Navigating Turbulence: Top Marijuana Penny Stocks to Watch in the 2023 Market Pullback
The cannabis industry and marijuana stocks in the United States have seen remarkable growth and transformation over the past few years, propelled by legalization efforts, increasing public acceptance, and a rapidly expanding market. However, as of 2023, the sector is experiencing a market pullback, making it an opportune moment for short-term investors and day traders to explore promising marijuana penny stocks. In this article, we will delve into the dynamics of the US cannabis industry, its future forecasts, and guide you through proper risk management strategies as you navigate this volatile landscape.
The US Cannabis Industry: A Booming Opportunity
In recent years, the US cannabis industry has gone through a remarkable evolution. The legalization of recreational and medical cannabis in several states has provided a fertile ground for both established and emerging companies to thrive. According to data from New Frontier Data, the legal cannabis market was valued at approximately $18.4 billion in 2022, representing a 40% increase from the previous year. This growth is driven by changing public perception, increased access to cannabis, and the potential for substantial profits.
As we look ahead to the future, the prospects for the US cannabis industry remain optimistic. Analysts predict that by 2025, the legal cannabis market could reach an impressive $41 billion, with continued growth on the horizon as more states consider legalization. This industry expansion is expected to create a wealth of opportunities for investors.
Navigating the Market Pullback: Short-Term Trading Strategies
Market pullbacks can be unsettling, but they also offer opportunities for astute investors to capitalize on undervalued assets. When it comes to short-term trading in the cannabis sector, it’s crucial to employ proper risk management strategies to maximize your potential gains while minimizing losses.
- Diversify Your Portfolio: Don’t put all your eggs in one basket. Diversification is a fundamental risk management strategy. By investing in a variety of marijuana penny stocks, you spread your risk and reduce the impact of a single stock’s poor performance.
- Set Clear Entry and Exit Points: Before you make any trade, establish a well-defined entry point and an exit point. This prevents you from getting caught up in the emotional rollercoaster of the market and helps you stick to your trading plan.
- Stay Informed: Stay up-to-date with industry news, regulatory changes, and company-specific developments. A well-informed trader is better equipped to make sound decisions.
- Manage Your Position Size: Never allocate a significant portion of your capital to a single trade. Limit your position size to a percentage of your overall portfolio, which is usually recommended at 1-2% per trade.
- Use Stop-Loss Orders: Implement stop-loss orders to protect your investments from excessive losses. These orders automatically trigger a sale when a stock reaches a predetermined price, preventing further losses.
- Be Patient and Disciplined: Short-term trading can be fast-paced, but emotional decisions can lead to costly mistakes. Stay patient and disciplined, following your predetermined trading strategy.
Top US Marijuana Penny Stocks For November
In the following sections of this article, we will present a curated list of the top marijuana penny stocks to watch during the 2023 market pullback. These stocks have demonstrated potential for growth and profitability. Remember that investing in penny stocks carries inherent risks, and it’s crucial to conduct your due diligence and consider your risk tolerance before making any investment decisions.
As the cannabis industry and top marijuana stocks in the US continue to evolve, taking advantage of the opportunities presented by the 2023 market pullback can be rewarding. Stay tuned to explore promising penny stocks and make informed investment decisions in this dynamic and ever-changing market.
[Read More] Top US Marijuana Penny Stocks to Watch Before November 2023
Top Marijuana Stocks under $1 for November
- Planet 13 Holdings Inc. (OTC: PLNH)
- Lowell Farms Inc. (OTC: LOWLF)
- StateHouse Holdings Inc. (OTC: STHZF)
Planet 13 Holdings Inc.
The multi-award-winning cannabis company Planet 13 (www.planet13holdings.com) is involved in production, dispensary, and cultivation activities. Its offices are located in Las Vegas, Nevada, and Orange County, California. Additionally, Planet 13 is the owner of a Florida medical marijuana treatment center license as well as a preliminary Illinois Social-Equity Justice Involved dispensary license. Planet 13 wants to become a household name known for its cutting-edge product creation and high-end cannabis retail businesses.
Financial Highlights – Q2 – 2023
Operating Results
All comparisons below are to the quarter ended June 30, 2022, unless otherwise noted
- Revenue was $25.8 million as compared to $28.4 million, a decrease of 9.1%. The decline in revenue was driven by a decline in the average price of cannabis in Nevada, partially offset by an increase in wholesale revenue in Nevada.
- Gross profit was $11.9 million or 46.0% as compared to $13.8 million or 48.7%. The decline in gross profit was driven by a decrease in the average price of cannabis in Nevada and a greater percentage of revenue coming from lower-margin wholesale revenue.
- Total expenses were $15.4 million as compared to $15.6 million, a decrease of 1.6%. The decline in total expenses was driven by lower share-based compensation offset by higher professional fees associated with potential M&A.
- Net loss of $4.3 million as compared to a net loss of $2.0 million. The increase in net loss was driven by lower gross profit dollars as well as high one-time costs associated with potential M&A.
- Adjusted EBITDA of $3.0 million as compared to Adjusted EBITDA of $2.9 million. The higher Adjusted EBITDA margin was primarily due to improvement in the Company’s operating costs.
PLNH Stock Performance
PLNH stock closed on October 25th at $0.64, down 22.89% in the last month of trading. The stock has a 52-week price range of $0.451-$1.51 and is up 4.92% year to date.
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Lowell Farms Inc.
The well-known California cannabis manufacturer Lowell Farms Inc. is expanding its market share quickly. The organization’s main objectives are developing quality cannabis brands, artisan craft cannabis farming, and state-of-the-art production technology. There is a license agreement between Ascend Wellness Holdings and the company. Together, the two businesses will provide medical marijuana retailers in Massachusetts and Illinois with the Lowell Smokes brand. In November, Ascend and Lowell formally decided to ship Lowell Smokes to Michigan. The company claims that Illinois will also get access to the popular Lowell Smokes pre-roll bundles.
Second Quarter Financial Highlights
Revenues:
- Net revenue generated for Q2 2023 decreased 47% to $7.0 million, as compared to $13.2 million for Q2 2022. Net revenue was $7.5 million for Q1 2023, a decrease of 7%.
- CPG revenue decreased 40% compared to Q2 2022 and decreased 5% compared to Q1 2023.
- Bulk revenue from self-grown wholesale products decreased 34% compared to Q2 2022 and decreased 11% compared to Q1 2023. In Q2 2023, there was a 37% decrease in volume and a 44% increase in realized price per pound compared to Q1 2023.
- LFS revenue decreased 95% compared to Q2 2022 and decreased 18% compared to Q1 2023.
- Out of state licensing revenue decreased 14% compared to Q2 2022 and increased 7% compared to Q1 2023.
Gross Margin:
- Gross margin for Q2 2023 was negative 4.8%, representing a gross loss of negative $0.3 million, compared to a gross margin of positive 1.8% for Q1 2023, which represented a gross profit of $0.1 million.
Operating Loss:
- Operating loss was $2.6 million compared to an operating loss of $3.0 million in Q2 2022, a 12% improvement. Operating loss was $2.3 million in Q1 2023.
Net Income:
- Net loss was $0.1 million compared to a net loss of $4.6 million in Q2 2022, and a net loss of $4.0 million for Q1 2023.
Adjusted EBITDA:
- Adjusted EBITDA was negative $1.2 million compared to adjusted EBITDA of negative $1.1 million in Q2 2022 and adjusted EBITDA of negative $1.1 million in Q1 2023. Adjusted EBITDA is a non-GAAP financial measure. See “Use of Non-GAAP Financial Information” below for further information and a detailed reconciliation to Net Loss, the closest comparable GAAP measure.
LOWLF Stock Performance
The shares of LOWLF closed at $0.2830 on October 25th, up 1.07% in the last week of trading. LOWLF went through a 10 to 1 share Consolidation effective August 30, 2023. The stock is now trading in a 52-week price range of $0.02-$0.45.
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StateHouse Holdings Inc.
StateHouse was created by combining Harborside, Loudpack, Urbn Leaf, and Sublime—four progressive legacy businesses with a lengthy history in the California cannabis industry. Among the first six businesses in the United States to be granted a cannabis license was Harborside. Formerly known as Harborside, it operates 13 locations in Oregon and California. StateHouse grew its footprint in California in 2021, and this pattern continues. With its expansion, StateHouse’s Salinas growing facility can now produce year-round and has more than doubled its crop capacity.
Q2 2023 Highlights
- Q2 2023 net revenues were $25.3 million, compared with $34.6 million in Q2 2022.
- Retail revenues were $13.0 million, representing 51.3% of total sales for Q2 2023, compared to $18.5 million or 54.9% of total sales in Q2 2022.
- Gross profit before adjustments for biological assets was $12.3 million in Q2 2023, compared with $14.7 million in Q2 2022.
- Consolidated gross margins improved to 49.9% in Q2 2023, compared to 46.6% for Q2 2022.
- Q2 2023 cultivation yields in the Company’s Salinas facility were up 34% over Q1 2023. Relative to Q2 2022, yields were up 23% per sq/ft due to improved lighting and growing techniques. TOPS, the Company’s high-value customer loyalty program, as of August 29, 2023, had 281,000 loyalty members enrolled.
STHZF Stock Performance
STHZF stock closed at $0.03 on October 25th and has a 52-week price range of $0.008-$0.185. In this case, STHZF stock is down 40% in the last month of trading.
November’s Potentials: Penny Stocks under $1 in the Cannabis Sector
In conclusion, the US cannabis industry is at a pivotal juncture, poised for continued growth despite the temporary market pullback in 2023. The statistics and forecasts paint a promising picture, with substantial opportunities for both short-term and long-term investors. While keeping a keen eye on market dynamics is essential, remember that investing in marijuana penny stocks under $1 during this pullback can be a calculated risk worth taking. With proper risk management strategies, such as diversification, clear entry, and exit points, staying informed, position size management, and stop-loss orders, investors can confidently navigate the volatility and seize potential gains.
As you explore the top marijuana penny stocks in this article for your November watchlist, always approach your investments with a measured and disciplined perspective. The cannabis industry’s growth trajectory and prudent financial decision-making can help you harness the budding opportunities within these budget-friendly stocks. With diligence, patience, and informed decisions, you may discover hidden gems in affordable cannabis investments.
MAPH Enterprises, LLC | (305) 414-0128 | 1501 Venera Ave, Coral Gables, FL 33146 | new@marijuanastocks.com
