Are micro and nano cap cannabis stocks the new black?
The North American cannabis industry is at an interesting point of development where many small-cap stocks have real growth potential and more of them are starting to grow to the point that they can be uplisted from OTC exchanges. With more attention than usual on small-cap stocks, a great deal of unrecognized but legitimate growth potential may lie in sometimes volatile micro-cap and even nano-cap stocks. For those investors interested in getting in on smaller cap stocks before they reach small cap status, here are some possibilities.
Cannabis small caps and smaller caps
Small cap stocks, those with a market capitalization between $300 million and $2 billion, often outperform large-cap stocks. They also may initially “fly under investor radar because of thin analyst coverage” and limited news coverage. However, given the current development of the cannabis industry as well as the growth of indie analysts found on sites like Motley Fool and Seeking Alpha, small-cap cannabis stocks are getting more attention than they might have in earlier days.
The current situation raises the possibility that micro-cap stocks, with a market capitalization between $50 million and $300 million, are the new small caps. Meanwhile, nano cap stocks, with a market capitalization below $50 million, are the new micro caps. If that sounds a bit nutty, the core idea is that in the cannabis industry, at the present moment in history, smaller cap stocks are worth giving the same level of attention one might normally give to small caps.
5 smaller caps worth knowing
That being the case, here are some smaller cap stocks worth considering. They are a combination of U.S. and Canadian companies available in the U.S. on OTCMKTS. They are organized in alphabetical order by name of company and the reason for their inclusion is provided.
BlissCo Cannabis Corp (OTCMKTS: HSTRF) is a Canadian medical marijuana firm licensed by Health Canada as a “producer and distributor of medical dried cannabis.” The company also produces cannabis oil. BlissCo will soon be launching a new e-commerce site for medical cannabis customers as well as introducing the Blissconnect telemedicine app. The app will provide a unique service, “free and convenient consultations with nurse practitioners for medical cannabis.” InvestorPlace considers BlissCo stock to be highly speculative but with great “upside potential” due to the company’s partnership with “medical professionals and alternative therapists.”
Freedom Leaf Inc (OTCMKTS:FRLF) is headquartered in Las Vegas and owns and operates multiple brands. The company’s holdings include full-spectrum CBD product lines for health care practitioners and patients. It is planning to launch additional health products branded as NatureBorn and has entered into an agreement to acquire a CBD beverage company called Hemp2o. The company also announced an agreement with Pura Naturals to create a CBD health and beauty product line. Freedom Leaf was noted for a “massive jump in revenue” in its most recent quarter.
PotNetwork Holdings Inc (OTCMKTS:POTN) owns and operates numerous CBD companies and product brands in the U.S. The company is perhaps best known for its wholly-owned subsidiary Diamond CBD which develops and sells hemp-derived CBD products. These include such celebrity lines as the Tommy Chong branded Chong’s Choice CBD line and the Lawrence Taylor Pain Master line of high-strength CBD products. The company is also growing a media operation called PotNetwork News. PotNetwork Holdings is entering 2019 full bore with numerous initiatives including the introduction of CBD Pops popcorn and the Brain Chill CBD Slushy machine, both via Diamond CBD. In addition, PotNetwork News recently began distributing PotNetwork Magazine, a new print publication focused on the cannabis industry.
Next Green Wave Holdings Inc (CSE:NGW, OTCMKTS:NXGWF) is headquartered in Vancouver but primarily provides cannabis products in California. The company has licenses for growing, manufacturing, extraction and distribution of both medical and recreational marijuana. It describes itself as a “completely vertically integrated operation from seed to consumer.” The company currently owns 15 acres of land in California for its operations with one facility completed and another on the way. Next Green Wave recently acquired SD Cannabis which now has “8 leading cannabis brands with 45 CBD and THC products.” SD Cannabis has a strong cultural presence via sponsorship of music events and a limited edition clothing line.
Whether the above stocks are currently a buy is up to investors. But they are all worth knowing about and following for future development. Keep in mind, given the current rate of mergers and acquisitions, that any of the above may be of interest to larger cannabis companies or companies seeking exposure to cannabis and CBD markets.
