The cannabis industry could reach $300 billion by 2027. And our top penny stock in 2020 is going to be a major player.
This cannabis penny stock has shattered revenue expectations again and again. This year, it's poised to gain 445% on its current price.
Because penny stocks trade under $5, according to the U.S. Securities and Exchange Commission (SEC), a tiny shift in price translates to a much bigger percentage change than stocks that trade for hundreds or thousands per share.
For example, we recommended Inovio Pharmaceuticals Inc. earlier this year. It climbed just $10, which was a 260% gain for the stock at $3.91. We knew the price would erupt on hype over developing a coronavirus vaccine. And that's what happened. The low price of penny stocks makes them extremely sensitive to this hype.
But the best penny stocks today aren't fueled by hype. There are top penny stocks out there that also have great fundamentals. And the marijuana sector is a great place to look for that right now.
We've got a cannabis penny stock that's about to soar 445% higher in the next 12 months...
What's Pumping Cannabis Penny Stocks?
First, it's an election year. Marijuana legalization was already set to become a hot topic in 2020. It was one of the main pillars of last year's Democratic primary debates, and it's expected to take center stage again in the fall.
But several states are also gearing up to put cannabis legalization on their ballots in November. That's going to send pot stocks soaring. These are states that were once very "on the fence" about legalization and now are coming around, like Arizona and Mississippi.
Just Released: Learn money-doubling trading strategies with Tom Gentile's Options 101: The Easiest Options Guide You'll Ever Read. It's free - click here to get it now.
In addition to those states, you also have several that are considering new streams of revenue now that the COVID-19 crisis has cut into their budgets. Oklahoma lawmakers, for example, are looking for ways to make up for the $220 million projected spend to combat the pandemic. The conversation has begun.
This is likely also inspired by projected and realized cannabis revenue in states that have already legalized, such as Colorado and Illinois. Illinois, for example, expects 1,000% revenue growth from now to 2024, from $34 million to $375 million.
You also have a culture ready to embrace marijuana legalization. CBD is becoming a popular recovery supplement for athletes like golfer Bubba Watson and football star Rob Gronkowski. Legendary Quarterback Joe Montana has also started investing in cannabis startups.
To top it all off, marijuana is considered an "essential" item in many legal states during the COVID-19 crisis.
These trends, and more, are going to be pumping cannabis stocks in 2020. And this is the best penny stock to watch before that happens. Here it is for 445% profit potential...
The Top Penny Stock in May 2020
[mmpazkzone name="in-story" network="9794" site="307044" id="137008" type="4"]
CbdMD Inc. (NYSE: YCBD) is the CBD company backed by several professional athletes, and it's getting closer to soaring every day.
Olympian volleyballer Kerri Walsh Jennings and former NFL receiver Steve Smith, Sr., also back the brand.
In its Q1 earnings report for 2020, cbdMD announced 285% year-over-year sales growth. And this has not been abnormal for the brand.
2019 was the company's first full year selling CBD. The company actually beat its revenue target of $20 million, instead taking in $33 million. This was all while the broader cannabis industry bled 70% of its value, judging from the ETFMG Alternative Harvest ETF (NYSEArca: MJ).
So Q1 2020 was business as usual, another period of record growth for the company. And it will continue to expand. Right now, it has products in 5,300 stores. One thousand of them were added just last quarter. Today, they're in 16 international markets total.
It's hard to beat the growth potential of cbdMD. Broader market forces weighed down the stock price last year, and the coronavirus has continued to do that. But the cannabis industry can't be held back for long.
This one is poised to be one of the greatest beneficiaries of the catalysts we mentioned. And you can pick it up for just $0.93. That's 445% potential for today's investor - the average analyst gives it a 12-month target of $5.07.
Action to Take: There's still time to buy cbdMD Inc. (NYSE: YCBD) for mere pennies, at $0.93. As the year goes by, the average analyst gives it a target of $5.07. It's faced some broader market pressure, but with all the marijuana catalysts arising in 2020, it's only a matter of time before this one soars 445%.
The New Rules for Buying Low and Selling High in Today's Market
If you want to buy low and sell high in today's market, there's only one rule you need to follow.
Today, Tom Gentile is sharing everything - including the exact formula that could magnify your profits faster than you could ever believe.
Follow Money Morning on Facebook and Twitter.
About the Author
Mike Stenger, Associate Editor for Money Morning at Money Map Press, graduated from the Perdue School of Business at Salisbury University. He has combined his degree in Economics with an interest in emerging technologies by finding where tech and finance overlap. Today, he studies the cybersecurity sector, AI, streaming, and the Cloud.