Two years into President Donald Trump’s administration, the jury is still out on whether he made good on his “MAGA” promise. However, the 2016 elections undeniably proved that most Americans prefer cannabis legalization to varying degrees. The most recent midterm elections further confirmed this sentiment, which should bolster the case for the top marijuana penny stocks.
While the popular vote didn’t go toward the eventual winner in 2016, the will of the people was heard loud and clear in California. According to The Washington Post, the Golden State is a bellwether due to its massive population. When residents there voted for full recreational weed, it boded well not just for marijuana penny stocks, but for electoral momentum in other states.
The midterms emphatically proved this point. In conservative Utah and Missouri, voters approved medical cannabis. But Michigan stood above the rest, becoming the tenth state to legalize recreational marijuana. Significantly, it’s also the first Midwestern state to approve such an initiative.
Upon the announcement, previously embattled marijuana stocks like Cronos Group (NASDAQ:CRON), Tilray (NASDAQ:TLRY), and Canopy Growth (NYSE:CGC) received a much-needed boost in the markets. It’s easy to see why. Not only does legal marijuana open doors to a previously inaccessible sector, it has proven economic benefits.
The commonly-cited case study is Colorado. In 2015, one year after greenlighting cannabis businesses, the botanical industry nearly hit $1 billion in revenue. In 2016, it breached the threshold, and growth remains strong. Considering that so many states suffer from budget shortfalls, a little green could go a long way.
Under this backdrop, gambling on top marijuana penny stocks is more compelling than jumping on any other speculative venture. While risks abound, these four sector players offer considerable upside possibilities.
Auxly Cannabis Group (CBWTF)
A common difficulty in forecasting future price movements for top marijuana penny stocks is separating hype from reality. While almost every sector player advertises significant upside potential, most undercapitalized firms fail to deliver the goods.
Earlier this year, I had high hopes for Auxly Cannabis (OTCMKTS:CBWTF) due to its unique business structure. Auxly earned bragging rights for becoming the first cannabis streaming company. Energy and mining companies typically deploy the streaming model to gain full access to an industry’s supply chain without incurring unnecessary risk.
In theory, streaming is the way to go for marijuana-related organizations. Even with Canada’s legalization initiative, and U.S. electoral momentum, several legal and administrative hurdles exist. Streaming facilitates exposure to a lucrative industry, but with “stop gaps” should things go awry.
Unfortunately, the markets have not been kind to CBWTF stock. Since its January opener, shares have lost more than half their equity value.
Nevertheless, I’m still hopeful that CBWTF stock can pull it together. Legal marijuana is still in its infancy so we should expect growing pains. Moreover, CBWTF has settled into its long-range support line around 70 cents. It’s a hefty risk, but a worthwhile one with gambling money.
MPX Bioceutical (MPXEF)
A common stereotype about legal-cannabis advocates is that they have ulterior motives for their product evangelism. Although that could be the case, one thing is undeniable: many, if not most top marijuana penny stocks focus on botany’s medicinal aspect.
This is especially true for MPX Bioceutical (OTCMKTS:MPXEF). MPX operates three brands under its corporate umbrella: Salus BioPharma, Health for Life, and its namesake MPX. The former two divisions specialize in medical-grade cannabis, while the latter caters to the green lifestyle. Salus is particularly intriguing as it represents a joint venture with Israeli pharmaceutical Panaxia to develop proprietary, smokeless cannabis products.
Another compelling driver for MPXEF stock is its technical momentum. Like other marijuana stocks, shares are in the red for the year. However, the key difference is that MPXEF has risen steadily higher since early February. Plus, it lacks the extreme volatility seen in other sector-related speculative companies.
That’s not to say you should jump on MPXEF stock without worries. The company isn’t what you would consider fundamentally sound. Still, with relatively-stable market performance and an impressive growth rate, speculators will want to keep close tabs on MPX.
Supreme Cannabis Company (SPRWF)
While most marijuana stocks received a sentiment lift following the midterm elections, Canada has actually forged the path forward. Earlier this year, our northern neighbor became the first G7 nation to approve recreational weed. As a result, the lion’s share of marijuana penny stocks are based in Canada.
A prime example is Supreme Cannabis Company (OTCMKTS:SPRWF). Supreme Cannabis features a unique story, whose 7ACRES brand of medical-grade cannabis started life as a father seeking alternative therapies for his daughter. Eventually, 7ACRES grew to become a gold-standard cannabis facility, offering distinct, high-quality strains.
What makes SPRWF stand out compared to other top marijuana penny stocks is that management is focused on a business-to-business (B2B) strategy. This enables the company to fine-tune its craft, rather than dilute its effectiveness through disparate supply-chain segments.
So far, the markets have acknowledged Supreme Cannabis’ potential, but the ride has been anything but smooth. SPRWF stock doubled in value between mid-August through September-end. However, it crashed back down to earth by mid-October.
In doing so, SPRWF stock managed to hold onto long-term support above $1. It’s a high-risk, high-reward venture, but a very tempting one.
Cannabis Science (CBIS)
Cannabis Science (OTCMKTS:CBIS) is easily one of the most speculative among top marijuana penny stocks. Immediately, you can tell that through either its ridiculously-low share price, or its sub-$100 million market capitalization.
Another giveaway is Cannabis Science’s bold declaration to provide innovative therapies for unmet medical needs, including cancer. As the old saying goes, extraordinary claims require extraordinary evidence.
But this is also where CBIS stock becomes interesting. Management claims that cannabis use dates back thousands of years, making it one of the most tried-and-true medicines. Plus, traditional pharmaceutical companies have become more a marketing machine than a therapy provider. Therefore, the medical-cannabis industry deserves at least some credibility.
That’s the good news for CBIS stock. The not so great news is that shares have struggled badly throughout this year. Like tires spinning in mud, the company failed to generate traction.
Conservative investors should probably stay away from Cannabis Science and marijuana penny stocks in general. But the encouraging note is that CBIS stock has calmed down in recent trades. That’s no guarantee of a turnaround, but any positive movements are likely to be explosive.
As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.