Marijuana penny stocks are back on the radar again in 2021 after a slowdown. Investor appetite is picking up again as the market is in overdrive. The enthusiasm is driven by the belief opportunities will arise for pot companies to profit as more states legalize CBD oil, hemp and cannabis for recreational and medicinal reasons.
15 U.S. states have voted to legalize the recreational use of the drug. Other nations such as Canada already legalized the medicinal use which opens up more investment opportunities.
Despite the profit potential we recommend analyzing the underlying fundamentals of these companies before investing. A large number of MJ small caps doesn’t deserve such crazy valuations and are destined to fail in the long run. Luckily, we’ve put together a list of the better companies worth watching.
Marijuana Penny Stocks to Follow
Cara Therapeutics Inc (NASDAQ:CARA)
Founded in 2004 and headquartered in Shelton, Connecticut, Cara Therapeutics 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. Cara Therapeutics 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. Since recommending CARA as a buy at $5.97 it has gone on a wild ride. Peaking at $25.98 in July 2019 and currently trades under $20.
Aurora Cannabis (TSE: ACB)
The Vancouver based company is engaged in cultivating, harvesting, and selling medical marijuana in Canada. It uses water from the Canadian Rocky Mountains to bring the cannabis plants to harvest in their 55,200 square feet facility. Aurora Cannabis provides high-quality medical cannabis, offering the following prices to its patients: (1) $8/gram strain pricing, (2) $5/gram composite pricing.
The company’s stock price has grown more than 300% since I first posted about the business. Aurora are buying up competitors as they want to dominate production and retail. Expect shares to be volatile in the near future!
Canopy Growth Corporation (TSE:WEED)
Canopy Growth, formerly known as Tweed Marijuana Inc., is the largest producer of medical marijuana in Canada. It is engaged in production and sales of medicinal marijuana under its Tweed and Bedrocan brands.
Since October 2020, the stock price has soared from $18.69 over $50. Canopy Growth boasts 665,000 square feet of indoor greenhouse production capacity. After numerous acquisitions, their production capacity now stands at an impressive 40,000 kilograms per year. Despite the company’s phenomenal growth I think they are overvalued and shares will pull back. Although they face challenges in the future they are well positioned to capitalize on huge demand for various marijuana products within Canada.
Aphria Inc (TSE:APH)
Aphria Inc is another big player in the medical cannabis sector profiting from the Canadian market. They sell and transport medical cannabis oil to customers globally.
Since 2015 revenue has grown significantly from $550,000 to over $53.97 million (CAD) so far. Similarly to other businesses in the sector they are ramping up production. Their low production costs, strong earnings, and solid growth makes them an exciting investment.
Zynerba Pharmaceuticals Inc (NASDAQ:ZYNE)
Founded in 2007, Zynerba 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 ZYN001, which enables transdermal delivery through a patch, is intended to be tested for application to the arm, back and thigh.
Zynerba will study ZYN001 for the treatment of fibromyalgia and peripheral neuropathy and aim to become the second FDA approved marijuana-based treatment behind GW Pharmaceuticals. It’s worth noting, Zynerba’s pipeline is still in the early stages of development. Investors can only hope studies on treating autism and epilepsy continue to release positive results. I would wait until more studies are available before adding this company to your portfolio.
American Cannabis Company Inc (OTCMKTS:AMMJ)
American Cannabis Company incorporated in 2001 and provides solutions for cannabis 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.
Consulting services include commercial business planning, business license applications, cultivation build-out consulting, regulatory compliance, compliance audit services, business growth strategies, and business monitoring services.
The company also provides products and equipment such as Satchel, SoHum Living Soil, High Density Racking System and The Cultivation Cube. American Cannabis Co was one of the biggest runners in 2016, the penny pot stock went from $0.11 to $1.50 and now trades at $0.42. AMMJ only has a market cap of about $30 million with last quarters gross income of 1.34 million. Risky investment due to how small the business but definitely a stock worth following.
Cannabis Sativa Inc (OTCMKTS:CBDS)
The business is based in Nevada and has been in operation since 2005, though it only went public five years ago. Cannabis Sativa develops and promotes natural cannabis products through its online website and Amazon. A number of their products contain CBD, a chemical compound found in hemp plants that potentially have medicinal uses.
This tiny penny weed stock has the license for a medicinal cannabis strain, namely NZT, a cannabis lozenge delivery technique and a cannabis trauma cream formula. Cannabis Sativa has tripled since the start of 2021 and currently trades at $1.14
Medical Marijuana Inc (OTCMKTS:MJNA)
Incorporated in 2005, and still being in the development stage, they provide a wide range of products, services and technologies for the medical marijuana and industrial hemp sectors. These include cannabinoid-based products, such as cannabinoid chewing gum, new extraction technologies, and isolated high value extracts developed for the pharmaceutical, cosmetic and nutrition industries. Despite enjoying strong gains over the years the penny stock lost 90% of its value since the IPO back in 2009 but recently spiked in January 2021. Trades just under ten cents per share.
Terra Tech Corp (OTCMKTS: TRTC)
Terra Tech Corp is a medical marijuana penny stock that focuses on cannabis agriculture and is located in Irvine, California. They design and sell hydroponic equipment along with their proprietary technology for the cultivation of indoor agriculture. TRTC operates through various subsidiaries including MediFarm, IVXX, Blüm and Edible Garden. Terra Tech’s revenue has been in a gradual decline since 2016 and will need to work on controlling costs to turn around the business.
KushCo Holdings (OTCMKTS:KSHB)
KushCo Holdings helps entrepreneurs enter the cannabis business. They sell packaging, containers, and other related products for the cannabis industry. Based in California, they provide an all-in-one solution to help reduce the barriers to entry in an industry that is heavily regulated. Kush is one of the biggest distributors of marijuana packaging and supplies. The company was steadily growing revenues for four years but 2020 was a bad year financially and will take a while to recover.