Top Stocks Under $2 Mid-January Edition
The buzz around marijuana penny stocks under $2 is growing louder this week, and it’s not hard to see why. These stocks are a hotspot for investors looking for a mix of thrill and potential gains in the stock market. As always with penny stocks, especially in the cannabis sector, the ride can be as volatile as it is exciting. For those playing in this market, technical analysis becomes their best friend. It’s all about reading those charts and trends to make educated guesses on what’s next. But let’s not forget the golden rule of investing here: risk management. Setting those stop-loss orders and investing only what you won’t lose sleep over is key. And yes, spreading your bets across different stocks might just save you on a rainy day.
Switching gears to the broader picture, the U.S. cannabis industry is on a roll. We’re talking about a market that’s ballooning faster than anyone expected. In 2023, we saw legal cannabis sales hit a whopping $25 billion. And guess what? Analysts are saying this could jump to over $40 billion by 2025. That’s huge! This growth is fueled by more states giving cannabis the green light and a society that’s increasingly cool with it. For investors, this is like watching the pieces of a puzzle fall into place. They’re betting that these developments could send the value of these under-the-radar marijuana penny stocks soaring. Keep your eyes peeled; this could get interesting.
[Read More] Top-Performing Cannabis Penny Stocks of the Week
Top Marijuana Stocks Under $2 Worth Watching
- Ascend Wellness Holdings, Inc. (OTC: AAWH)
- Cresco Labs Inc. (OTC: CRLBF)
Ascend Wellness Holdings, Inc.
Ascend Wellness Holdings, Inc. is a rising name in the cannabis industry. They focus on cultivating, processing, and selling cannabis. Their operations span several key U.S. states. They’re known for high-quality cannabis products and innovative retail experiences. As of now, Ascend operates around 17 retail locations. These are spread across states like Illinois, Michigan, Ohio, Massachusetts, and New Jersey. Illinois and Massachusetts host the majority of their stores. This strategic placement taps into significant market demand in these areas.
Ascend’s approach is comprehensive, covering the entire cannabis supply chain. They manage everything from cultivation to retail sales. This vertical integration gives them greater control over product quality and costs. Their retail outlets, operating under the ‘Ascend’ brand, offer a wide range of cannabis products. These include flowers, edibles, and concentrates. Ascend’s presence in key states positions them well for future expansion. Their focus on quality and customer experience sets them apart in the competitive cannabis market.
Q2 2023 Financial Highlights
In Q3 2023, Ascend Wellness Holdings, Inc. reported impressive financial growth. Gross revenue soared by 26.6% year-over-year and 12.5% quarter-over-quarter, reaching $169.9 million. Net revenue, discounting intercompany wholesale sales, also showed robust growth. It increased by 27.0% year-over-year and 14.9% quarter-over-quarter, totaling $141.3 million. Retail revenue saw a 22.3% rise year-over-year and a 12.7% jump quarter-over-quarter, amounting to $101.3 million. The gross wholesale revenue experienced a significant 33.4% increase year-over-year and 12.2% quarter-over-quarter, reaching $68.7 million. Net wholesale revenue, after deducting intercompany sales, grew by 40.6% year-over-year and 20.7% quarter-over-quarter, totaling $40.0 million. The quarter ended with a net loss of $11.2 million, an improvement from the $16.9 million loss in Q3 2022. Adjusted EBITDA was $29.5 million, marking a 20.9% margin and showing a 38.5% improvement quarter-over-quarter, although there was a 6% increase and a 406 basis point decline year-over-year.
The company’s cash position as of September 30, 2023, was strong, with $63.9 million in cash and equivalents and a net debt of $243.5 million. They generated $24.2 million in cash flows from operations, marking the third consecutive quarter of positive operating cash flow. This included a $3.3 million benefit from the Employee Retention Tax Credit (ERTC), which was later returned as debt repayment. The company’s free cash flow for the quarter, excluding the ERTC receipt, was $12.9 million.
Business highlights included the commencement of adult-use sales at four Maryland dispensaries. Key leadership changes post-quarter included Mark Cassebaum as CFO, Chris Holzer as Chief of Operations, and Denise Pedulla as Chief Legal Officer and Corporate Secretary. Management’s commentary highlighted record-breaking revenue growth, improvements in gross profit and EBITDA, and a focus on scaling in adult-use markets and strategic acquisitions. CEO John Hartmann noted significant retail revenue growth and a promising future for the company.
AAWH Stock Performance
AAWH stock closed on January 12th at $1.43, up 26.55% in the past week of trading. In this case, the stock has a price range of $0.464-$1.69, up 43% year to date.
[Read More] Top Picks for January 2024: Spotlight on Ancillary Cannabis Market Leaders
Cresco Labs Inc.
Cresco Labs Inc. is a prominent player in the U.S. cannabis industry. They are known for cultivating, manufacturing, and selling cannabis and its products. Their business model encompasses a seed-to-sale approach, ensuring quality control at every stage. Cresco Labs operates in key cannabis markets across the United States. They have established a strong retail presence with over 40 dispensaries nationwide. Their largest market presence is in states like Illinois, Pennsylvania, and California. These states are known for their robust cannabis markets.
The company’s strategy focuses on both medical and adult-use cannabis markets. This dual focus allows them to cater to a broad range of consumers. Cresco’s product line includes flower, edibles, concentrates, and vape products. They are also known for their educational initiatives about cannabis use. Their commitment to quality and education has helped them build a strong brand reputation. Cresco Labs’ extensive network and diverse product portfolio position them well for continued growth in the evolving cannabis industry.
Third Quarter 2023 Financial Highlights
In Q3 2023, Cresco Labs Inc. reported a robust revenue of $191 million, driven by significant retail growth and strong performance in core markets. This impressive revenue offset losses from divested assets. The company’s strategic “Year-of-the-Core” initiative, initiated in Q1, led to an impressive adjusted gross margin increase of over 480 basis points. Additionally, Cresco Labs achieved a substantial reduction in adjusted SG&A by $40 million annually, while the adjusted EBITDA margin saw an impressive rise of over 1000 basis points. The company generated $62 million in operating cash flow in the first nine months. Their gross profit was $94 million, 49% of revenue, with the adjusted figure slightly higher at $96 million. Despite a positive operating cash flow of $41 million, one-time non-cash impairment charges resulted in a net loss of $113 million.
Operationally, Cresco Labs maintained top market positions in Illinois, Pennsylvania, and Massachusetts. The company’s branded unit volume grew by 28% year-over-year to 20 million, while retail transactions increased by 17% to 1.4 million. Cresco expanded its retail presence, opening two new Sunnyside stores in Florida, increasing their total store count to 70 by September 30, 2023. CEO Charles Bachtell highlighted the company’s strong performance, crediting their focused core market strategy. He also emphasized the significance of Ohio’s legalization of adult-use cannabis and growing national support for legalization. As of September 30, Cresco’s balance sheet showed $303 million in current assets, including $113 million in cash, and engaged in significant capital market activities, including a $7 million asset sale in Arizona and a $25 million mortgage loan.
CRLBF Stock Performance
CRLBF shares finished on January 12th at $1.93, up 16.97% in the last week of trading. The stock is presently trading in a 52-week price range of $1.00-$2.77, showing a 42.35 percent increase year to date.
[Read More] 3 Marijuana Stocks To Consider Adding To Your Watchlist
Mid-January’s Cannabis Stocks Under $2 to Eye
As we wrap up our review of top marijuana penny stocks to watch this week, it’s clear that the sector is bustling with potential. These stocks, often characterized by their low price and high volatility, present unique opportunities for speculative investors. Overall, the key to navigating this terrain is the use of technical analysis. This involves scrutinizing stock charts for patterns and trends that could hint at future price movements. It’s a tool that, when used effectively, can give investors an edge in timing their trades. However, it’s crucial to remember that technical analysis is not infallible. The cannabis industry, with its evolving legal landscape and market dynamics, can be unpredictable.
Proper risk management is therefore essential when investing in marijuana penny stocks. This means only investing money that you can afford to lose. Diversification is another key strategy. In addition, it helps mitigate risks by spreading investments across different stocks or sectors. Setting stop-loss orders can limit potential losses. Keeping a close eye on market news and regulatory changes is also important. These factors can have a significant impact on stock prices. Remember, while the high-risk nature of penny stocks can lead to substantial gains, it can also lead to considerable losses. Always do your due diligence and approach these investments with caution and informed strategy.
MAPH Enterprises, LLC | (305) 414-0128 | 1501 Venera Ave, Coral Gables, FL 33146 | new@marijuanastocks.com
