Those who’ve traded penny stocks really get to have an early look at emerging industries. I know you may disagree but let me explain my case. First, two of the hottest areas in the stock market today are renewables and electric vehicles. Blue-chip investors have their large-cap leaders like Tesla (NASDAQ: TSLA) and Cummins (NYSE: CMI). But when the hype was just beginning, speculation was going on in our world of penny stocks.
This is when we saw the likes of Plug Power (NASDAQ: PLUG), FuelCell Energy (NASDAQ: FCEL), Gevo Inc. (NASDAQ: GEVO), Blink Charging (NASDAQ: BLNK) Nio (NYSE: NIO), and countless others gain heightened interest. Fast-forward a few months, in some cases about a year, and these former penny stocks are now getting mentioned as “the next XYZ industry contenders”. They’re also trading at much higher valuations.
While our readers are well-informed on these emerging trends, traders still try to ignore penny stocks. But at what cost? Last year we discussed Nio under $2, Plug Power has been talked about since under $3, FuelCell and all the others mentioned were just pennies when the discussions began. All jokes aside, skepticism on stocks under $5 caused traders to ignore these emerging trends until much later, in my opinion. Now, are penny stocks higher risk? Of course, and this is why traders love them. So what’s my point?New Trends For Penny Stock Traders
While the SPACs of the world are now targeting companies in these niches at billion-dollar valuations, there are other industries that have gained the interest of retail traders looking for the next trending industries. Right now, we’re seeing a lot of attention placed on things like cannabis and, believe it or not, mushrooms & psychedelics. The one thing to note is that many of these stocks are still trading for pennies.
Based on the tidal wave of interest and how the groundswell started for other industries, we could be starting to see the groundswell for stocks in these niches. With that in mind, will Vice stocks start to find their way onto your watch list this month?Marijuana & Mushroom Stocks To Watch
- New Wave Holdings (OTC: TRMNF) (CSE: SPOR)
- Aikido Pharma Inc. (NASDAQ: AIKI)
- cbdMD Inc. (NYSE: YCBD)
- Charlotte’s Web Holdings Inc. (OTC: CWBHF) (TSX: CWEB)
- OrganiGram Holdings Inc. (NASDAQ: OGI)
It’s a hot sector and one that’s just beginning to gain interest from the same traders who followed marijuana stocks early. Psychedelic, Magic mushroom, and functional mushroom stocks are gaining a lot of interest. But unlike the cannabis industry, the psychedelic space has seen companies list on major exchanges early.
We’ve also seen a quicker adoption by some of the main listed Nasdaq and NYSE biotechs looking to gain exposure (more on that later). For the most part, however, we’re not talking about penny stocks on Robinhood or Webull. We’re talking about OTC penny stocks and that’s not necessarily a bad thing. Due to the fact that many of these companies are either based in Canada or listed on a main Canadian exchange, then dually listed in the US, it’s no different than we’ve seen with pot stocks.
New Wave Holdings is one of the names that has gained interest during the early phases of this industry. We’ve discussed the company numerous times in the past and watched it climb from under 3 cents to over 20 cents toward the end of 2020. New Wave has focused on fully integrating the full supply chain from mushroom to retail in its model. This week, the company announced its official launch of high quality new functional mushroom wellness collection under its Way of Will Inc. company.
Following the Way of Will acquisition, New Wave gained direct access to Way’s 600+ retail and eCommerce distribution channels. This includes key retail clients like Wholefoods, Target.com, GNC, and Dicks Sporting Goods to name a few. The company’s products are also featured on eCommerce marketplaces like Amazon and Walmart.com. Gross sales are expected to be approximately $3.5 M for the year ended April 2021. Gross margins have historically been between 38% and 40%.Aikido Pharma Inc.
Aikido is one of the companies I hinted at above. The company was focused initially on anti-cancer therapeutics with patented technologies in partnership with leading universities. Its pipeline includes treatments for pancreatic cancer as well as certain leukemias. The company also executed a Master License Agreement with University of Maryland, Baltimore last year. This was for specific antiviral compounds discovered by UMB that seek to inhibit replication of multiple viruses, including Influenza virus, SARS-CoV, SARS-CoV2, among other viruses.
- Best Penny Stocks To Buy Around $1? 4 To Watch Before Friday
- Top Penny Stocks You Might’ve Missed Today & 2 Up 100%+ In 2021
However, this year eyes are on Aikido for a different reason. Last week, the company announced a Patent License Agreement for technology that covers the use of psilocybin for cancer applications. The technology is covered by four patent applications already on file with the United States Patent and Trademark Office. The license covers the use of psilocybin to treat both cancer and cancer side-effects.
How can psilocybin treat patients with cancer? According to the company, research has shown the compound may treat a range of psychiatric and behavioral disorders, including cancer-related depression and anxiety. The use of psilocybin to treat cancer patients is a growing field that Aikido has now gained exposure to. In light of this, shares of AIKI stock have continued climbing during the early weeks of 2021. Can that continue?Marijuana Penny Stocks To Watch: cbdMD Inc.
cbdMD Inc. is one of the “Robinhood marijuana stocks” many have searched for. As I said above, a large majority of pot stocks only trade on foreign exchanges or on the OTC. These are both inaccessible to those using platforms like Webull and Robinhood. cbdMD being listed on the NYSE opens the door for a larger pool of retail traders as a result. The company itself develops CBD compounds for health and wellness retail products.
The big focus for the company going into 2021 has been expanding its retail footprint. Due to the fact that CBD, traditionally, doesn’t have psychoactive properties, it is more widely accessible. Late last year, the company expanded its direct-to-consumer footprint in the U.K.
“Since cbdMD launched, the popularity of CBD has grown exponentially across the globe,” said Martin Sumichrast, co-CEO of cbdMD. Further to this, the company launched its new cbdMD Botanicals beauty and skincare line. The product line includes 15 new products utilizing the company’s broadspectrum CBD formula. With this more mainstream retail focus and global expansion, will YCBD be on your list of marijuana stock to watch this year?Charlotte’s Web Holdings Inc.
One of the OTC-listed pot stocks on this list is Charlotte’s Web. Sorry for any Webull or Robinhood traders reading this but you won’t be able to find this on your platform. Needless to say, CWBHF has climbed nearly 50% since the start of 2021.
The company also focuses on CBD product sales and distribution. This month the company’s subsidiary, was granted U.S. Utility Patents for its hemp genetics by the US Patent and Trademark Office. The patents cover two of the company’s new feminized seed hybrid hemp varieties developed under its breeding program; ‘Kirsche’ (US Patent No. 10,888,060) and ‘Lindorea’ (US Patent No. 10,888,059). These are the world’s first two allowed U.S. Utility Patents reading on feminized hybrid hemp plants according to Charlotte’s Web.
This is at the heart of our mission to advance the science of hemp for the greater benefit of the people who choose these products for their wellness needs.”Deanie Elsner, Charlotte’s Web president and CEO.OrganiGram Holdings
OrganiGram started off a little shaky this year. However, over the last few sessions, OGI shares have bounced much more strongly. It all stemmed from the company’s Q1 fiscal 2021 results. Both EPS and net revenue were down year-over-year. However, the company highlighted several positive milestones that investors have reacted favorably to.
“We are pleased with our double-digit sales growth in the Canadian adult-use recreational market this past quarter as it reflects the success of many of our new product launches, particularly in the dried flower value segment,” said Greg Engel, CEO.
This past quarter also represented the second quarter of the last three which generated positive cash flow from operations. Furthermore, on the company’s earnings call, Engel also explained, “In addition to revenue upside beyond fiscal Q2, we’ve identified a number of opportunities which have the potential to greatly enhance gross margins. We expect to gain economies of scale and efficiencies as we scale up cultivation and packaging, including the decline in charges for unabsorbed fixed overhead costs.”Are Vice Penny Stocks The Next Round Of Small-Caps To Rally?
We’ve seen so many emerging trends in the market. As mentioned above, certain energy and electric vehicle stocks have experienced a tidal wave of interest that has built over the last year. Now it has begun reaching the mainstream. Right now, there’s some above-average activity in certain vice niches including cannabis and psychedelics. In light of this, will vice stocks take a place on your watch list in 2021?