Marijuana Penny Stocks Are Trading Higher On MORE Act Speculation; Will That Last?
If there was a week to be watching particular penny stocks, this might be that week. As we discussed over the weekend, there’s a big vote planned this week. It will be on the MORE Act and had everything to do with cannabis. House Majority Leader Steny Hoyer (D-MD) said the chamber will take up the MORE Act sometime between Wednesday and Friday. The Marijuana Opportunity, Reinvestment, and Expungement or – MORE – Act aims to decriminalize cannabis and expunge convictions for non-violent cannabis offenses. These are things that have prohibited many Americans from getting jobs and even applying for credit.
This creates an interesting environment for marijuana stocks. While we’re talking specifically about marijuana penny stocks, the broader sector trend could be influenced by the outcome of this vote.
Whether or not this will ultimately pass is up in the air. President-elect Joe Biden’s campaign supported changing federal cannabis laws. But as we’ve seen many times, once it comes up for vote, it typically gets denied. Will that be the case again or is a new era coming for the cannabis industry? Keep this in mind when looking at marijuana stocks especially this week.
Marijuana Penny Stocks To Watch: Columbia Care Inc.
Columbia Care Inc. (CCHWF Stock Report) has been one of the slow and steady moving pot penny stocks to watch this year. Ever since selling off in March, shares have moved up from around $1.40 to recent highs this quarter of $4.50.
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Columbia has licenses in 18 US jurisdictions and the EU. It currently operates 100 facilities including 76 dispensaries and 24 cultivation and manufacturing facilities. Its products include flower, edibles, oils, and tablets. Columbia also manufactures popular brands such as Amber and Platinum Label CBD.
This week the company completed its latest acquisition of Project Cannabis. It’s a cannabis cultivator, wholesaler and retailer in Los Angeles, California and extends Columbia’s footprint into the state. Project Cannabis will cross-sell Columbia Care’s product lines, leveraging its long-standing distribution network of over 100 dispensaries across California.
Marijuana Penny Stocks To Watch: Greenlane Holdings Inc.
Greenlane Holdings (GNLN Stock Report) is another one of the marijuana penny stocks that’ve gone into rally mode in 2020. It reached lows of $1.02 in March and has since hit new 52-week highs of $4.75 this week. Unlike most cannabis companies when you think of the typical marijuana stock, GNLN is more of a pick and shovel company.
The company sells cannabis accessories. These are things like vaporizers, packaging, and other smoking products. In line with this, Greenlane’s latest update highlighted the newly signed distribution deal with Stündenglass™. This brings the company’s “Gravity Hookah” to consumers in the US, Canada, and the EU.
While a number of companies struggled in 2020, Greenlane’s latest earnings reveal strength this year. Core revenues expanded 36% compared to last year’s Q3. Furthermore, Greenlane Brand sales grew roughly 65% to $5.6 million compared the previous year.
Marijuana Penny Stocks To Watch: Organigram Holdings Inc.
While it isn’t a US cannabis company, Organigram Holdings (OGI Stock Report) is one of the handfuls of marijuana stocks on Robinhood. As such traders looking for any type of exposure to the industry have shown interest in relatively any pot stock on the app. Needless to say, Organigram stock appears to have benefited from the recent market momentum over the last few weeks. Yesterday, OGI stock put in a December high of $1.47, which extended a 6-day run to 31%. Following a slight pullback on Wednesday morning, OGI stock closed green by just over 10%.
Unlike Greenlane, Organigram posted an EPS loss worse than its 2019 fiscal Q4. However, it was able to record sales much higher this quarter compared to last year’s. On the company’s conference call, Greg Engel explained several initiatives being worked on for fiscal Q1 of 2021.
“We are looking at starting to increase our cultivation production — and production…We are still in the midst of the portfolio revitalization and we’ve got new SKUs coming to market…we are excited to bring those new products into market not only for the ones we’ve brought in Q1, but also into Q2.”
Marijuana Penny Stocks To Watch: KushCo Holdings
KushCo Holdings (KSHB Stock Report) has experienced its own share of pot stock momentum recently. While it has been relatively sideways for the last 9 months, KSHB stock has performed well during short term timeframes. The stock had breakouts in late-March, late-May, and several times in October and November. Most recently, however, KSHB stock has managed to do something not seen all year. It broke and held above (for now) its 200 day moving average.
Beginning on November 20th, the marijuana penny stock has climbed. Shares jumped from around $0.65 to recent highs this week of $0.9799. Aside from participating in a few industry conferences, something to keep in mind is KushCo’s last update. The company partnered with United Pacific and expanded its CBD distribution across gas stations and convenience stores in the Western US.
“The United Pacific collaboration represents a massive new footprint for our brands and will provide an opportunity to meaningfully connect with millions of consumers annually. We will provide United Pacific’s store management team with the training and knowledge needed to position their CBD Wellness Centers for success.”Nick Kovacevich, KushCo’s Co-founder, Chairman and Chief Executive Officer
Marijuana Penny Stocks To Watch: 22nd Century Group Inc.
While not your traditional marijuana penny stock, 22nd Century Group Inc. (XXII Stock Report) has some exposure to the cannabis arena. The company’s main focus is on its tobacco with lowered nicotine and nicotine alkaloids in it. In addition, 22nd Century is developing cannabis with different levels and types of cannabinoids.
22nd Century focuses primarily on its Modified Risk Tobacco Product (MRTP). It’s looking to obtain authorization from the FDA for its VLN® product. However, more recently the company seems to have become more vocal on the cannabis side of things. 22nd Century’s strategy is to target different segments of the industry, initially targeting plant biotech research, breeding, and extraction.
The company said that it also identified a plant-based franchise with similarities to the hemp/cannabis plant. 22nd Century is in the process of securing IP around this franchise. So while it’s still a younger initiative, it could be something to keep in mind if XXII is on your list of penny stocks to watch right now.
Keep Risk In Mind With Marijuana Penny Stocks Right Now
I want to close by saying to pay attention to the risk side of this scenario right now. While it may not leave a long-lasting detriment to the industry but a negative result to this MORE Act vote could bring some short term volatility. As we’ve seen with plenty of the other government-related industry events, traders will focus on the short-term catalyst, while the longer term prospects remain relatively unchanged. Just look at some of the names on this list. The overall trend for some has been steadily increasing with intermittent periods of selling mainly due to negative industry-related headlines. However, if you lookin at marijuana penny stocks because of this MORE Act vote, speculation may be playing a much bigger role right now.