Legalization 2.0 is here! The cannabis market is about to receive a massive influx of cannabis derivative products, such as vapes, edibles, and infused drinks, to name just a few. You can expect to see these hit shelves across Canada by mid-December, once the necessary paperwork is processed. As companies brace for the much-needed shakeup that the 2.0 market will bring, we look at some cannabis penny stocks that could be the biggest gainers as legal weed enters its second year.
For investors with a little appetite for risk, penny stocks can be a very attractive option to potentially flip a minimal input for a massive return. The potential of cannabis penny stocks is even greater, especially when companies begin to publish their Q1 2020 earnings, the first results to paint a full picture of the effects of the 2.0 market.
Emerald Health Therapeutics
Emerald Health Therapeutics (TSXV:EMH) (OTCQX:EMHTF) is a BC-based cannabis producer and the joint owner of Pure Sunfarms, a large-scale cannabis production facility in the Fraser Valley that ships all across Canada. The company produces a range of medicinal cannabis products with highly specific THC or CBD content, which is crucial for consumers in the 2.0 market who will be seeking a specific type of high tailored to their needs.
This penny stock is currently valued at $0.74 and hasn't had a great year, a trend reflective in almost all other pot stocks. However, Emerald Health Therapeutics has gained as much as 30% this week, meaning investors are reacting well to this pot stock in the first week of the 2.0 market.
The Supreme Cannabis Company
Supreme Cannabis Company (TSX:FIRE) (OTCQX:SPRWF) is a Toronto-based producer that places a keen emphasis on craftsmanship, describing itself as "obsessed" with producing the best quality cannabis. Supreme has a variety of brands under its portfolio, including the 7Acres high-end cannabis range, and a UK-based CBD investment platform called Supreme Heights. A broad range of well-focused brands is always a benefit for investors in penny stocks, as it provides more avenues for growth and positions the company to better weather industry headwinds.
FIRE stock is another pot stock that's had a rough year, but despite that, The Supreme Cannabis Company has actually performed really well on paper. In its fiscal 2019, Supreme reported sales of $41.8 million CAD compared with $8.9 million CAD from 2018. Next year looks set to get even better for this penny stock, with CEO Navdeep Dhaliwal saying he expects up to $180 million CAD in revenues. You can pick up FIRE shares right now for $0.87, but you might want to move quickly based on those numbers.
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