While it’s open to debate whether President Donald Trump made America great, the 2016 election did produce one undeniable result: it laid the foundation for cannabis-related businesses, thereby dramatically improving profitability potential for marijuana penny stocks.
During the general election, a record number of states voted for marijuana legalization to varying degrees. Of those voting states, The Washington Post declared that California represents the bellwether. With roughly 12% of Americans calling California home, a major win here would signal greater social acceptance toward cannabis.
Of course, the Golden State voted for full recreational marijuana use, bolstering marijuana stocks. Not only that, this year is particularly important for cannabis-related businesses as, generally speaking, Californians no longer have to carry medical “green cards” to purchase their “herbal solutions.” It must be noted that specific regulations vary from city to city; however, the overall regulatory environment has loosened substantially.
Aside from social acceptance, we have undeniable financial results from the “botany” industry. According to Colorado.gov, cannabis nearly became a billion-dollar industry in Colorado in 2015, and officially crossed the mark in 2016. Last year, green businesses raked in more than $1.5 billion. The implications are obviously positive for marijuana stocks. With so many states reporting budget deficits, the last thing the embattled Trump administration wants to do is to stymie economic progress. After all, his primary calling card was his business acumen.
Marijuana stocks have mostly traded sideways in 2018, with the exception of the past week that saw pot stocks, including Tilray (NASDAQ:TLRY) and Cronos (NASDAQ:CRON) stock, take off on remarks by Constellation Brands (NYSE:STZ) COO Bill Newlands. And, “as long as investors are cannabis crazy,” Pyxus (NYSE:PYX) could double from its current perch.
“We think this is going to be a big business worldwide,” said Newlands. That said, in the near term, don’t expect too much from pot stocks — this is a long-term game. The federal government may just have to reconsider its stance on cannabis, which bodes very well for these four top marijuana penny stocks:
[Editor’s Note: This story was originally published March 5, 2018. It has since been republished and updated to reflect new information in the fast-paced marijuana industry.]
Auxly Cannabis Group (CBWTF)
Many of you have undoubtedly heard of Wheaton Precious Metals Corp (NYSE:WPM), formerly known as Silver Wheaton. WPM specializes in precious metals streaming: an agreement with a miner to purchase metals production at a fixed price. If operated correctly, streaming can be a very profitable venture. The company formerly known as Cannabis Wheaton, Auxly Cannabis Group (OTCMKTS:CBWTF), takes that same business model and applies it to the marijuana industry.
Indeed, Auxly Cannabis is the first streaming company of its kind, creating enormous potential for CBWTF. Moreover, Canada is relatively a weed-friendly nation, having legalized medical marijuana back in 2001 and with national legalization looming on Oct. 17. Don’t be fooled by the 40% decline in CBWTF stock this year; it’s market capitalization is actually higher. That’s because the drop in Auxly was due to share dilution and not the selling off of shares.
Of course, marijuana stocks aren’t exactly the most stable investments. However, if you have some speculative money to play with, CBWTF is worth a shot.
Global Cannabis Application (FUAPF)
When most people hear the term “blockchain,” they immediately think of bitcoin and cryptocurrencies. Certainly, the blockchain catalyzed an entire digital investing market where people from all over the world can trade virtually unencumbered. But this groundbreaking technology can also have very practical uses, which is where Global Cannabis Application Corp. (OTCMKTS:FUAPF) steps in.
While favorable legislation has been a boon to marijuana stocks, many of these gains have been short-lived. In large part, this is because both government bodies and cannabis-related businesses are entering uncharted territory. Regulatory agencies, in particular, are concerned with accounting for the cannabis supply chain: they want to ensure that botanical inventory originates from legal vendors and providers.
Using traditional databases would be an arduous affair. However, with Global Cannabis’ unique blockchain applications, they can offer an exceptionally quick, trustworthy, and immutable solution to concerned government agencies, thus boosting the potential for FUAPF stock.
Additionally, Global Cannabis has more ambitious goals. Its blockchain technology can also be used to amass and analyze medical marijuana data. Eventually, as further data is collected, the company can create a “pain to strain” model, using predictive analytics to help prescribe specific cannabis strains for individual ailments. This outstanding utility is a major reason why investors are enthusiastic about FUAPF stock.
As with almost all marijuana penny stocks, FUAPF is highly speculative. However, it’s one of the smartest plays within this high-risk, high-reward sector.
MCig Inc (MCIG)
When considering marijuana penny stocks, “diversity” is a prime asset. As the industry is still in its nascent stage, having multiple revenue channels protects an organization from unexpected roadblocks. With this in mind, speculators should take a good look at mCig Inc (OTCMKTS:MCIG). Few micro-cap names in the cannabis sector are as diversified as MCIG.
Starting life as a vaporizer company, mCig Inc quickly evolved into a large-scale service and distribution company. It covers almost every area of the marijuana supply chain, from cultivation to packaging to even using the blockchain for operational efficiencies. One standout business is their construction division, which provides turnkey ISO-certified growing rooms. This allows budding botanists to practice their botany and could expand significantly with further legal victories.
Potential MCIG buyers should also key in on their vaporizer business. Vaporizers, or e-cigarettes, have dramatically altered the “adult enthusiast” community. In traditional platforms, a user smokes his or her material through the combustion process. Vaporizers, on the other hand, use the vaporization process to heat materials, hence the name. This results in much-cleaner emissions and it’s more tolerable for non-smoking passersby.
Similar to most speculative marijuana stocks, MCIG is incredibly volatile. On a year-to-date basis, shares have lost 33% (this is cryptocurrency territory that we’re talking about!). Nevertheless, if you can stomach the risk, mCig also has the potential for explosive gains.
Top Marijuana Penny Stocks: Cannabis Science (CBIS)
As I’m sure you’re all aware, the cannabis industry receives a bad rap from society at large. Countless movies, music videos and television shows celebrate the idea of getting completely baked. It’s easy to forget the fundamental reason why marijuana is so popular — its medicinal properties, of course!
Okay, maybe that’s a little bit of a stretch, but nevertheless, cannabis does have promising therapeutic and medicinal potential. Cannabis Science Inc (OTCMKTS:CBIS) is one of the few names among marijuana penny stocks that are completely devoted to medicinal marijuana. According to their profile, CBIS is actively seeking “to treat the world’s most deadly illnesses,” including cancer. In the future, CBIS aims to help patients with increasingly common conditions, such as attention deficit disorder, and post-traumatic stress.
With recent clinical studies demonstrating marijuana’s potential, Cannabis Science also enjoys the possibility of a strong move in the markets. That being said, the company’s financials are very similar to a speculative biotech firm. I don’t necessarily mean this in a good way: CBIS stock will be feast or famine.
So far, long-term shareholders have been going without. CBIS is down more than 66% YTD, which is typical for marijuana stocks in its class. Still, with a small investment, Cannabis Science can pay off big!
As of this writing, Josh Enomoto provided informational materials for Global Cannabis Application Corp., and Stony Hill Corp, which owns VitaCBD, LLC. Subsequently, mCig Inc has a 20% stake in VitaCBD. He does not own any shares of FUAPF nor MCIG. He is long bitcoin.