Are These Marijuana Penny Stocks On Your Watch List Right Now?
It’s become a well-known fact that marijuana penny stocks have received the brunt of the market sell-off in 2020. That makes sense considering so many were already catching a beat down that really began last year. But as the election nears, the discussions on marijuana legalization and decriminalization are beginning to emerge once again.
Last week’s momentum stemmed from comments made by Vice Presidential candidate Kamala Harris at the VP debate. She said marijuana would be decriminalized at a federal level in the United States under a Biden administration. She also explained that the Biden administration would also expunge the criminal records of people convicted of marijuana-related offenses in the past.
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You can clearly see the optimism echoed by marijuana stock ETFs like the Cannabis ETF (THCX Report), which climbed to new October highs, extended a 5-day rally and experienced its highest, single-day share volume since March, on Friday.
What’s more, is that the sector also saw some excitement in light of the latest focus on the SAFE Banking Act. In particular, the Democrat-backed HEROES 2.0 package for stimulus relief included some verbiage on the matter. The SAFE Banking Act would allow banks and other financial institutions to work directly with state-legal marijuana businesses. So as the conversation grows around decriminalization at a federal level, more states are also pondering the option to bring in more tax revenue.
States Up For Vote On Marijuana Legalization (Rec And/Or Medical)
- South Dakota
- New Jersey
There’s no question that pot stocks will be part of the market discussion heading into the next few weeks. However, it’s important to keep in mind that volatility will also likely play a big role. As we’ve already seen with things like this pending stimulus vote, each small nuance tends to rock the market one direction or another. Understanding the high risk/reward scenario is important especially during times like these. Will these be on your list of penny stocks to buy or avoid this week?
Marijuana Penny Stocks To Buy [or avoid]: Charlotte’s Web Holdings Inc.
Charlottes Web Holdings Inc (CWBHF Stock Report) hit new 52-week lows last week. However, it promptly rebounded and closed just shy of its high of day at $3.30. The marijuana penny stock has been under heavy selling pressure since mid-June. This is when the company announced a C$77 million + offering. Big raises like this can easily make waves for any company, let alone cannabis companies.
The company also ran into some trouble after revealing its last round of earnings in September. Consolidated revenue came in at $21.6 million compared to $25.0 million in Q2-2019. However, like most retailers, direct-to-Consumer eCommerce sales increased. Charlotte’s Web saw these sale jump by 33.6% year-over-year which contributed 71.8% of Q2 revenue. Despite this being the case, the overall picture was more mixed recently.
One of the newest developments to consider with Charlotte’s Web is its Abacus Health Products, Inc. acquisition. The company provides over-the-counter topical products for pain relief and skincare containing CBD hemp extracts. With the increasing use of CBD in health and beauty, Charlotte’s Web has managed to expand its footprint.
The biggest question now, not only for CWBHF but for other marijuana penny stocks will be whether or not this recent bout of momentum can continue into the new week. We’ve typically seen pot stock breakouts fade after a few days of upbeat sentiment following industry-related catalysts. Will that be the case once again this week or can pot stock stay the course?
Marijuana Penny Stocks To Buy [or avoid]: Greenlane Holdings Inc.
Greenlane Holdings Inc. (GNLN Stock Report) also saw a jump in stock price last week. Unlike Charlotte’s Web, however, the bulk of its trading momentum was seen on Thursday and Friday. What’s more is that Greenalane is more of a “picks and shovels” type pot stock than anything else. Where many companies focus on cultivation, extraction, and the like, Greenlane takes a different approach. The company sells cannabis accessories and specialty vaporization products. Greenlane has also partnered with many of the industry’s leading brands, including PAX Labs, Storz & Bickel, Cookies, Grenco Science, and DaVinci.
Unlike many of the cannabis penny stocks this year, GNLN stock hasn’t shown as much of an aggressive downtrend. The recent bout of selling pressure initially stemmed from missed earnings results in August. Aside from missing EPS estimates, like Charlotte’s Web, Greenlane realized a strong uptick in direct to consumer e-commerce. It saw a 74% increase in orders, increasing to roughly 16,000 orders in the second quarter of 2020. “Despite the challenging economic conditions presented by the COVID-19 pandemic, we delivered solid Q2 top line revenue of $32.4 million and have continued to make progress towards improving our gross margin profile,” said Aaron LoCascio, Greenlane’s Chairman and Chief Executive Officer. “We continue to strategically allocate resources towards higher margin revenue opportunities, including accelerating the development of our portfolio of Greenlane branded products.”
Friday’s session was very notable. GNLN stock not only jumped 14.8% in the session, it also saw its highest, single-day share volume since last June. There weren’t any headlines to go along with this momentum and trading was mixed afterhours. So it will be interesting to see how GNLN stock starts the week come Monday’s opening bell.
Marijuana Penny Stocks To Buy [or avoid]: Akerna Corp.
Akerna Corp. (KERN Stock Report) has steadily climbed during the month of October. While it wasn’t as aggressive as either CWBHF or GNLN, KERN stock has now climbed $3.80 on October 1st to highs of $4.59 on Friday. Single-day share volume was also the highest for the month, on October 9th. Unlike the other companies mentioned above, Akerna actually had some company headlines to pair with the recent activity.
At the start of the month, the company announced an enhanced integration with Dutchie, one of the largest e-commerce solution for cannabis. It also processes roughly 10% of all legal cannabis transactions worldwide. The integration will provide an optimized experience for cannabis consumers, patients, and business operators according to Akerna.
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Further to this, Akerna announced that its solo sciences company began collaborating with Legion of Bloom, a cannabis producer in California. As part of the collaboration, Legion of Bloom will add the solo*CODE authentication tag to its vaporizer products. In light of that news, shares of KERN stock extended gains into the end of last week.
Marijuana Penny Stocks To Buy [or avoid]: Jushi Holdings Inc.
If you remember back to the beginning of the year, Jushi Holdings Inc. (JUSHF Stock Report) had just hit the cannabis market. Marked as potentially one of the best penny stocks to watch in Canada that week, Jushi had just raised money to expand its product offering.
Jushi is one of the North American-focused cannabis companies. In the US, the company has focused on creating a portfolio of multi-state operators. Currently, its portfolio holds brands like Nira, Beyond/Hello, The Lab, and The Bank. JUSHF stock is clearly unlike many others as far as its chart is concerned. Since we began following the company, JUSHF shares have climbed significantly. In fact, on Friday, the marijuana penny stock reached a new 52-week high of $2.70; up over 100% since we began discussing the company.
In the wake of government-related headlines, Jushi also had its own milestones to discuss last week. The company announced it will enter California with the opening of its 11th retail location nationally: BEYOND / HELLO™ Santa Barbara. Earlier this year, the company bought GSG SBCA, Inc., a licensed cannabis dispensary in Santa Barbara, and signed a $3.2 million sale-leaseback agreement with a financing partner related to the real estate previously purchased in connection with the acquisition of GSG SBCA, Inc.
As with most penny stocks at 52-week highs, the bigger discussion will likely entail the future of this trend. Is JUSHF stock due for a pullback or are new 52-week highs in tow?