Finding the right hemp stock is tougher than ever. This sector has been an investor favorite since the US Farm Bill was passed last December legalizing hemp. With that in mind, we’re looking at Medical Marijuana Inc. (OTC:MJNA) today. For the low price-tag, should this hemp stock be on your radar?
Let’s check it out.
Hemp Stock: Medical Marijuana Inc.
According to a Brightfield Group report, worldwide CBD sales are expected to hit $22 billion by 2022. Comparing from 2018 sales, this represents an annual compound growth rate of 147%. With those figures, hemp-derived CBD is now a business mecca for cannabis farmers, and shares in the sector have soared.
Should a penny stock in CBD with a super-low price tag of $0.06 per share take your fancy? Well, some savvy investors may think this hemp stock is too cheap—a valid argument. But according to the Motley Fool:
“Don’t let the company’s $0.066 share price trick you—it has so many shares outstanding that it’s pretty much a bonafide small-cap with a $238 million market cap.”
Small Hemp Stock
So it’s small. But MNJA is not as small as its penny stock value may lead you to believe. Of course, it is still tiny in comparison to many of its peers. While it was the first US publicly-traded pot stock and was left predominantly to its own devices, Medical Marijuana is now facing mammoth competition from considerably larger companies with much deeper pockets.
Simply put, the passage of the Farm Bill benefitted MNJA operations, but it also opened up the playing field.
Now, the company’s task of growing sales and grabbing market share is far tougher moving forward.
However, as MJNA counts America and Mexico as its two core markets, the potential to thrive is there. Further, if the entire CBD market does reach $22 billion, then even a small-time player in this sector can return more to investors than bigger players may be able to in other sectors. And that is worth consideration.
Hemp Stock: 2018/2019
Medical Marijuana Inc currently stands in a place of limbo. Its third-quarter revenue report (released last November) showed a 116% Y-O-Y increase and profits of $0.6 million. This was good. However, in the first quarter of 2019, the company “wound up losing 18% of its value.” Obviously bad.
Whatever way the MNJA hemp stock goes in 2019 remains difficult to predict. The company may simply need more time for operation expansions to get underway—for example, it recently announced another 100 new retail locations in the US. This should only enhance revenue, no?
Medical Marijuana shares are a potential play for those wanting to get their hands on a hemp stock without spending a fortune. But these shares will have to eke out a niche in a crowded space to survive. There is work to be done, and we are at least two years away from knowing the true value of the CBD market.
If investors are willing to hold, then this hemp stock could be in line for major upswings down the line. But will you always wonder if the sheer size of the company will see it bullied out of a burgeoning market?
Then there is acquisition potential. If this hemp stock is acquired by a major cannabis brand, then investors could have massive revenue potential for the cost of mere pennies at present. That reason alone could make MNJA shares worth the risk.
As with anything investing related, always do your research before acting.
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