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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.
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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
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.