The FDA’s approval of CBD can change the trajectory of these stocks quickly. If regulators get out of the way, these companies could soar. These are the marijuana penny stocks with the best value, fastest growth, and best performance for Q3 2022. The Hemp Mine is a South Carolina hemp CBD business. We grow, extract, and produce premium hemp products including CBD oil, CBD topicals, hemp RSO and fresh hemp flower products. We also wholesale quality crude CBD hemp oil extracted using the supercritical CO2 method and offer white label products.
Top Three CBD Stocks to Watch Closely in 2022
There’s a lot of overlap between CBD stocks and pot stocks. Which, of course, makes perfect sense. The cannabis plant has scores of active chemical compounds in it. One of them is delta-9-tetrahydrocannabinol (THC). This is the compound that gets stoners… stoned.
The other big one is cannabidiol (CBD). This compound has no psychoactive properties. But there are a whole lot of potential health benefits. Now, marijuana producers have no need to weed out the CBD. However, companies focusing on CBD do have to keep out the THC if they want to sell their products over the counter. But it’s not terribly difficult if the CBD is derived from industrial hemp. Which, unlike marijuana, is not a controlled substance.
To complicate matters even further, the Food & Drug Administration (FDA) hasn’t compiled a lot of information on CBD. So, it lingers in a state of near-limbo… due, if nothing else, to its close proximity to THC. It’s not quite legal. But based on how easy it is to find CBD products at the local pharmacy, grocery store and coffee shop; it’s obviously not illegal either. However, its legal status can depend on which state you live in.
Here’s how that works…
In 2018, President Trump signed the Agriculture Improvement Act. This is better known as the 2018 Farm Bill. In that act, there was a section that removed hemp from the Controlled Substances Act. Thanks to that bill, CBD – which can be extracted from hemp – was deemed legal on the federal level. The bill targeted the agricultural aspect, though. Compounds extracted from hemp – à la CBD – aren’t privy to the same complete green light as hemp itself. So CBD operates in a mixed jurisdictional realm.
Warning: More Politics & Science Ahead
The federal government won’t arrest folks for growing hemp anymore. Extracting CBD or possessing it isn’t a federal crime anymore either. Well, if there’s less than 0.3% THC content. But not all states see eye to eye with the feds. Some states still want to see more evidence of the benefits and lack of drawbacks. And in some states, CBD remains blacklisted.
But here’s a big feather in the cap of CBD. The Food & Drug Administration has approved a CBD product to treat Lennox-Gastaut syndrome. It’s also been approved to treat Dravet syndrome. To paraphrase, it’s been proven to help those suffering from certain types of epilepsy.
When Greenwich Biosciences received approval for its epilepsy drug, Epidiolex, it was initially considered a controlled substance. Simply because it was derived from marijuana. But when the company requested it be removed from the controlled substances list, the Drug Enforcement Agency (DEA) agreed. This was a big deal because it was the first time the DEA removed any type of cannabis compound from Schedule 1. And this could eventually prove to be a tipping point.
Regardless of what the FDA says, studies have shown that CBD can help to treat insomnia and anxiety. And it can even act as an antidepressant. It has also helped those dealing with chemotherapy and can treat acne. Nonetheless, not everyone remains sold on the prospect of CBD. And at least part of the problem is bad actors.
The FDA had to warn folks to stop claiming CBD could cure the coronavirus. Also, it probably can’t fix “dryness and frizz” in hair or prevent it from turning gray. That’s the kind of claim the FDA is looking out for. And more importantly, we know at this point that it can do some positive things. And here are three companies proving it…
Three CBD Stocks Worth Investing In
- GW Pharmaceuticals (Nasdaq: GWPH)
- Charlotte’s Web Holdings (OTC: CWBHF)
- CV Sciences (OTC: CVSI)
We’ll start with the big one. GW has essentially built its future and reputation on prescription CBD products. It’s the parent company of Greenwich Biosciences – the maker of Epidiolex. It has also received approval of its Sativex therapy in several countries. It’s a multiple sclerosis treatment that is a cannabis-extracted spray containing CBD. It’s used to treat multiple sclerosis.
Even right now, as some of its therapies remain in limbo, GW stock is pricey. But it’s proven to be insulted from the price swings of the marijuana market. The company also has an impressive pipeline of therapies in the works. And approval of them could send this CBD stock skyrocketing.
Charlotte’s Web Holdings
Charlotte’s Web Holdings can be viewed as the indicator of the CBD industry. If CBD sales are on the rise, this CBD stock will be one of the first to indicate it.
The company recently acquired the topical treatment manufacturer Abacus Health Products with the intention of expanding its product line. The plans have already paid off, with net revenue up 1% in 2021. And increasing product lines should only further help the company’s bottom line. This Colorado-based company has deals with major retailers, including Kroger (NYSE: KR), The Vitamin Shoppe and CVS (NYSE: CVS). Once the FDA clears up the regulatory uncertainty surrounding CBD food products, you can expect this stock to soar.
This company has two distinct segments: consumer products and drug development. The consumer products one is straightforward. It focuses on manufacturing, marketing and selling CBD products. On the other hand, the pharmaceutical division is constantly trying to push the needle and develop novel CBD-based therapeutics. But the company already has the top-selling hemp-derived CBD oil on the market.
CV Sciences’ PlusCBD Oil was the first supplement to receive “generally recognized as safe” (GRAS) status. And the company continues to grow its product line. The company is currently developing synthetic CBD-based medicine and is pursuing FDA approval for drugs. But again, once regulations around CBD are relaxed, this CBD stock is expected to see a major bounce.
The Bottom Line on CBD Stocks
Bills have been introduced to amend the Federal Food, Drug and Cosmetic Act and its regulations of hemp-derived CBD. The best guess as to why they haven’t moved forward is that Congress got distracted by the pandemic. But they should be picked up again. If the FDA finally gets out of the way, these CBD stocks are going to be major beneficiaries.
Unfortunately, for now the prospects of this budding industry are still tied up in politics. And the FDA’s approval (or lack thereof) can change the trajectory of these stocks quickly.
About Matthew Makowski
Matthew Makowski is a senior research analyst and writer at Investment U. He has been studying and writing about the markets for 20 years. Equally comfortable identifying value stocks as he is discounts in the crypto markets, Matthew began mining Bitcoin in 2011 and has since honed his focus on the cryptocurrency markets as a whole. He is a graduate of Rutgers University and lives in Colorado with his dogs Dorito and Pretzel.
Top Marijuana Penny Stocks For Q3 2022
HYFM, OGI, and SNDL are top for value, growth and performance, respectively
Nathan Reiff has been writing expert articles and news about financial topics such as investing and trading, cryptocurrency, ETFs, and alternative investments on Investopedia since 2016.
Chip Stapleton is a Series 7 and Series 66 license holder, CFA Level 1 exam holder, and currently holds a Life, Accident, and Health License in Indiana. He has 8 years experience in finance, from financial planning and wealth management to corporate finance and FP&A.
Medical and recreational cannabis use has been legalized in a growing number of U.S. states and on a national level in Canada, fueling a burgeoning legal cannabis industry in recent years. Cannabis stocks are now a prime focus for investors seeking potentially explosive sales and stock growth. But there are certain considerations associated with marijuana stocks that investors should keep in mind.
To begin with, cannabis stocks face higher-than-normal risk and volatility due to a long list of factors. Many publicly traded cannabis companies are young, unproven enterprises that face a complicated, fast-changing market that includes different laws across many local, state, and regional jurisdictions. Also, cannabis use is still illegal at the U.S. federal level, although 37 states have legalized cannabis in at least one form as of February 3 2022.
The challenges are particularly great for investors when it comes to marijuana penny stocks. Investors should be especially cautious and perform more than their usual due diligence when investing in these companies, which include up-and-coming names such as Cansortium Inc. and Goodness Growth Holdings Inc.
Marijuana stocks, represented by the ETFMG Alternative Harvest ETF (MJ), an exchange-traded fund, have dramatically underperformed the broader market. MJ has provided a total return of -70.9% over the past 12 months, well behind the Russell 1000’s total return of -12.5%. Small-cap stocks more broadly, as represented by the Russell 2000 Index, have also underperformed the broader market, with a 1-year trailing total return of -24.9%. MJ targets a broad assortment of cannabis industry stocks, including penny stocks.
Here are the top three marijuana penny stocks with the best value, the fastest growth, and the best performance. The market performance numbers above and all statistics in the tables below are as of July 1, 2022.
Best Value Marijuana Penny Stocks
These are the marijuana penny stocks with the lowest 12-month trailing price-to-sales (P/S) ratio. For companies in early stages of development or industries suffering from major shocks, this can be substituted as a rough measure of a business’s value. A business with higher sales could eventually produce more profit when it achieves, or returns to, profitability. The P/S ratio shows how much you’re paying for the stock for each dollar of sales generated.
|Best Value Marijuana Penny Stocks|
|Price ($)||Market Capitalization (Market Cap) ($M)||12-Month Trailing P/S Ratio|
|Hydrofarm Holdings Group Inc. (HYFM)||3.48||156.1||0.3|
|HEXO Corp. (HEXO)||0.21||105.9||0.4|
|GrowGeneration Corp. (GRWG)||3.79||230.2||0.6|
- Hydrofarm Holdings Group Inc.: Hydrofarm Holdings Group distributes and manufactures controlled environment agricultural equipment. Its products are used to grow a variety of produce, grains, and herbs, in addition to cannabis. The company’s offerings include lighting, nutrients, and supplies. Hydrofarm announced on June 23 that president Terence Fitch would step down on June 24 to pursue other opportunities. The company did not provide any information about Fitch’s successor in the announcement.
- HEXO Corp.: HEXO is a Canada-based consumer packaged goods cannabis company serving both the adult-use and medical cannabis markets. It also trades in Canada under the ticker HEXO.TO.
- GrowGeneration Corp.: GrowGeneration operates hydroponic garden centers across North America. The company markets and distributes a variety of hydroponic gardening products, including growing media, nutrients, lighting, ventilation equipment, and more. The company’s most recent hydroponic garden center opened in Jackson, Mississippi on June 27. It is the company’s 64th store nationwide and expands GrowGeneration’s market to 14 states.
Fastest-Growing Marijuana Penny Stocks
These are the marijuana penny stocks with the highest YOY sales growth for the most recent quarter. Rising sales can help investors identify companies that are able to grow revenue through organic or new ways, as well as find growing companies that have not yet reached profitability. In addition, earnings per share can be significantly influenced by accounting factors that may not reflect the overall strength of the business. However, sales growth can also be potentially misleading about the strength of a business, because growing sales on money-losing businesses can be harmful if the company has no plan to reach profitability.
|Fastest-Growing Marijuana Penny Stocks|
|Price ($)||Market Cap ($M)||Revenue Growth (%)|
|OrganiGram Holdings Inc. (OGI)||0.94||294.9||118.0|
|HEXO Corp. (HEXO)||0.21||105.9||99.9|
|Cronos Group Inc. (CRON)||2.86||1,074||98.5|
- OrganiGram Holdings Inc.: OrganiGram Holdings is a Canada-based licensed producer of cannabis-related products for both medical and recreational use. The company distributes its products to consumers and through wholesale channels. It also trades in Canada under the ticker OGI.TO. On June 24, Organigram said it reached a proposed settlement related to a class action lawsuit related to medical cannabis that was voluntarily recalled in 2016 and 2017. Per the proposal, Organigram will pay an aggregate of $2,310,000. The Supreme Court of Nova Scotia will hold a hearing to determine whether to approve the proposal on Aug. 31, 2022.
- HEXO Corp.: See company description above.
- Cronos Group Inc.: Cronos Group Inc. is a vertically integrated cannabis company with distribution across five continents. It distributes medical marijuana and cultivates cannabis oil. Cronos Group’s portfolio includes a global wellness platform, adult-use brands, and hemp-derived CBD brands. Cronos announced results for Q1 2022 on May 10. Net losses narrowed dramatically year-over-year (YOY) as consolidated net revenue nearly doubled. Strong performance in Canada and Israel in drove revenue growth.
Marijuana Penny Stocks with the Best Performance
These are the marijuana penny stocks that had the smallest declines in total return over the past 12 months out of the companies we looked at.
|Marijuana Penny Stocks with the Best Performance|
|Price ($)||Market Cap ($M)||12-Month Trailing Total Return (%)|
|Sundial Growers Inc. (SNDL)||0.33||793.6||-63.8|
|Cronos Group Inc. (CRON)||2.86||1,074||-66.7|
|OrganiGram Holdings Inc. (OGI)||0.94||294.9||-66.8|
|ETFMG Alternative Harvest ETF (MJ)||N/A||N/A||-70.9|
- Sundial Growers Inc.: Sundial Growers is a Canada-based cannabis producer. The company produces and distributes cannabis for the adult-use and medical market. It offers dried flower cannabis products in various formats, including pre-rolls, oils, capsules, and more. Sundial reported Q1 2022 earnings on May 16. Net losses significantly narrowed YOY on strong revenue growth. The company said that performance was driven by improvements in Sundial Growers’ cost structure and by increased distribution of branded products.
- Cronos Group Inc.: See company description above.
- OrganiGram Holdings Inc.: See company description above.
The comments, opinions, and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described in our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.
The Hemp Mine
We have the genetics and resources you need for success.
Welcome to the Mine: Premium Hemp is our family’s passion.
We know our hemp–from start to finish, seed to consumer. And that kind of care is what makes our products premium. We start growing our quality, southern CBD hemp genetics on our family land where crops have been farmed for 3 generations. We take pride in never using pesticides, ensuring our hemp grows naturally. Once ready for harvesting, we carefully hang our plants to air dry in optimal conditions keeping the terpenes and cannabinoids well preserved. Then we extract full spectrum hemp oil at our state of the art, supercritical CO2 extraction facility. This extraction method preserves all of the compounds from the whole plant that contribute to the “entourage effect”–terpenes, cannabinoids, flavonoids, and fatty acids. This is what we call FULL SPECTRUM. From there oil is ISO lab tested, formulated into product, and ISO lab tested again before being placed in the marketplace. Coming from a family of farmers, horticulturists, PhD scientists, designers, and creators, we have the experience and passion to create the products you can trust to start living your best life today.
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How to Incorporate Cannabis Into Cooking
With the public perception of cannabis rapidly shifting, we are starting to see adults experimenting in different ways of cannabis.
How to Incorporate Cannabis Into Cooking
With the public perception of cannabis rapidly shifting, we are starting to see adults experimenting in different ways of cannabis.