Top Marijuana Penny Stocks for Your May 2024 Watchlist

Essential Marijuana Penny Stocks for May 2024

As the US cannabis industry continues to evolve, marijuana stocks are catching the eyes of many investors. In 2022, the industry’s sales were estimated at around $25 billion. Experts project a climb to over $40 billion by 2026. This growth is fuelled by expanding legalization and increasing acceptance of cannabis use. Recently, headlines highlighted New Mexico’s move to clear past marijuana convictions. Such legal changes boost market optimism. Additionally, Delaware took significant steps by passing laws for recreational marijuana use.

For investors intrigued by these developments, technical analysis is crucial. This approach helps identify price trends and potential entry or exit points. Moreover, applying proper risk management strategies cannot be overstressed. Due to their volatility, marijuana penny stocks present unique risks. Thus, setting stop-loss orders and managing portfolio exposure are vital steps. Ultimately, staying informed and cautious will guide investors through the complexities of this budding sector.

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Cannabis Watchlist: Top Penny Stocks to Consider for May 2024 Investment

1. Acreage Holdings, Inc. (OTC: ACRHF)
2. Cansortium Inc. (OTC: CNTMF)
3. Jushi Holdings Inc. (OTC: JUSHF)

Acreage Holdings, Inc.

Acreage Holdings is a prominent cannabis company with a nationwide footprint. It was established in Maine in 2011. It is engaged in the production, distribution, and processing of cannabis for both recreational and medicinal purposes. Acreage upholds strict standards and is guided by the belief that cannabis may positively impact people’s lives. Notable individuals on its leadership team include former Governor Bill Weld and Speaker John Boehner.

By April 2019, Acreage had become a major cannabis company in the United States. It claimed to have agreements or permissions to operate in nineteen states and controlled The Botanist chain of retail locations. This vast network highlights Acreage’s power and reach throughout several states, underscoring its essential role in the cannabis sector.

Financial Highlights

In the fourth quarter of 2023, Acreage Holdings reported consolidated revenues of $52.8 million, a decline from $57.5 million in the same period the previous year. This reduction was primarily attributed to market price compression, although some revenue growth was noted in New Jersey and Connecticut. The company’s gross profit for the quarter stood at $16.7 million, with a gross margin of 32%, down from 35% in Q4 2022. Adjustments for non-cash inventory led to an adjusted gross margin of 33%. Furthermore, the net loss deepened to $35.7 million from a smaller loss in the comparative period of the previous year. Adjusted EBITDA for the quarter was $4.3 million, representing a decrease from $7.0 million year-over-year.

Operational highlights included expanding the Egg Harbor facility in New Jersey, which doubled productivity per plant in its first-month post-expansion. Acreage also launched the Superflux brand in New Jersey and debuted The Botanist THC-infused gummies in New York, broadening its product offerings. The Botanist brand was also introduced to the adult-use wholesale market in New York. Additionally, operational efficiencies were gained from upgraded facilities and expansions in other states, contributing to a broader geographic footprint. Despite the financial downturn, management expressed confidence in strategic initiatives that positioned the company well for future growth, significantly ahead of its acquisition by Canopy USA.

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Cansortium Inc.

Cansortium Inc., operating under the Fluent TM brand, stands out in the cannabis market. This vertically integrated company, headquartered in Tampa, Florida, engages in retail, manufacturing, distribution, and agriculture. Cansortium has built a strong presence in several US states with its high-quality cannabis products. By the end of 2023, they operated 33 locations, most of them in Florida. They plan to open a second store in Florida before the year ends, increasing this number.

Q4 and Full 2023 Year  Highlights

During the fourth quarter of 2023, the company celebrated a notable increase in revenue, rising 9% to $25.5 million, up from $23.4 million the previous year. CEO Robert Beasley highlighted this achievement as a result of executing growth objectives and making critical investments to lay a strong foundation for future growth. The company also reported a significant improvement in adjusted gross profit, which was $12.6 million or 49.4% of revenue, compared to just $0.7 million or 3.1% of revenue in the same quarter last year. Although there was a decrease in adjusted EBITDA from $7.9 million to $6.9 million, this was mainly due to increased SG&A expenses related to the expansion of store locations.

In operational terms, the company made substantial advancements in Florida by enhancing its dispensary network and improving cultivation practices, resulting in higher-quality, high-THC products. These improvements increased retail prices and a higher average basket size during the quarter. Looking ahead, the company aims to continue enhancing operations in Florida and Pennsylvania and is preparing to leverage its first-mover advantage in Texas with a planned brick-and-mortar delivery center in Houston by early 2025. Additionally, the company faced the need to restate its earnings for the first three quarters of 2023 due to accounting errors, although these corrections did not impact net income.

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Jushi Holdings Inc.

Jushi Holdings Inc. is a multi-state cannabis operator that operates in several sectors, such as processing, cultivating, retail, and production. The company caters to both medicinal and adult users of cannabis, with an emphasis on creating a wide range of cannabis assets. This involves strategic investments, acquisitions, and application prospects in attractive, limited license markets. Jushi’s primary goal is to deliver superior products throughout the cannabis ecosystem, with shareholder value generation being its ultimate goal.

By 2024, Jushi Holdings Inc. plans to operate forty dispensaries across the United States. Particularly well-known states for the business are Pennsylvania, Illinois, and California. Due to their sizable customer populations and progressive cannabis laws, these states are significant marketplaces for the cannabis industry. Jushi’s strategic expansion into these markets shows its dedication to capturing sizeable market shares in these lucrative industries. Using this strategy, Jushi Holdings has solidified its position as a formidable competitor in the dynamic US cannabis market.

Fourth Quarter 2023 Full Year Financial Highlights

In the fourth quarter of 2023, Jushi Holdings Inc. reported a notable financial performance with total revenue reaching $67.8 million. The company’s gross profit for the quarter was $27.2 million, representing a 40.2% gross margin, showcasing a substantial increase of 24.0% year-over-year. Despite these gains, the net loss recorded was $18.0 million, an improvement compared to the substantial loss of $139.9 million in the fourth quarter of 2022. Adjusted EBITDA stood at $11.3 million, reflecting a robust year-over-year increase, underscoring significant operational efficiencies and optimized expense management across the company’s vertical markets.

The company’s strategic operations included launching 175 new unique SKUs, significantly enhancing product diversity and brand offerings. Jushi continued to expand its market presence, notably with the debut of innovative product lines such as vegan troches in Pennsylvania. Additionally, financial maneuvers included the refinancing of debt and asset sales, contributing to improved liquidity. The operational focus remained on driving profitability through enhanced retail and wholesale operations, particularly emphasizing the growth of Jushi-branded product sales, which constituted about 53.4% of total retail revenue in Q4 2023. The company is positioning for continued expansion, particularly looking forward to potential new adult-use markets in strategic states.

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Top Marijuana Penny Stocks Making Waves in May 2024

As we examine the trajectory of the US cannabis industry, it’s clear that growth is on the horizon. With the industry projected to surpass $40 billion by 2026, investors are keenly watching marijuana penny stocks. Recent legalization efforts, like those in New Mexico and Delaware, enhance market dynamics, signaling the potential for significant growth in these regions. Such legislative milestones bolster industry legitimacy and open new markets for business expansion and investment.

Investors considering marijuana penny stocks should employ technical analysis to guide their decisions. This includes studying price patterns and market trends to pinpoint potential entry and exit points. Moreover, implementing strict risk management strategies is crucial, particularly in this volatile sector. Setting stop-loss orders and limiting investment size can protect against unpredictable market swings. As the landscape evolves, staying informed and adaptable will be key to navigating this promising yet challenging market.