Top 3 Cannabis Stocks With Upside in July 2023
In July 2023, the investing world is intrigued by a rare combination of opportunity and momentum in an emerging sector: marijuana penny stocks. These small-cap cannabis companies, frequently traded for pennies on the dollar, have gotten a lot of interest because of their potential for explosive development and rapid price movements. As the cannabis business grows, fueled by expanded legalization initiatives and increasing acceptance of marijuana-based products, intelligent investors are focusing on this niche area, hoping to profit from its upward trajectory.
Before delving into the present environment, it is critical to understand the fundamentals of penny stocks. Penny stocks, as the name implies, are shares of small companies with a low market capitalization that trade at a nominal price per share, mostly less than $5. These securities are frequently traded on over-the-counter (OTC) markets rather than major stock exchanges such as the NYSE or NASDAQ. As a result, they are more volatile and involve more significant risks than established blue-chip equities.
The use of technical indicators, which evaluate previous price and volume data to forecast future stock movements, is one such strategy. Overall, by incorporating these tools into their trading strategy, investors can obtain valuable insights into price trends, identify suitable entry and exit points, and manage risk more efficiently. In July, many top cannabis penny stocks have experienced an upward momentum in recent weeks. These could be some of the top marijuana stocks on watch before August.
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July 2023’s Top Cannabis Stocks on the Rise
- Hydrofarm Holdings Group, Inc. (NASDAQ: HYFM)
- Red White & Bloom Brands Inc. (OTC: RWBYF)
- Charlotte’s Web Holdings, Inc. (OTC: CWBHF)
Hydrofarm Holdings Group, Inc.
In addition to a diverse portfolio of proprietary and innovative branded products, Hydrofarm is a leading independent manufacturer and distributor of branded hydroponics equipment and supplies for controlled environment agriculture, including grow lights, climate control solutions, growing media, and nutrients. Hydrofarm has been assisting producers in making growing easier and more productive for over 40 years. The company’s mission is to provide goods that help growers, farmers, and cultivators increase their growth projects’ quality, efficiency, consistency, and speed.
Latest Financial Results
Net sales fell 42.5% to $62.2 million in the first quarter of 2023, from $111.4 million in the first quarter of 2022, due to a 42.5% drop in volume of products sold, a 1.1% drop in price/mix of products sold, and a 0.6% loss from unfavorable foreign exchange rates. Furthermore, net sales fell 42.5% to $62.2 million in the first quarter of 2023, from $111.4 million in the first quarter of 2022, due to a 42.5% drop in volume of products sold, a 1.1% drop in price/mix of products sold, and a 0.6% loss from unfavorable foreign exchange rates. In addition, total profit fell from $16.6 million the previous year to $11.4 million in the first quarter of 2023.
The decrease was mostly due to a drop in net sales. For the three months ending March 31, 2023, the gross profit margin percentage grew to 18.3%, up from 14.9% in the same period in 2022. In the first quarter of 2023, restructuring charges of $1.2 million reduced the percentage of gross profit margin.
.The company lost $(16.8) million, or $(0.37) per diluted share, in the first quarter of 2023, compared to a loss of $(23.3) million, or $(0.52) per diluted share, in the first quarter of 2022. The firm is reiterating its full-year net sales projection of $290 million to $310 million for 2023, with results now projected to be at the low end of the range. In accordance with earlier expectations, Adjusted EBITDA(1) for the full year will be mildly positive.
HYFM Stock Performance
HYFM stock closed at $1.17 on July 21st, up 20.62% in the last five trading days. At present, HYFM stock has a 52-week price range of $0.6720-$5.01, down 24.52% year to date. According to analysts at CNN Business, HYFM stock has a 12-month median price target of $1.45. In this case, this would represent an increase of 22.88% from its last trading price of $1.17.
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Red White & Bloom Brands Inc.
Red White & Bloom Brands Inc., which operates in numerous states, aspires to be one of the country’s leading cannabis enterprises. In general, the corporation primarily focuses on the legal cannabis and hemp industries, with retail locations in Michigan, Illinois, Massachusetts, Arizona, Florida, and California. RWB has bought Acreage Holdings Inc.’s Florida division. RWB maintains a 114,000-square-foot warehouse in Florida, eight retail locations, and a 400-square-foot office. In August 2021, the company intends to invest in a 45,000-square-foot greenhouse on 4.7 acres of land in Florida. The acquisition could provide short-term expansion opportunities for Sanderson, Florida’s 114,000-square-foot manufacturing facility.
2023-Q1 Financial Highlights
- Revenues were $27.0 million for 2023-Q1.
- Before fair value adjustments, gross profit was $9.4 million for 2023-Q1.
- Operating expenses were $10.9 million for 2023-Q1.
- Adjusted EBITDA was positive 100k for 2023-Q1.
In the first quarter of 2023, the Company successfully opened its fourth medicinal use retail shop in the state of Florida, in the city of Clearwater, Florida. Furthermore, the company announced the launch of PV product solutions in the adult-use Arizona market. Dispensaries throughout the state carry more than twelve (12) flavor profiles of its Premium 510 Vapes and Disposable Vape items.
RWBYF Stock Performance
RWBYF stock closed on July 21st at $0.0452, up 126% in the past month of trading days. The stock has a 52-week price range of $0.001-$0.16 and is down 35.43% year to date.
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Charlotte’s Web Holdings, Inc.
Charlotte’s Web Holdings, Inc., a Certified B Corporation based in Denver, is the global leader in revolutionary hemp extract wellness products through Charlotte’s WebTM, CBD MedicTM, and CBD ClinicTM brands. The company’s whole-plant CBD extracts are available in full-spectrum and broad-spectrum (THC-free) varieties, as well as ReCreateTM by Charlotte’s Web, the world’s only broad-spectrum CBD-certified NSF for Sport® and the official CBD of Major League Baseball. Charlotte’s Web, founded by the seven Stanley Brothers, sparked the CBD market when the brothers rose to global fame following coverage of a young girl’s incredible reaction to their hemp extract. Their activism influenced legislation, public opinion, and studies into the immense health potential of plant-based treatments.
Latest Financial Results
- Consolidated net revenue was $17.0 million for the first quarter ended March 31, 2023, a 12.1% reduction from $19.4 million in the first quarter of 2022. For the periods, the drop was primarily attributable to decreasing oil tincture sales volume and corresponding product mix.
- In the first quarter of 2022, gross profit was $9.9 million, or 58.3% of revenue, compared to $11.8 million, or 60.5% of revenue. Excluding inventory provisions, gross margins in the first quarters of 2022 and 2023 were comparable at around 60%.
- Business-to-business (“B2B”) retail net revenue was $5.7 million, down 7.7% from $6.2 million in Q1 2022.
- According to market share data from renowned third-party analysts such as Nielsen Company (US), LLC, SPINS, LLC, and Brightfield Group, Charlotte’s Web has the number one market share position in the CBD market compared to retail dollars in the United States.
- Charlotte’s Web is the CBD industry’s largest e-commerce company. E-commerce is the major sales channel in the CBD business, accounting for around 37% of total yearly industry sales.
CWBHF Stock Performance
CWBHF stock closed on July 21st at $0.2609, up 44.92% in the past month of trading days. In this case, the stock has a 52-week price range of $0.017-$0.85 and is down 49.67% year to date.
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Cannabis Investments In 2023
July 2023 provided a glimpse of the cannabis market’s potential, and as the industry matures, it will give exciting opportunities for those prepared to accept the risks and rewards of investing in this green revolution. Overall, investors may ride the wave of cannabis stocks and potentially reap significant gains in the months and years ahead with thorough analysis, sensible decision-making, and a dedication to remaining educated.
The three best cannabis stocks that dominated July 2023 attest to the industry’s potential for development. Success in the cannabis sector, on the other hand, necessitates a combination of vigilance, risk management, and a long-term vision. Investors who stay current on the evolving cannabis scene will be better positioned to ride this dynamic market.
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