Investing In Marijuana Stocks in 2021
With marijuana stocks becoming a focus for investors in 2021 there are a few things to know about top cannabis stocks before investing. For one the best cannabis stocks to buy are traditionally known for having substantial market volatility. For this reason, many investors prefer to trade pot stocks for short-term gains in the market. One area that is known for volatility but has also delivered gains in 2021 is marijuana penny stocks to watch.
As a high-risk high reward area of the market penny stocks are any stocks trading under the $5 price point. Specifically, marijuana penny stocks have recently seen a decline in market value and could be positioned for a rebound. One of the biggest catalysts for the cannabis sector recently has been cannabis reform and legalization. With many investors expecting some type of reform to be in place earlier in the year the excitement has fizzled out for pot stocks at the moment.
With that said the cannabis market continues to grow rapidly on the state level in the U.S. Because of this cannabis companies are expanding and could produce substantial growth in the near future. One area of the cannabis industry that could see significant growth in the next five years is the CBD and extraction segments of the market.
The Growing CBD Market
The CBD and extraction segments of the market have been establishing themselves in the cannabis industry for quite some time. According to Grand View Research, the global CBD and CBD oil segment of the market is expected to reach $13.4 billion by 2028. Essentially expanding at a CARG of 25.6% over the forecasted time. At the present time, North America is the dominant force in the CBD market. In 2020 the cannabidiol market was valued at $2.8 billion showing substantial future growth potential.
With the intention of finding marijuana penny stocks in the CBD and extraction segments of the cannabis market, we can look deeper into a few companies. With the cannabis sector looking to show some upward momentum these cannabis penny stocks could have potential gains in the short term and for the long-term investor. For this reason, let’s take a look at 2 possible top marijuana penny stocks to buy before May.
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Marijuana Stocks To Watch:
cbdMD, Inc. produces and distributes various cannabidiol (CBD) products since 2015. The company owns and operates consumer hemp-based CBD brands, such as cbdMD and Paw CBD. Currently, cbdMD brand products include a variety of CDB tinctures, gummies, topicals, capsules, bath bombs, bath salts, and sleep aids. In addition, the company also offers veterinarian-formulated products, including tinctures, chews, and topicals under the Paw CBD brand name. Formerly known as Level Brands, Inc. the company changed its name to cbdMD, Inc. in May 2019. On April 20th cbdMD announced it would launch Spring 2021 products that include the highly anticipated cbdMD drink mixes. As well as cbdMD gummies that include cbdMD sleep gummies and cbdMD calming gummies.
In its latest financials, the company reported first-quarter fiscal 2021 net sales that increased 22% year over year to a record $12.3 million. The company’s e-commerce direct-to-consumer sales are up 41% to a record $9.7 million. Also, cbdMD saw gross profit margins hit all-time highs of 72% for the period. Although the company is showing a loss from operations it has decreased by 71% to $1.8 million compared to $6.1 million in Q1 of 2020.
YCBD stock is up 29.83% year to date with a high of $6.83 in February. Trading at $3.87 in the last hour of April 28th the stock is down 7.33% in the past 30 days. According to analysts at Market Beat YCBD stock has a consensus price target of $4.15 per share. This would be an upside of 7.5% gains from current levels. With this in mind, YCBD stock could be a marijuana penny stock to add to your watchlist for May.
The Valens Company Inc.
The Valens Company Inc. is a leading manufacturer of cannabis derivative products, processing services, and a manufacturer of consumer-packaged goods. Specializing in high-quality products formulated for the medical, and recreational consumer markets the company has an extensive portfolio of product formats. On April 27th Valens entered the U.S. market with the acquisition of Green Roads a leading U.S. CBD company. To elaborate on the acquisition, provide an immediate footprint in the U.S. market with an established manufacturing and distribution platform in the states. A combination of Valens and Green Roads would generate a pro forma total revenue of C$111.6 million in 2020.
On April 14th Valens reported financial results for Q1 of fiscal 2021. The company’s net revenue of $20 million in Q1 2021 is an increase of 24.7% compared to Q4 2020. Additionally, gross revenue increased 21.4% in Q1 to $21.8 million versus $17.9 million in Q4 2020. Currently, the company has manufactured 1.4 million units of finished goods over the 12 months ending February 2021. The Valens company announced today it has submitted its application to be listed on the NASDAQ. This combined with the entry into the U.S. market could give VLNCF stock some future market potential.
VLNCF stock is up 11.54% year to date with a high of $3.00. Closing on April 28th at 2.66 the stock is up 36.45% in the last month. According to analysts at Tip Ranks VLNCF stock has a 12-month average price target of $2.97 per share. This would be an 11. 65% gain from current levels. For this reason, VLNCF stock could be a top Canadian marijuana stock to watch under $4.
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