Marijuana Stocks For Your April 2021 Watch List
Marijuana penny stocks could be in a bright spotlight after the latest developments in New York State. The state Senate and Assembly voted to approve recreational marijuana legislation with the passage of Senate Bill S854A. This week, New York State Governor Cuomo took to Twitter, saying the bill could be signed when it hits his desk.
"New York has a storied history of being the progressive capital of the nation, and this important legislation will once again carry on that legacy. I look forward to signing this legislation into law."
While this is far from a move that would justify New York being a "progressive capital," it is a large step forward for the industry. New York's support for legal recreational weed has sparked momentum in the sector this week. Thanks to Cuomo's additional comments, hopes are high that this move triggers a domino effect for other states to go live with recreational initiatives.
Penny Stocks Gain Momentum From Market Rebound
Another potential catalyst to consider is the recent market rebound on Wednesday thanks to upbeat sentiment on a Biden infrastructure package. In an interview with CNBC, Tom Essaye, founder of Sevens Report, explained that "Economic stimulus is no longer 100% virtuous in the eyes of the market, That's because it will bring with it 1) Higher yields, 2) Rising inflation expectations and 3) Erosion of the idea that the Fed will be on hold for the entirety of 2021. Additionally, all this stimulus is being used to offset and usher in tax increases on individuals, corporations, and investments."
Aside from the potential headwinds that spending could have down the road, traders are taking this as a bullish sign in the stock market today. What's more, the first quarter will close its books on Wednesday with eyes on what's ahead for Q2.
Major indexes jumped as a result in response to the spending news. With it, sectors like cannabis saw some compounded momentum heading into mid-week. All things considered, this could be a time to have some marijuana penny stocks on the watch list right now.
- Pharmadrug Inc (OTC: LMLLF)
- Harvest Health & Recreation (OTC: HRVSF)
- Greenlane (NASDAQ: GNLN)
- Vireo Health International Inc. (OTC: VREOF)
Marijuana Penny Stocks To Watch 1. Pharmadrug Inc (OTC: LMLLF)
One of the highlights that cannabis traders will likely pay attention to is who's on Pharmadrug's advisory board. Marijuana industry veteran Terry Booth has brought his M&A experience to Pharmadrug. He was a trailblazer during the early days of public cannabis companies. During his time at Aurora, he managed to build the company's foothold early on. He was at the spearhead of the company's explosive growth spurt that saw Aurora's market value skyrocket to record levels in a market move over more than 3,000%. This could help Pharmadrug's global cannabis business as it looks to import cannabis into the German market. The company has already established key relationships with companies like Bedrocan and others to execute this growth strategy.
But Pharadrug is more than just a cannabis company. The latest initiatives have it expanding into psychedelics as well. In fact, recent headlines suggest that it is one of the few companies breaking new ground in the study of DMT for its potential role in normal, diseased, and altered states of consciousness. Right now, this is being studied in animal models.
Furthermore, PharmaDrug has already filed applications with the U.S. FDA. The company is on the path of receiving Orphan Drug Designation for DMT in multiple indications. The first is for acute ischemic stroke patients presenting for emergency medical assistance within hours of symptom onset.
In pre-clinical research, DMT has shown improvement in ischemic brain injury in rats, both by decreasing brain lesion volume and by improving subsequent motor function recovery. This Orphan Drug Designation would set up the company for gaining certain benefits and incentives, including marketing exclusivity if approved.
2. Harvest Health & Recreation (OTC: HRVSF)
With more of a U.S. focus, Harvest Health could be one of the marijuana stocks with direct exposure to the impact that New York legalization could have. The company just opened its 9th affiliate dispensary in Pennsylvania this month. Company-wide, Harvest has a footprint spanning 5 states, including Florida, Arizona, California, Maryland, in addition to PA.
This rapid expansion has translated into strong revenue growth for the company. In its full-year 2020 results, the numbers reported were solid. Revenue increased 98% to $231.5 million. This included 4th quarter revenues of $69.9 million, which were up from the same period in 2019. It was also a 13% quarterly increase, sequentially. Harvest's net loss also shrunk considerably. In 2019, this came in at $168.8 million. Its 2020 reportshowed a net loss before non-controlling interest of $59.6 million.
In light of this, the company set a revenue target for this year at $380 million with a Q1 target of "at least" $87 million. If it reaches this figure, it could be a massive increase from 2020's first-quarter revenue of $45 million.
"Our fourth-quarter results and the initial success of recreational sales in Arizona demonstrate the efficacy of our strategy to make targeted investments in our core markets of Arizona, Florida, Maryland, and Pennsylvania," said Chief Executive Officer Steve White. "We are focused on continuing to build on this positive momentum as we execute on our plan in 2021."
3. Greenlane (NASDAQ: GNLN)
Shares of Greenlane hovered around the upper end of the penny stock range on Wednesday. This was a welcome sign for traders looking for marijuana penny stocks to buy. GNLN shares had been sliding for weeks along with the rest of the sector. But a mix of industry news out of New York State & headlines of its own has helped in a mid-week rally.
This morning Greenlane reported several big updates. First, its quarterly results came out, which showed some glaring risks in the company's business for Q4. revenue declined 2.59% year-over-year and missed estimates. Earnings per share fell over 130% to a loss of $0.63 compared while also missing estimates of an EPS loss of just 8 cents.
Despite this being the case, a bigger update overshadowed those results. Greenlane announced that it would acquire KushCo to become a wholly-owned subsidiary of the company. This should be a complementary deal as Greenlane and KushCo both sell ancillary cannabis-related products.
According to the company, the deal is expected to generate roughly $15 million to $20 million of annual run-rate cost synergies within 24 months from the transaction's closing. Further to this, over $250 million is projected for pro forma 2020 revenue, according to the company. Needless to say, this deal was seen as something far better to pay attention to than the Q4 earnings results. Based on this, GNLN could be one of the marijuana penny stocks to watch ahead of New York Legalization.
4. Vireo Health International Inc. (OTC: VREOF)
In a similar position as Harvest, Vireo is another U.S. focused marijuana company. The company also recently reported its earnings, which came in strong for Q4. It saw a 38% jump in GAAP revenue to $12.4 million as well as a 303% increase, year-over-year in gross profit at $5.3 million. When you break it down to the full-year in 2020, Vireo revenues grew over 130% compared to 2019.
"Our fourth-quarter results continued to demonstrate good organic revenue growth trends, and we're pleased to see improving consistency in margins as we benefit from recent initiatives to increase scale and achieve greater efficiency in operations," said Chairman and Chief Executive Officer, Kyle Kingsley, M.D. "We spent most of 2020 focused on executing our core market strategy and positioning our portfolio of early-stage medical markets for profitable growth, and we expect that performance in fiscal year 2021 will highlight the strong upside potential we see in our business."
Furthermore, with locations in New York, Vireo could stand to benefit from this latest push by the state.
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