Investor Alert: The Best Marijuana Penny Stocks for October 2023
Investors in the cannabis sector are keeping a close eye on the top marijuana penny stocks, ready for possible growth as October begins. The cannabis industry in the US has experienced tremendous growth in recent years, which can be attributed to shifting social norms and legislative changes. According to New Frontier Data, the $20 billion in sales the U.S. cannabis business made in 2021 are expected to more than double to $41 billion by 2025. An increasing number of states are legalizing marijuana for recreational and medical purposes, driving this brisk expansion and fostering prospects for penny stocks in the industry.
However, there are hazards in trading penny stocks in the marijuana industry. Investors should consider using technical indicators and appropriate risk management measures to navigate this volatile market successfully. While risk management is essential for safeguarding your capital from unexpected market movements, technical analysis can assist in identifying suitable entry and exit points for short-term trades. Traders can attempt to grasp opportunities in this developing and promising sector by becoming informed of the most recent changes in the cannabis industry and making well-informed decisions. The top marijuana penny stocks to watch in October will be discussed in this article, along with insights and advice to help you make wise choices in this fast-paced industry.
October’s Top Cannabis Penny Stocks
Ayr Wellness Inc.
In Florida, Ayr Wellness Inc. is a well-known cannabis company. Sixty of the company’s 70 marijuana-related enterprises are located in Florida. The business bought Herbal Remedies Dispensaries, LLC, to grow in Illinois. Adult use of marijuana may enhance the appeal of companies in Ayr, Massachusetts. In Pennsylvania, the business opened its sixth linked dispensary. Ayr intended to start construction on its 86,000-square-foot processing and growing plant in December after receiving regulatory certification from Arizona. By purchasing Levia Cannabis Infused Seltzer in 2022, the corporation made a significant investment in the beverage industry.
Second Quarter 2023 Highlights
- Revenue up 18% Y/Y to $116.7 Million, Excluding Discontinued Operations
- Company Delivers Record Adjusted EBITDA1 of $29.4 Million, up 78% Y/Y, 12% Sequentially, with Adjusted EBITDA Margin of 25%
- GAAP Loss from Operations Improved 81% Y/Y, 79% Sequentially to $(4.5) Million, Excluding Discontinued Operations
The Company remains committed to its financial health and is positioning itself to achieve sustainable long-term growth and profitability across all markets of operation. AYR expects to generate revenue and Adjusted EBITDA growth in the second half of 2023 and into 2024 and to generate positive GAAP cash flow from operations for the calendar year 2023.
AYR’s expectations for future results are based on the assumptions and risks detailed in its Management’s Discussion and Analysis (“MD&A”) for the period ended June 30, 2023, as filed on SEDAR+ and with the U.S. Securities and Exchange Commission (“SEC”).
AYRWF Stock Performance
AYRWF stock closed on September 28th at $2.4725, up 209.06% in the last trading month. The stock has a 52-week price range of $0.5660-$4.41 and is up 106.04% year to date. According to analysts at CNN Business, AYRWF stock has a 12-month average price target of $4.04 per share. In this case, this would represent an upside of 63.56% from the last price of $2.4725.
TerrAscend cultivates and distributes marijuana for medical and recreational purposes in the United States and Canada. The company has facilities in Pennsylvania, New Jersey, and California and is one of the biggest cannabis growers in the US. The main objectives of this company are to produce and sell artisan cannabis items, as well as hemp and cannabis-infused goods. In Maryland, TerrAscend created several products under the Kind Tree label. The Kind Tree brand will add vapes and half-gram pre-rolls to its current product line, made in Maryland from 15 distinct flower varieties.
Second Quarter 2023 Financial Highlights
- Net Revenue was $72.1 million, an increase of 3.9% sequentially and 12.7% year-over-year.
- Gross Profit Margin was 50.2%, compared to 48.8% in Q1 2023 and 37.5% in Q2 2022.
- GAAP Net loss from continuing operations was $12.9 million, compared to $19.2 million in Q1 2023 and net income of $16.9 million in Q2 2022.
- EBITDA from continuing operations was $6.5 million, compared to $6.1 million in Q1 2023 and $38.4 million in Q2 2022.
- Adjusted EBITDA from continuing operations was $12.8 million, compared to $12.2 million in Q1 2023 and $8.8 million in Q2 2022.
- Adjusted EBITDA Margin from continuing operations was 17.8%, compared to 17.6% in Q1 2023 and 13.8% in Q2 2022.
- Net cash provided by (used in) operating activities – continuing operations was $1.8 million compared to $10.5 million in Q1 2023 and ($14.9) million in Q2 2022.
- Cash and Cash Equivalents, including restricted cash, totaled $34.5 million as of June 30, 2023, of which $2.5 million was long-term restricted, compared to $33.5 million as of March 31, 2023.
Outlook for 2023
The Company reiterates its forecast for Net Revenue and Adjusted EBITDA from continuing operations1 of at least $305 million and at least $58 million in 2023, representing year-over-year growth of 23% in Net Revenue and 49% in Adjusted EBITDA from continuing operations, respectively.
TSNDF Stock Performance
TSNDF stock closed at $2.06 on September 28th, up 19.08% in the past month of trading. The stock has a 52-week price range of $1.00-$2.50 and is up 82.30% in the last year. According to analysts at CNN Business, TSNDF stock has a 12-month average price target of $2.17 per share. In this case, this would represent an upside of 5.37% from its last trading price of $2.06.
Cansortium Inc., a Florida-based cannabis company, is dedicated to manufacturing high-quality cannabis. The company currently has locations in Texas, Michigan, and Pennsylvania. A $90 million loan and equity agreement negotiated the year before allowed Cansortium to grow into Florida and Pennsylvania. According to the business, Fruitland Park, Florida, is home to a dispensary. Cansortium is one of Florida’s largest dispensary networks with 30 locations. Full-spectrum extracts, cartridges, lotions, and other high-end consumables are available under Fluent’s brand.
Q2 2023 Financial Highlights (vs. Q2 2022)
- Revenue increased 9% to $24.4 million compared to $22.4 million.
- Florida revenue increased 11% to $20.1 million compared to $18.2 million.
- Adjusted gross profit1 increased 5% to $15.8 million or 64.6% of revenue, compared to $15.0 million or 67.0% of revenue.
- Adjusted EBITDA was $8.6 million compared to $10.2 million, with the decrease primarily driven by increased SG&A related to new store openings that are still ramping.
- Cash flow from operations for the three months ended June 30, 2023, was $4.8 million compared to $5.8 million in the prior year.
- On June 30, 2023, the Company had approximately $8.8 million of cash and cash equivalents and $59.3 million of total debt, with approximately 298 million shares outstanding.
CNTMF Stock Performance
On September 28th, CNTMF stock finished at $0.09, up 38.46% in the past month of trading. The stock is now trading in a 52-week price range of $0.058-$0.23 and is down 19.50 percent year to date.
Penny Stocks in the Cannabis Industry for October
In conclusion, the cannabis sector presents profitable prospects for penny stockholders in October 2023. The potential for big gains in this industry is evident as the U.S. cannabis market could experience significant expansion driven by increased legalization and altering perceptions. Also, to successfully handle the volatility, it’s essential to approach these chances cautiously and use technical indicators and sound risk management techniques. In general, investors can position themselves for success in the dynamic and promising world of cannabis stocks by staying informed, completing in-depth research, and watching the best marijuana penny stocks listed in this article.
Before entering this market, it’s essential to carefully consider your risk tolerance and financial objectives because penny stocks are highly speculative. Additionally, always remain aware, watchful, and ready to adjust to the cannabis market’s shifting environment.
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