9 Marijuana Penny Stocks to Watch in 2017
If you’re looking for the best pot penny stocks, you’ll love this list. Effective November of 2016 these stocks became very volatile as there were many voting to legalize marijuana in certain states including Nevada, California, Arizona, Florida, Maine, Arkansas, North Dakota, Montana, and Massachusetts.
Cannabis Penny Stocks 2017
While many of the companies in the marijuana sector have doubled and tripled in their pricing, there are also many that wound up to be financial train wrecks that were destined to a long term failure. Many people that are new in trading are spending upward of $500 only to find that they have made a terrible investment.
Struggling to survive and crippled in debt, they have little revenue in which to support the operation. From defunct mining companies that chose to add the word “cannabis” to the name in order to cash in on such a craze, many haven’t learned that this isn’t going to change things. The end result is the same, if you put the stocks in the same lot, they’re still going to fail and someone is going to get caught holding the “hot potato”. Once legislation passes, share prices begin to sharply drop.
1. Cara Therapeutics Inc. (NASDAQ: CARA)
In 2004 this company was founded in Shelton Connecticut. At its clinical stage, the biopharmaceutical company has developed many products that target the peripheral nervous system. I.V. CR845, the lead product for Cara, is in Phase III clinical trials. These are designed to treat postoperative pain in adults. This pain is in the acute pain stage. The company is also working in the development of lead molecules that are to selectively modulate the peripheral CB receptors while not targeting the CNS cannabinoid receptors. The most advanced form of the CB compound is the CR701. This is the current stage of preclinical development for the treatment of neuropathic as well as inflammatory pain.
The largest benefit of this is the development of the marijuana based analgesics as they work toward the CB2 receptors. The analysts are overly confident that in spite of the fact that the stocks have dropped, they will make a strong comeback. They began with a target price of $20.33 and the current price is $5.97.
2. Aurora Cannabis In Com NPV (OTCMKTS: ACBFF)
Based in Vancouver, this company is engaged in both cultivations as well as harvesting and the selling medical marijuana in the country of Canada. Using water from Canadian Rocky Mountains it brings the cannabis plants to harvest in a 55,200-foot facility.
Offering high-quality medical cannabis the company is pricing the products at $8 per gram strain and at $5 per gram composite for patients. It boasts free shipping anywhere in Canada and the stock has grown over 90 percent since the start of the year.
3. The canopy of Growth Corp. Com NPV (OTCMKTS: TWMJF)
The Canopy of Growth and Corporation, formerly called Tweed Marijuana Inc., is by and far a large producer of all medical cannabis in the country of Canada that is marketed under the Tweed and the Bedrocan brands. With over half-a-million square feet of greenhouses indoors, this company acquired Bedrocan Cannabis Corporation in 2015 for about $58 million. As of current, the price grew 37.81 percent.
Cannabis Penny Stocks
4. Zynerba Pharmaceuticals Inc (NASDAQ: ZYNE)
This pharmaceutical company was founded in 2007 and focuses on the development and commercializing synthetic cannabinoid therapeutics that are created and developed for transdermal delivery. Two of the candidates are the ZYN002 AND THE ZYN001 forms. ZYN002 is a synthetic cannabidiol (CBD). The permeation enhanced gel for the transdermal delivery has designed the product to be delivered with only once or twice per day dosing.
The ZYN001 form enables the transdermal delivery via a patch. It is used on the arm, the back or the thigh. It’s being studied for treating conditions like fibromyalgia and peripheral neuropathy. Stock pricing has moderately grown this year and it’s risen 6.45 percent as of date. Current’ price is $10.23 and the target price is $30.25.
5. American Cannabis Company Inc (OTCMKTS: AMMJ)
Incorporated in 2001, this company offers solutions for cannabis businesses in both the United States and Canada. There are two main components of the company operations: The advisory and consulting component and the sale of the products and the equipment for the clients in the cannabis industry.
Offering consulting services such as commercial cannabis business planning services and the license applications as well as the cultivation and the building of the consulting. This includes cannabis regulatory compliance and compliance audits as well as the business growth strategies and monitoring services. Additionally, the company offers up products and equipment like Satchel, SoHum, and Living Soil as well as High-Density, Racking System and lastly, The Cultivation Cube.
Marijuana Industry Penny Stocks 2017
6. Cannabis Sativa Inc (OTCMKTS: CBDS)
Based out of Nevada, and in operation for around 12 years, this company just recently went public. Engaged in the development and the promotional work of natural cannabis products, they have both licenses for medical strains of cannabis like NZT and a lozenge that delivers the cannabis as well as a trauma cream.
Regardless of whether you’re buying Canna Securities or stock will be dependent on the prospects of the cannabis business. Canna Securities (NASDAQ: CSAX) has stood out clearly as a stock of marijuana that appears to have no solid prospects. With their focus no directly on the marijuana itself, it’s a sure win.
CSA or Canna Security American was created in the year 2009 in order to meet the growing needs of the evolving medical industry from a legal standpoint of compliance. It offers a security aspect. CSA is instrumental in development of the legal cannabis market in Colorado. They worked on the committee for rulemaking and with the Department of Revenue and they helped formulate the regulations in the state of Colorado.
From the inception, they’ve specialized in the engineering of the custom security and to ensure that they are in full compliance with all of the federal and state regulations as well as the local laws. They offer security solutions to all of the cannabis businesses including armed, unarmed guards as well as armored transport. This also includes alarms, door access systems, and video surveillance. It includes security systems and all state licensing consulting.
With services to over 130 clients in over 500 facilities in 14 states where marijuana states CSA is now achieving a 100 percent approval in licensing and rating as well as their consultants. As regulations change they are able to adjust quickly and effectively as more states implement and regulate the dispensary models. They are able to leverage their expertise in compliance with the various security codes and standards as well as the guidelines to offer clients the most innovative and cost-effective security.
As the national leading security firm, they know what the risks are and what to anticipate. They can tailor their services to ensure that there is maximum loss prevention and everything is in legal compliance. We’ve positioned ourselves in the market as a brand name leader in cannabis security industry.
Nutrafuels (NASDAQ:NTFU). NutraFuels is a United States manufacturer that is located out of Coconut Creek in Florida. With a facility that has been inspected and it’s also been approved by the department of agriculture in Florida, they are FDA registered and they have a 3rd Party cGMP certification. All of the staff are trained and certified in the cGMP requirements.
NutraFuels are all manufactured with the highest quality standards and all of the industry protocols. Their portfolio of companies includes none other than industry CBD Leader Hemp Genix and the Skin Care Manufacturer leaders NF skin. They also include Oral Pro Nutra Spray and Nutra Pro Shot as well as many others. Nutra Fuels has led the industry in the manufacturer of CBD oral sprays and other liquid CBD products.
Marijuana Penny Stocks
Before I can tell you the advantages and disadvantages of trading futures, it's important to understand how it differs from trading stocks.
When you buy a stock, you own part of the company. That is, you share ownership with other investors. That's why we say you buy shares.
Trading futures, on the other hand, requires a contract to buy or sell the commodity in the future. That's why they are called futures.
You can buy or sell those futures contracts as easily as trading stocks. For that matter, you don't even have to lay out the money. However, you do tie up resources in the form of margin.
The problem is that the margin held is nowhere near the actual value of the commodity if you were to purchase it. This is known as the Notional Value. It's calculated as the market value multiplied by the leverage.
Okay, I just threw you two more terms that need definition:
The market value is the price that traders are willing to pay. In general, this is determined by supply and demand. The leverage is the number of units of the future index.
For example, the E-Mini SP& 500 Futures has a leverage of 50. As of this writing it's trading near a market value of 2100. Multiply that by the leverage (50) and you get $105,000. That's the Notional Value of the E-Mini S&P.
As you can see, if you buy one E-Mini S&P contract, you are controlling $105,000 in value. However, unlike stocks, you don't own it. You just have a contract to buy or sell it, depending if you went long or short.
Low Margin Required
What did you actually pay? That's known as the margin that the broker requires you to hold while that trade is active. It varies, but it's around $5,000.
If you bought a stock valued at $105,000 you'd have to pay $105,000. If you used margin, it would still require a payment of half of that. The advantage with futures is that you only tie up a small fraction.
However, the disadvantage is that you need to know what you're doing. If you let a Futures trade get away from you, you are liable for a huge investment. Remember, it's a contract.
That's why traders buy and sell Futures contracts without actually ever buying the commodity.
What's the disadvantage?
When trading futures you have to apply your due diligence in knowing the notional value of the future contract.
If you don't pay attention to the Notional Value, and a trade keeps going against you and you don't close the trade at a small loss, it can get out of hand.
You could end up losing a lot of money in a short time. If you reach the limits of your margin, your broker will close the trade if you don't. That means you've been taken out of the market and you may not have the resources to get back in. Game over!
For this reason, you need to stay small. Don't add to bad trades hoping to lower your cost bases. Rather, just admit that you were wrong and you'll be around to play another day when an opportunity arises.
There are many, and these are the reasons why I love futures over stocks. The rest of this article will briefly list the advantages with trading futures.
Trading Long and Short
Going short with Futures is just as easy as going long. It's just a matter of deciding in which direction you think the market is headed.
No Day Trading Limits
There is no day trading limit with Futures. Stocks can only be traded three times in a day before the IRS considers you a day trader. Futures can be bought and sold any number of times in a day, allowing one to take quick profits and benefit from intraday swings.
No Wash Sales Penalties
The IRS does not penalize you for taking a loss and reentering the same trade within 30 days. When this is done with stocks it is considered a wash sale and you lose the benefit of deducting the loss unless you can carry it forward to a future gain on the same stock.
The reason why it's not penalized for Futures is because Futures pricing are recorded as Marked to Market. I won't get into that here. You can always do a Google search for the term if interested.
Trading 24 hours
Futures trade nearly around the clock, except on weekends and short periods in between for exchange record keeping.
European Style Trading
Stock Options follow the American Style that can be exercised anytime. When trading stock options, one needs to be careful to avoid being exercised if the option is in the money.
Most Futures Options trade European Style, which can't be exercised before expiration. There are some exceptions, especially with weeklies. That's beyond the scope of this article though.
Futures and Options on Futures are treated according to IRS Section 1256. That provides a tax advantage since 60% of all gains are considered Long Term. This is true even if held for just a few seconds.
Cannabis Penny Stocks 2017
So far as I can tell, President Donald Trump has done little to change the circumstances that led him to declare in April 2016 that the U.S. was headed for "a very massive recession." His promise of "big league" tax reform has been described by a lobbyist as "a big nothing burger."
Trump's opinion as a candidate could be of importance to you as an investor. He said last year: "It's a terrible time right now to invest in the stock market."
If Trump was right then, his conclusion would seem to be even more valid now.
Today's cyclically adjusted price-to-earnings ratio, or CAPE, is 29.27, as compared to an already high 25.92 in April of last year when Trump warned that the market was dangerous.
Under sane and sound conditions, the performance of individual stocks is determined by the execution of their business plans - not by political authorities or the unelected mandarins at the Federal Reserve.
As they talk about "draining the swamp" of crony capitalism, politicians should not be manipulating your stock portfolio. But they are. Or at least they are trying.
I have made a hobby of studying past stock market manias looking for clues to help you get a better view of when the current bubble may end, and the likely consequences. As you know, we have not experienced sane and sound conditions for years.
Quite the contrary. As you are aware, we are in the midst of the biggest stock bubble in American history. In all probability, it is the biggest stock bubble in human history.
Some might suppose that the Wall Street market crash of 1929 ended the biggest bubble ever. It was the first stock mania in the era of American hegemony. The Allied victory in World War I, in conjunction with the impairment of British financial capabilities, set the stage for euphoric optimism in the Roaring Twenties.
President Herbert Hoover, who was praised by economist John Maynard Keynes as the only person to emerge from the Versailles Peace Conference with his reputation enhanced, was widely despised for causing the Great Depression. It is now forgotten that the worldwide depression supposedly started by Hoover's inability to head off the stock market collapse of 1929 was already underway as early as 1927.
Commodity-producing economies on the periphery, such as Argentina, Australia and Brazil, along with troubled European economies, notably Germany, had already sunk into depression.
The excess capacity in commodity production, stimulated by the breakdown of trade in World War I, depressed prices for producers.
This commodity depression was reflected in the crash of the London stock market, which mainly capitalized the operations of hard and soft commodity producers throughout the British Empire, and preceded Wall Street's October 1929 plunge by a month.
An Inescapable Bubble
Weakness in commodities is likely to precede the next big crash. Of course, that opens the door to trouble at almost any time. Industrial commodities, particularly iron, copper and oil, have been chronically weak.
Unlike the run-up to the 1929 crash, the current weakness in commodity prices is mainly attributable to the opening of the Chinese economy, in conjunction with the quantitative easing policies of the Fed and central banks in other advanced economies.
Those actions resulted in the lowest interest rates seen in 5,000 years! Add in the demand from China, ramped up by promiscuous credit expansion, and you have a recipe for massive commodity expansion and overcapacity.
China consumed more cement between 2011 and 2013 than what was used in the United States in the entire 20th century. Similarly exaggerated demand for iron, copper and other industrial commodities underpinned huge expansions of capacity and debt levels.
A recent report by Andrew Brown, partner for macro and strategy at ShoreVest Capital Partners, concludes that it is China's turn to deflate its credit excesses. These are arguably the most extreme in history. China created debt equivalent to 139% of its gross domestic product between the first quarter of 2009 and the third quarter of 2014 when Chinese growth peaked. This debt explosion was far in excess of the debt created in other major credit bubbles around the globe.
China's excess credit, as measured by the Bank for International Settlements, is equivalent to about $3.1 trillion. The bubble is unquestionably a feature of current stock markets.
A Crash Is Coming
Once a bubble has been inflated, I know of no example where one was calmly deflated, short of a crash. Of course, that doesn't mean that everyone must be equally affected.
Note that some experts have suggested that the late 1990s dot-com boom was a bigger bubble than today because the price-to-earnings (P/E) ratio for the Nasdaq in 1999 was higher. As true as that statistic is, it paints a false picture. The reason?
Over the last 18 years, the powers that be have tweaked accounting standards to permit companies a greater latitude in declaring fanciful earnings. The result?
If you adjusted the earnings of S&P 500 companies to reflect the generally accepted accounting principles in force in 1999, today's earnings would shrivel by at least half.
That would make the market about two times more expensive than it already is. So a P/E of 29 today, using 1999's accounting standards, would be 58 or higher!
Prudence suggests backing out of unhedged passive long investments in the U.S. market.