Must-Watch Marijuana Penny Stocks in the U.S.
The cannabis market in the United States is expanding significantly as December 2023 goes on, drawing investors’ attention to it. According to recent estimates, the sector’s value has experienced tremendous growth and is predicted to surpass $30 billion by 2025. Public acceptability and growing legalization are driving this upward trajectory. As a result, investors are taking notice of marijuana penny stocks due to their huge profit potential. Despite their volatility, these stocks provide a cheap way to get started in the expanding market.
Investors keen on these opportunities should approach them with caution. Short-term trading of cannabis penny stocks requires adept technical analysis and robust risk management strategies. Understanding market trends and indicators is crucial for informed decision-making. Additionally, investors must set clear boundaries to mitigate potential losses. With these tools, savvy traders can navigate the dynamic landscape of U.S. marijuana penny stocks, capitalizing on growth while managing risks.
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Top Marijuana Penny Stocks in the U.S. for December 2023
- Ayr Wellness Inc. (OTC: AYRWF)
- TerrAscend Corp. (OTC: TSNDF)
- Acreage Holdings, Inc. (OTC: ACRHF)
Ayr Wellness Inc.
Ayr Wellness Inc. is a prominent player in the U.S. cannabis industry. Founded with a vision to create a leading cannabis company, Ayr focuses on high-quality products and consumer experiences. Their operations encompass cultivation, production, and retail. Ayr Wellness prides itself on its vertically integrated approach. This ensures quality control from seed to sale. As of 2023, Ayr operates a significant number of dispensaries across the United States. Their presence is particularly strong in states like Florida, Massachusetts, and Nevada.
In these states, Ayr Wellness has established a robust market presence. Their Florida operations are especially noteworthy, with a multitude of dispensaries spread across the state. In Massachusetts and Nevada, they have successfully capitalized on the growing demand for recreational and medicinal cannabis. Ayr Wellness continues to expand, focusing on strategic locations for new stores. Their expansion strategy is carefully aligned with market trends and regulatory changes. This strategic approach positions Ayr Wellness as a key player in the evolving U.S. cannabis landscape.
Ayr Q3 2023 Highlights
In the third quarter of 2023, the company reported mixed financial results. Revenue slightly decreased by 2.0% from the second quarter to $114.4 million. This was still a 5.2% increase compared to the third quarter of 2022. Gross profit followed a similar pattern, rising by 5.5% year-over-year to $48.1 million, but falling by 15.0% from the previous quarter. Adjusted gross profit and EBITDA showed growth on a year-over-year basis but declined sequentially. The company notably reduced its operating loss significantly, showing an improvement of 92.3% compared to the same period last year and a 66.7% improvement from the second quarter.
Strategic moves marked the quarter for the company. They secured a third dispensary license in Ohio and reported a 21% increase in retail transactions year-over-year. The addition of Michael Warren to the Board and an exclusive deal with Kiva Confections to supply 62+ Florida dispensaries were key highlights. A change in expense allocation methodology impacted the adjusted gross margin. In recent developments, George DeNardo was appointed as Chief Operating Officer. The company expanded its Florida presence, planning to end 2023 with 64 stores. In Ohio, following voter approval for adult-use sales, the company is positioned well with operational cultivation facilities.
Financially, the company ended the quarter with a $72.8 million cash balance. They spent $7 million on capital expenditures. The quarter saw the extension of debt maturity and new financing arrangements, improving the company’s capital structure. Despite setbacks in cultivation affecting fourth-quarter revenue projections, the company anticipates maintaining a 25% adjusted EBITDA margin. They no longer expect growth in the second half of 2023 over the first half. This forecast reflects the temporary challenges and the company’s focus on sustainable, profitable growth.
AYRWF Stock Performance
AYRWF stock closed on December 7th, at $2.68, up 91.43% in the last month of trading. Currently, the stock has a 52-week price range of $0.5660-$2.90 and is up 123.33% year to date. According to analysts at CNN Business AYRWF stock has a 12-month median price target of $3.50. In this case, this represents a 30.60% increase from its last trading price of $2.68.
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TerrAscend Corp.
Mostly serving the medical and recreational cannabis industries, TerrAscend is a well-known cannabis corporation in North America with operations in multiple states. They are dedicated to providing high-quality cannabis products, including edibles, concentrates, and flower, to meet the diverse needs of its customers. TerrAscend’s retail footprint consists of a chain of carefully placed dispensaries across multiple states, with a noteworthy concentration in Pennsylvania, New Jersey, and California.
The company’s commitment to quality and innovation has helped it establish a solid name in the cannabis business. Because of its vertically integrated business strategy, TerrAscend can control every stage of the supply chain, from cultivation to distribution. By employing this strategy, they can ensure the caliber and reliability of their goods and position themselves for expansion in areas where cannabis regulations are still being developed. Attracting consumers for medical and recreational purposes, TerrAscend is a well-known player in the quickly expanding cannabis business. It is well-established in significant states and concentrates on offering an extensive range of cannabis products.
Third Quarter 2023 Financial Highlights
- Net Revenue was $89.2 million, compared to $72.1 million in Q2 2023 and $66.2 million in Q3 2022, representing an increase of 23.7% sequentially and 34.7% year-over-year.
- Gross Profit Margin was 53.6%, compared to 50.2% in Q2 2023 and 47.0% in Q3 2022.
- GAAP Net loss from continuing operations was $8.4 million, compared to $12.9 million in Q2 2023 and $300.6 million in Q3 2022.
- EBITDA from continuing operations was $20.7 million, compared to $6.5 million in Q2 2023 and ($317.9) million in Q3 2022.
- Adjusted EBITDA from continuing operations was $24.2 million, compared to $12.8 million in Q2 2023 and $12.8 million in Q3 2022.
- Adjusted EBITDA Margin from continuing operations was 27.1%, compared to 17.8% in Q2 2023 and 19.3% in Q3 2022.
- Net cash provided by operating activities – continuing operations was $9.4 million compared to $1.8 million in Q2 2023 and $2.3 million in Q3 2022.
- Free cash flow from continuing operations was $7.7 million compared to ($0.2) million in Q2 2023 and ($9.5) million in Q3 2022.
TSNDF Stock Performance
TSNDF stock closed at $1.56 on December 7th, down 3.11% in the past month of trading. Currently, the stock has a 52-week price range of $1.00-$2.341 and is up 38.08% year to date.
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Acreage Holdings, Inc.
Acreage Holdings, Inc. is a noteworthy player in the cannabis industry. They specialize in growing, processing, and selling cannabis and cannabis-related products. The company’s operations are primarily based in the United States. They focus on both medical and recreational cannabis markets.
Acreage Holdings boasts a significant number of retail stores across the country. They have a prominent presence in several states, with the most stores in states like California, Colorado, and Florida. Their expansive network reflects their status as a key cannabis company in the U.S. Their reach in the industry is extensive and growing.
Third Quarter 2023 Financial Highlights
Acreage Holdings, Inc. experienced mixed financial outcomes in the third quarter of 2023. Their consolidated revenue was $56.5 million, marking a slight decrease of 2.8% from the second quarter of 2023. Despite this, their gross margin remained strong at 38%. When excluding non-cash inventory adjustments, the gross margin improved to 41%. However, the company reported a net loss of $7.9 million for this period. On a positive note, their Adjusted EBITDA was $6.6 million, constituting 12% of the consolidated revenue.
Operationally, Acreage Holdings saw significant growth in certain regions. In Connecticut, sales rose by 27% year-to-date as of September 2023 compared to the same period in 2022. Notably, The Botanist Danbury store recorded an impressive 64% increase in sales year-over-year. New Jersey also showed robust growth, with a 34% increase in year-to-date sales for 2023 compared to 2022, and wholesale revenue in the state hitting $1 million in August 2023. The company is expanding its presence in Connecticut with a new dispensary in Vernon, expected to open in April 2024. In New Jersey, Acreage is nearing completion of a major infrastructure project at Egg Harbor Township, which will enhance biomass production capabilities. In Illinois, the company increased its in-house product retail sales significantly from 13% in Q3 2022 to 31% in Q3 2023. Massachusetts saw the establishment of Superflux as the top extracts brand in September 2023 and a growth in market share for both Superflux and The Botanist brands.
ACRHF Stock Performance
ACRHF stock closed at $0.1553 on December 7th, down 35.88% in the last month of trading. The stock has a 52-week price range of $0.11-$0.9080 and is down 69.55% year to date.
U.S. Marijuana Penny Stocks Poised for Growth in December
December 2023 presents a unique opportunity for investors in the U.S. cannabis industry. The listed marijuana penny stocks represent a gateway to this rapidly expanding market. However, potential investors should conduct thorough research. They must understand the inherent volatility of penny stocks in the cannabis sector.
Navigating this market requires a balanced approach combining technical analysis with prudent risk management. By doing so, investors can potentially reap the benefits of this growth industry. Remember, while the rewards can be significant, caution is key. It’s important to stay informed and make calculated decisions in this dynamic investment landscape.
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