Here are some of the best pot penny stocks to follow during 2016 as they will be extremely volatile in November because of the upcoming vote to legalize marijuana in some states. These states include California, Nevada, Arizona, Maine, Florida, North Dakota, Arkansas, Massachusetts and Montana. (Checkout my other blog post on the best penny stocks to buy this year) Although some companies in recent times within this sector have doubled or even tripled in price, they are financial train wrecks destined to fail in the long term. People new to trading are investing $500 expecting to strike it lucky when in reality these businesses are terrible investments. They are struggling to survive, crippled with debt and very little revenue to support their operations. I’ve seen old defunct mining companies just add the word “Cannabis” to their name to cash in on the craze. People never learn, this is the third iteration of investor mania around weed stocks, the end result is always is always the same. If you’re going to trade these stocks don’t get caught holding the bag, my guess is once legislation is passed shares prices will drop sharply.
1. Cara Therapeutics Inc (NASDAQ:CARA).
Founded in 2004 and headquartered in Shelton, Connecticut, this clinical-stage biopharmaceutical company develops product candidates targeting the body’s peripheral nervous system. I.V. CR845, Cara’s lead product candidate, is in Phase III clinical trials, designed to treat acute postoperative pain in adult patients. The company is also engaged in developing lead molecules that are supposed to selectively modulate peripheral CB receptors without targeting CNS cannabinoid receptors. It’s most advanced CB compound is CR701, which is currently in a stage of preclinical development for treating neuropathic and inflammatory pain. The company will benefit because the development of marijuana-based analgesics is anticipated to shift toward CB2 receptors. The analysts are overly positive on the company, despite the fact that the stock price dropped more than 62 percent from the beginning of the year. The mean recommendation is 1.6 (1 – Strong Buy and 5 – Sell) with average price target of $20.33 (current price is $5.97).
2. AURORA CANNABIS IN COM NPV (OTCMKTS:ACBFF)
The Vancouver based company is engaged in cultivating, harvesting, and selling medical marijuana in Canada. It uses water from Canadian Rocky Mountains to bring the cannabis plants to harvest in their 55,200 square feet facility. The company provide high quality medical cannabis, offering the following prices to its patients: (1) $8/gram strain pricing, (2) $5/gram composite pricing. It also offers free shipping in Canada. The company’s stock price has grown more than 90 percent from the beginning of the year.
3. CANOPY GROWTH CORP COM NPV (OTCMKTS:TWMJF)
Canopy Growth Corporation, formerly known as Tweed Marijuana Inc., is the largest producer of medical marijuana in Canada. It is engaged in production and sales of medical marijuana in Canada under its Tweed and Bedrocan brands. The company has over half a million square feet of indoor greenhouse production capacity. It also acquired Bedrocan Cannabis Corp. in 2015 for approximately $58 million. YTD the stock price grew 37.81 percent.
4. Zynerba Pharmaceuticals Inc (NASDAQ:ZYNE)
Founded in 2007, this pharmaceutical company is focused on developing and commercializing synthetic cannabinoid therapeutics developed for transdermal delivery. Its two product candidates are ZYN002 and ZYN001. ZYN002 represents a synthetic cannabidiol (CBD), a permeation-enhanced gel for transdermal delivery, made to provide controlled drug delivery with once- or twice-daily dosing. The ZYN001, which enables transdermal delivery through a patch, is intended to be tested for application to the arm, back and thigh. The company will study ZYN001 for the treatment of fibromyalgia and peripheral neuropathy. The stock price has grown moderately during this year, rising 6.45 percent YTD. The analysts’ mean recommendation is 1.4 (1- strong buy and 5 –Sell) with an average price target of $30.25 (current price is $10.23).
5. American Cannabis Company Inc (OTCMKTS:AMMJ)
The company, incorporated in 2001, provides solutions for cannabis industry businesses in the U.S. and Canada. The company’s operations can be divided into two main components: (1) advisory and consulting services, and (2) sale of products and equipment for customers in the cannabis industry. The offered consulting services include commercial cannabis business planning services, cannabis business license applications, cultivation build-out consulting, cannabis regulatory compliance, compliance audit services, cannabis business growth strategies, and cannabis business monitoring services. In addition to its consulting business, the company provides products and equipment such as Satchel, SoHum Living Soil, High Density Racking System and The Cultivation Cube.
6. Cannabis Sativa Inc (OTCMKTS:CBDS)
The company is based in Nevada and operates for about 12 years, though it went public only recently. It is engaged in developing and promoting natural cannabis products. It has the license for a medicinal cannabis strain, namely NZT, a cannabis lozenge delivery technique and a cannabis trauma cream formula.
7. Medical Marijuana Inc (OTCMKTS:MJNA)
Incorporated in 2005, and still being in its development stage, the company provides a wide range of products, services and technologies for the medical marijuana and industrial hemp sectors. These includes cannabinoid-based products, such as cannabinoid chewing gum, new extraction technologies, and isolated high value extracts developed for the pharmaceutical, cosmetic and nutrition industries.