Investing in penny stocks can often prove to be highly rewarding and if the stock in question belongs to a high growth sector then the chances of a significant return rise manifold. When a sector is still nascent then there is always a chance for smaller companies to grow.
That opens up an opportunity for those who want to invest in penny stocks. One such sector is the marijuana sector. It’s only a few years old and there are still plenty of small companies that have the potential to turn into large ones. Here is a look at two marijuana penny stocks one should track.
Marijuana Penny Stocks to Watch #2 OrganiGram Holdings
The first company to consider in this regard is OrganiGram Holdings Inc. (OGI), which has remained under the radar over the past months despite making some very impressive moves as a business. One of the more important factors in favor of OrganiGram is the fact that it is the only major marijuana grower in Eastern Canada.
That could give it the chance of dominating that market. It is interesting to note that despite the lower population, it has a higher percentage of marijuana consumers when compared to the Canadian national average.
Additionally, the company’s production capabilities are set to be enhanced. OrganiGram expects that it will be able to produce 100,000 kilos a year when at full capacity. The company claims that it’s going to yield 250 grams per square feet. This is significantly higher than the 75 grams per square feet that is being produced by most of its rivals. The legalization of edibles and other derivatives in Canada later on this year is another opportunity that could fuel the next stage of growth for OrganiGram.
Marijuana Penny Stocks to Watch #2 MediPharm Labs
The other promising company in this respect is MediPharm Labs (LABS) (MEDIF), which has a lot of potentials and is involved in a very specialized space. The company is involved in processing and packaging hemp or marijuana extracts for other companies, which are then used for other purposes. MediPharm has become one of the leaders of that particular industry and has locked up some lucrative contracts with some of the leading marijuana producers.
It has inked a contract with plenty of producers, but its most significant contract is with Cronos Group. It has an 18-month deal in which it will supply Cronos with $30 million worth of concentrates and there is an option to double it to $60 million over a two year period as well. It started is extraction services only last November and has already become an industry leader.