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.

Normally penny stocks don’t pay a dividend to investors as they are small companies with lower revenues. Financially it doesn’t make sense for these companies to pay out a dividend because they need the capital to reinvest and grow their business. However, surprisingly there are some dividend paying penny stocks under $5 on the Nasdaq and NYSE. The companies picked below are risky investments but at least with a dividend yield above 3% it does slightly lower your risk.

*Make sure to perform your own due diligence before investing, don’t invest just because a certain company has a high dividend yield.

Table last updated July 26th 2020

How to Find Penny Stocks Paying a Dividend

The best way to find suitable stocks is using a stock screener such as Finviz. Simply go to Finviz.com and click on the screener tab which is at the top left of the page. Then you be able apply filters to screen through thousands of stocks across all the major markets. They have a free plan that is more than enough for our needs, for advanced filtering you’ll need to sign up to their paid plan. The four main filters to use – Market Cap, Dividend Yield, Average Volume and Price.

• Market cap is the total value of company’s outstanding shares. For penny stocks the market cap setting should be ‘Micro’ or ‘Small Cap’.
• Dividend Yield is a financial ratio that is calculated from dividing a stocks total dividend payments to shareholders by its market cap. Typically investors are looking for a dividend yield of at least 3% per year.
• Average volume is the number of shares traded per day. Penny stocks can illiquid so I only recommend trading stocks that you can easily buy and sell. You should avoid illiquid stocks like the plague, for this setting I wouldn’t go any lower 50,000.
• Price is set to $5 but you can slightly raise it find safer investment opportunities.

Penny Stock Risks

The majority of penny stocks are terrible companies that struggle to survive financially but there are some diamond in the rough. Most will drop in share price overtime as they fail to become profitable and establish a viable business model. Others will produce explosive returns of 100%-500%. To reduce your level of risk, going with a small cap stock paying a dividend is a strategy worth exploring. For example buying 10,000 shares of a stock trading at $1 with a dividend of $0.05 per share means a return of $500 each year. Over a year, even if the stock drops to $0.95 you’ll be at a breakeven point discounting broker fee’s.

Oil penny stocks are among the hottest investments to watch at the moment as coronavirus outspread has deepened oil industry problems. Indeed, the record output cuts from OPEC+ failed to stabilize prices and investor’s sentiments because the steep drop in demand has been weighing on oil prices.

The oil demand dropped close to 25m barrels a day in March with expectations for a similar decline in April. Meanwhile, OPEC and its allies agreed to slash oil production by 9.7m barrels a day that will begin from May and extends to the end of June; the output cut will reduce to around 7m barrels a day through the second half of this year. The US President has also been playing a role in cutting supplies to blaster the prices, aimed at supporting the US oil industry that is providing hundreds of thousands of jobs to Americans.

The oil price selloff has wiped off close to 50% of the value of big oil companies year-to-date while small-cap oil stocks lost up to 90% or more in 2020. Brent crude is currently trading around $30 a barrel while US oil is hovering close to $20 a barrel.

However, oil prices are unlikely to trade in that range over the long-term as demand trends are likely to bounce back once the coronavirus impact fades. The production cuts would also help in strengthening prices and matching supply with demand. Therefore, it’s a perfect time to watch hot oil penny stocks that have the potential to stand taller during the pricing headwinds.

Chesapeake Energy

Chesapeake Energy stock price lost close to 90% of value since the beginning of this year on oil price volatility. Its shares are currently trading around $0.13 with the market capitalization of $310m. The massive debt load along with lower oil prices are weighing on Chesapeake Energy stock price performance. Its board has approved a 1-for-200 reverse stock split to comply with the $1/share minimum bid price requirement for listing on the NYSE. The company plans to make asset sales combined with big restructuring actions to face the pricing headwinds and to repay its debt.

Gulfport Energy

Gulfport Energy is a hot oil penny stock to watch because its stock price tumbled close to 75% this year on oil prices and debt crisis. It has $2bn of total debt at the end of the latest quarter while the available liquidity stood at $643m. The company has started looking at the options to service its debt load; Gulfport has started working with Perella Weinberg Partners and its energy advisory arm Tudor Pickering Holt for debt restructuring. Its revenue declined more than 30% in the latest quarter while the net loss came in at $11.36 per share.

Whiting Petroleum

Whiting Petroleum also stands among the oil penny stocks to watch because it was once the largest oil producer in North Dakota’s Bakken Shale. The company has recently filed for Chapter 11 bankruptcy protection. It currently has around $585m of cash on hand with $2.9bn of debt that includes a $770m of bond that matures next year. The company also claims that comprehensive restructuring actions will help it in reducing the debt and establishing a more strong capital structure.

Oasis Petroleum

Oasis Petroleum turned into a penny stock following the massive share price collapse in the past couple of months. The market analysts have downgraded Oasis ratings following the oil price slump in the last two months. Piper Sandler equity researchers provided an “Underweight” rating from earlier “Neutral” ratings. JP Morgan has also dropped OAS shares to “Underweight” rating. Its upcoming debt maturities and negative free cash flow generation could create problems for the company.

SM Energy

SM Energy shares price fall of 80% this year has forced the company to slashed its dividend by 80% to save cash in the wake of lower oil prices. Its oil production accounted for 45% of fiscal 2019 total production of 48.3 MMBoe. The company had generated more than $800m in operating cash flows last year which helped it in dropping net debt-to-adjusted EBITDA to 2.8 times.

The coronavirus pandemic is wreaking havoc across the world, death tolls are rising at an alarming rate and stock markets experiencing wild swings that are making investors nervous. Millions of workers have been laid off and businesses are shutting down as every country has had no choice but to enforce a lockdown. Despite all the terrible consequences caused by COVID-19, it has opened up opportunities to buy penny stocks with good fundamentals that should survive the coronavirus crisis.

Below we have put together a list of five penny stocks worth watching over the coming months – make sure to perform your own research before investing and don’t trade with money you can’t afford to lose.

EVRI – Everi Holdings Inc

Everi Holdings Inc. provides technology solutions for the casino gaming industry in the United States, Europe, Canada, the Caribbean, Central America, and Asia. The company operates in two segments, Games and FinTech. This stock has weakened more than 60% since March 2020 and according to the rules of technical analysis, the “bearish” trend of this stock is still very strong. Despite this situation, this stock could make a very big jump in the next several weeks and this stock should be on the watchlist of every trader who follows penny stocks. Total revenues in 2019 were $533.2 million, growing by 13% from 2018. The management of this company believes that Everi Holdings Inc will drive long-term revenue growth and improved profitability in the upcoming years.

OGI – OrganiGram Holdings Inc

OrganiGram Holdings produces and sells cannabis and cannabis-derived products in Canada. This company offers cannabis flowers, cannabis oils, and pre-rolls for adult recreational consumers under several brands. This stock has weakened more than 30% since March 2020 and according to the rules of technical analysis, the “bearish” trend of this stock is still very strong. According to analysts, the legal cannabis industry is expected to advance and it may even hit the $200 billion mark by the end of the decade. It is also important to mention that this stock has lost nearly two-thirds of its value over the prior 12 months. This sharp sell-off had little to do with internal operations or financial performance of OrganiGram during this period. Total revenues in 2019 were $60.4 million, growing by 534% from 2018. If you’re looking to invest in the cannabis industry, OrganiGram is probably a great choice because this stock is cheap for a high-level cannabis company with solid fundamentals.

Fluent Inc. FLNT

Fluent, Inc. provides data-driven digital marketing services primarily in the United States. The company also offers customer acquisition services by operating digital marketing campaigns, through which the company connects its advertiser clients with consumers. This stock has weakened more than 30% since March 2020 and according to the rules of technical analysis, the “bearish” trend of this stock is still very strong. Despite this situation, this stock could make a big jump in the next few weeks. Total revenues in 2019 were $281.7  million, growing by 13% from 2018. It is also important to mention that EBITDA was $11.5M (14% of revenues) while adjusted net income rose to $6.12M from a year-ago $5.99M.

ZIXI – Zix Corporation

Zix Corporation provides email encryption, data loss prevention (DLP), threat protection, archiving, and bring-your-own-device mobile security solutions for the healthcare, financial services, insurance, and government sectors primarily in the United States. The price of this stock has advanced from $3 above $5 in less than three weeks but despite this,  Zix Corporation boasts over 20,000 customers, and a cloud app that is used by 30% of US banks. Yes, it is true that the price of this stock could fall again but according to some predictions, this stock could be above $8 after coronavirus passes.

ORBC – ORBCOMM Inc

ORBCOMM Inc. provides Internet of Things solutions in the United States, South America, Japan, Europe, and internationally. This stock has weakened more than 50% since the beginning of the 2020 year and according to the rules of technical analysis, the “bearish” trend of this stock is still very strong. Total revenues in 2019 were $272 million, falling by 1.49% from 2018. Despite this, the management of this company believes that ORBCOMM will drive long-term revenue growth and improved profitability in the upcoming years. According to analysts, the company expects to see stable services revenue based on the fact that its products and services track refrigerated trucks and containers that carry 60% of the world’s food supply. Amid the worsening COVID-19 pandemic, there’s clearly a high demand for grocery stores, one of few businesses benefitting from the current crisis.

Bitcoin’s whopping 260 percent surge this year is setting the stage for a potentially even bigger upswing. Some analysts are predicting that Bitcoin, the most widely traded cryptocurrency, will trade at $21,000 levels by the end of 2019, meaning that the party may not be over yet. And one easy way to get a piece of the action is to invest in blockchain penny stocks. Here are my top picks:

Grayscale Bitcoin Trust (GBTC:OTCQX)

It reportedly holds about 1.2 percent of Bitcoin in existence. As Bitcoin prices rise, expect Grayscale to follow suit. The trust, whose assets under management were hovering near the $3 billion mark at the end of June, only owns Bitcoin, meaning that any continuation in the current trends seen with Bitcoin will surely benefit Grayscale as well. Oh, and did I mention it was trading at roughly $4 in January?

Riot Blockchain Inc. (RIOT:NASDAQ)

It utilizes about 8,000 specialized computers to run its own Bitcoin mining operation. The upside looks good. But there’s also that SEC investigation regarding public disclosures and ownership that’s still ongoing, and it could put impact the stock price as and when we hear updates on this front. Riot Blockchain is also planning to launch a cryptocurrency exchange, RiotX, later this year, which will give customers the ability to trade in Bitcoin, Ether, Litecoin, etc.

MGT Capital Investments Inc. (MGTI:OTCQB)

The only reason this cryptocurrency mining firm made my list is because I believe it will ride the expected Bitcoin wave in the foreseeable future. The company had briefly stopped mining Bitcoin citing difficult economic conditions but said in May that the recent increase in the price of Bitcoin allowed it to resume its mining operations. There is also plenty of volatility in the share price to capitalize on. Proceed with caution, as its fundamentals are not appealing.

Marathon Patent Group Inc. (MARA:NASDAQ)

The company boasts of being one of the first Nasdaq-listed cryptocurrency mining companies. But that’s about all it can boast about. It currently operates only one mining facility (though it hopes to open more at some point). However, the technicals on its share price look promising. Another company whose stock price volatility is worth tracking.

These blockchain companies tend to mirror Bitcoin’s price moves, or at the very least get caught up with the hype of Bitcoin’s price fluctuations and rallies. While the Bitcoin rally party is already underway, jump in now with blockchain penny stocks and your party could be just about starting.

If analysts are to be believed, then we could see a return to Bitcoin prices charging on to new records, even beyond the all-time highs that we last saw in December 2017. However, it is bound to be a bumpy ride to get there. We’ve already seen the cryptocurrency darling lose some steam in the past week, losing nearly a fourth of its value since touching a 2019 high at the end of June. Further correction is expected in the near-term as traders book profits. And surprise, surprise. The companies listed above rose and fell with Bitcoin, with the price charts of Grayscale Bitcoin Trust and Riot Blockchain fluctuating along similar lines as that of Bitcoin.

To maximize gains, a combination of a conventional buying-and-selling approach, coupled with building periodic short positions, would be an optimal investment strategy for trading in blockchain penny stocks. We can expect to see more volatility ahead as momentum builds up for Bitcoin, and by extension, for these related stocks. At the same time, there is bound to be a healthy mix of upswings and corrections that also occur along the way as technical thresholds are breached. These blockchain penny stocks provide a useful entry point to benefit from the anticipated Bitcoin bull-run forecast for the coming months, especially for those who are unable to mine Bitcoin itself.

Eastman Kodak Co (KODK:NYSE)

If however, the Bitcoin euphoria isn’t for you, you could look at Eastman Kodak Co (KODK:NYSE) as an investment opportunity. The company that was once synonymous with photography, recently launched a blockchain-based document management platform for businesses, which Kodak claims will offer significant cost savings to its users. KodakCoin, a cryptocurrency being developed under Kodak’s brand, in partnership with some other firms, is also due to be launched soon. Of course, this could also be the company’s attempts to reap the benefits of the excitement surrounding all things related to blockchain and cryptocurrency. But if you’re a believer, buying Kodak’s shares now could mean getting in on the ground floor. If you’re skeptical and smell some blood in the water, you could also join the investors shorting Kodak, who as of last month had positions on roughly 14.5 percent of its outstanding shares.