have had an influence on the price action. Considering the fact that Aurora would have had to cough up CA$230 million in March to pay off those debts, it is definitely a boost for the company.
The poor performance from Aurora and Canopy growth is primarily due to the slow rollout of stores in Canada. One of the states that have been the source of most problems in Ontario, however, it has been reported that the state is going to be far more committed towards retail rollout from now on. On the other hand, the situation in Hexo is different. The company’s CEO has stated that it needs to corner 20% of the market in Canada in order to get profitable.
Aphria (APHA) Goes The Distance; Up 38% Since Tuesday
Aphria (APHA Stock Report) was among the list of penny stocks rallying out of penny stock territory this week. Shares of APHA stock ran from $3.76 to $5.18 during the middle of the week. The company announced news this week as well. The company added seven new directors.
Additionally, Aphria promoted other members to executive positions. Denise Faltischek came on as Chief Strategy Officer. Tamara Macgregor is now the Chief Corporate Affairs Officer. She was previously Aphria’s Vice President of Communications & Public Affairs. Megan McCrae was bumped up to Chief Marketing Officer. This was from the previous position of VP of Marketing. Finally, Bernie Yeung joined as VP of Sales & Channel Strategy.
Interim CEO Irwin Simon said in a press release, “We have assembled a strong team of leaders, including our existing executives who made significant contributions to help transform Aphria into a leading global cannabis company, combined with new key hires, that together will provide a robust depth of experience in the key areas of operations, strategy, sales and marketing, IT and human resources to support our long-term growth opportunities domestically and internationally.”
Why Are These Penny Stocks Jumping This Week?
It isn’t just penny stocks that are rallying in the cannabis industry this week. The entire sector is making a bullish move. As discussed in previous articles, stocks of all prices can breakout without any specific corporate news if a sector move is underway. This week we’ve seen exactly that with marijuana penny stocks. Though volatility is still a factor, for now, weed names are high on investors’ lists of stocks to watch.
[Read More] 5 Penny Stocks To Watch After Latest Marijuana Industry Move
Yesterday we discussed this in detail as we watched the first phase of what could become federal legalization of cannabis in the US. The House Judiciary Committee voted in favor of an Act that could present such a case. Dubbed the MORE Act or Marijuana Opportunity Reinvestment and Expungement Act, this could open the door to the US pot industry.
The Act looks to give power to the states and allows them to decide legislative matters regarding cannabis legalization. It also includes a plan that could expunge convictions related to cannabis infringements as well. One thing’s certain and that is investors who’ve long-awaited a bull market in marijuana could at least be seeing a mini version of it this week. Thanks to this broader industry event, bullish sentiment has rung out across the sector. The question now is can it continue?
