Hemp stocks have been on my radar ever since 2014.
That’s the year that Hemp Inc. (OTCPK: HEMP) suffered one of the most textbook morning panics I’ve ever seen. My students and I were there to collect. We made $300,000 on the day.*
— Timothy Sykes (@timothysykes) February 6, 2014
This is one of the great things about this sector. It’s been overrun by speculation for the last decade. And speculation brings volume.
Volume, as my Trading Challenge students know, is important for penny stocks. If you don’t have volume, you can’t guarantee an easy exit from a position.
The second thing these stocks bring is the volatility rollercoaster, like we’ve seen with Hemp Inc.
Believe the hype and you’ll end up investing in a worthless stock … Hemp Inc. trades at less than a penny these days.
But if you take the time to learn their patterns, you’ll find some wild plays ahead.
(*We all like big numbers, but this kind of profit isn’t typical. Most traders lose money. All I can do is show you what I’ve done with my years of study and experience. Do your own due diligence and never risk more than you can afford to lose.)
Table of Contents
- 1 What Exactly Are Hemp Stocks?
- 2 What Are Hemp Penny Stocks?
- 3 Top 3 Hemp Stocks to Watch in 2020
- 4 2 Canadian Hemp Stocks Worth Watching
- 5 What Is the Impact of the Coronavirus on the Hemp Market?
- 6 Frequently Asked Questions About Hemp Stocks
- 7 Conclusion: Should You Consider Trading Hemp Stocks In 2021?
What Exactly Are Hemp Stocks?
Hemp stocks are stocks in companies in and around the hemp industry.
Hemp is basically marijuana but without the part that gets you stoned. It has to have 0.3% THC or less. With the passage of the 2018 Farm Bill, it became legal in the U.S.
But even before this big shift, the market for hemp had been growing on pace with its most popular product, CBD.
Hemp is a versatile plant, historically used for everything from rope to birdseed. The Egyptian pyramids were built using hemp rope. A sixth-century French queen was buried in hemp cloth.
These days it’s used for much more. So this hot and cold market could yield some promising stocks. Let’s take a look…
First, there are stocks in hemp-farming operations. There’s a lot of overlap here between hemp stocks and marijuana stocks. Some of the biggest marijuana companies in the world are now growing hemp as the CBD market expands.
Aurora Cannabis Inc (NYSE: ACB) is one of the biggest names in this space.
Hemp CBD Stocks
If the FDA ever gets around to regulating CBD, we could see an explosion among these stocks.
For now, this category is ruled by Canadian hemp stocks and stocks on the OTC market. Cronos Group Inc. (NASDAQ: CRON) is one of the biggest stocks in this category.
Cronos is also a good example of cross-pollination with the tobacco sector. In 2018, it received $1.8 billion in investment capital from tobacco giant Altria Group Inc. (NYSE: MO).
Hemp Product Stocks
Other hemp product stocks are far less complicated than CBD stocks. The market isn’t waiting on the FDA to regulate non-supplement uses of the plant. A growing catalog of hemp products has been completely legal since 2018.
Hemp textile stocks are at the front of this movement. Companies like Levi Strauss & Co. (NYSE: LEVI) have been quick to adopt this sustainable product.
Companies across different sectors want in too. Want to invest in the hot home construction sector? Try hempcrete. That toilet paper panic we had earlier in the pandemic? There’s a hemp product for that.
What Are Hemp Penny Stocks?
Hemp penny stocks comprise the majority of hemp stocks. Remember: a penny stock is any stock that trades under $5 per share.
There are some big players in the sector. But most hemp stocks are fast movers with a LOT of volatility.
Investing advisors talk until they’re blue in the face about unstable market conditions. I learn to trade through any market. The 2020 market has given my students and me some of our best trading days ever.*
With penny stocks, the only thing better than a volatile market is a volatile sector. Hemp has a lot of pretenders in the field. If you can see through the pumps, you can find some worthwhile plays.
Top 3 Hemp Stocks to Watch in 2020
It’s been two years since hemp hit the big time. In that time, we’ve seen some good hemp plays.
But this is a market still largely based on speculation.
… we could have a sector hotter than you can imagine.
Prepare for that day by going through my 30-Day Bootcamp. You’ll learn all the essential patterns and skills for taking advantage of volatility and much, much more. Get on your training now. It’s how you can prepare for trading in any kind of market.
Charlotte’s Web Holdings (OTCQX: CWBHF)
Charlotte’s Web is a CBD stock out of Colorado. It used to be a higher-priced stock, but it’s taken a beating in the last 14 months.
But look at its last month. You’ll see this chart repeated a lot in the next few picks on this list. Some hemp stocks have been hot during the pandemic.
All these stocks go crazy when there’s any legalization news. That’s even true for CBD stocks like this one.
Look at October 8 on the chart, when the stock begins a three-day run. That was the day after the vice-presidential debate. Kamala Harris said the Biden administration would decriminalize pot. Most weed-related stocks climbed over the following days.
Charlotte’s gained about 50%. Then pot giant Aphria Inc (NASDAQ: APHA) reported disappointing earnings. The entire sector suffered a pullback.
Don’t worry … traders will likely be back. And Charlotte’s Web will be a stock to watch.
GreenGro Technologies (OTCPK: GRNH)
While we’re on stocks that have taken a beating, let’s pour one out for GreenGro’s last six years.
During that time, the stock fell from its all-time highs to its current sub-penny status.
But if you look back to 2014, you see a stock with tremendous potential to spike on news. In five days that year, GreenGro went full-on supernova. It jumped from $0.045 to $1.20.
Nothing like that has happened recently. It still posted gains of 50% on those post-debate green days. It’s in a cool sector and trades at a good volume.
Keep this one in your back pocket.
GW Pharmaceuticals (NASDAQ: GWPH)
Here’s a company that doesn’t always bend to industry trends.
GW Pharmaceuticals created Epidiolex, the only FDA-approved CBD-based drug out there. It’s actually a bit of a hedge play for the entire sector.
And it’s not a one-trick pony either. Its drug Sativex was the first cannabis-derived prescription medicine worldwide.
It currently has a drug based on another cannabinoid in Phase 1 testing. This new drug could treat people with autism. Watch this one for big news.
2 Canadian Hemp Stocks Worth Watching
When the U.S. legalized hemp, Canada was two months into its own legalization experiment. Canada charged ahead and fully legalized marijuana and hemp together.
Now we have a situation where the U.S. hemp industry is trying to build itself with one arm tied behind its back. And all the money is flowing north of the border, where Canadian pot companies are taking the lead. Let’s look at two companies that may be watchlist worthy.
Canopy Growth Corp (NYSE: CGC)
You might know Canopy from the marijuana sector. It’s one of the biggest pot stocks on the planet.
This Canadian grower has already entered the American hemp market. It’s partnered with Martha Stewart and others. But Constellation Brands’ (NYSE: STZ) $4 billion stake in the company might be more interesting.
Constellation is the largest beer importer in the U.S. and has expressed interest in CBD drinks. This could make for powerful news in the future.
To be clear, I’m not interested in this stock’s potential. I only care about the potential for a future move.
Right now, the stock shows the right kind of volume and a good amount of volatility.
Aphria Inc (NYSE: APHA)
The only reason for Canadian pot stocks to concentrate on hemp-based CBD is to follow uneven U.S. rules. Aphria has concentrated on marijuana-based CBD instead. It can sell this throughout Canada and most of the 47 U.S. states that have legalized some form of medical marijuana.
Take a peek at the chart of the last year below. Looks pretty interesting right?
Let’s live in the moment. And in this moment, I see a volatile stock, with news that could be charting the course for the entire industry.
Just like in the overall markets, the coronavirus changed things.
The CBD industry was on track to increase its user base significantly. But strategies shifted back to core users in the lockdown.
This wasn’t necessarily a bad thing. The best hemp stocks of 2020 had the same smokin’ rise as marijuana stocks. They made for two of hot sectors in the recovery period.
Frequently Asked Questions About Hemp Stocks
I get it — it’s confusing. Back in my day, people used to call marijuana ‘hemp.’ I’m learning this stuff, same as you.
Can You Invest in Hemp Stocks?
You’ve read this far and still don’t know? It’s no problem for traders … but it gets complicated for companies. A lot of hemp stocks are also pot stocks — U.S. pot stocks are only traded on OTC markets. The same goes for U.S. CBD stocks.
Who Is the Biggest Producer of Hemp?
The U.S. has quickly overtaken China and Canada in hemp production. In 2018, we stood third in hemp production with 78,000 acres. In 2019, we added 200,000 acres to that.
Is Hemp Inc. a Stock Worth Trading?
Hemp Inc. (OTCPK: HEMP) has been counted out many times in the past. But now it’s nearing absolute zero. You want my Hemp Inc. stock predictions for the rest of 2020? I’d be very careful trading this stock.
Is Hemp Publicly Traded?
Hemp is a commodity, although one in its infancy. The market is exploding and prices vary from state to state. And unlike corn and sugar, there are few authoritative sources to determine its cost. This will likely change as hemp production continues to grow.
In the U.S., companies that produce pre-processed hemp can list on major exchanges. The same goes for Canada-based pot companies in the hemp market. U.S.-based CBD stocks are listed on OTC markets. In any case, check that your broker allows trades for the market you’re targeting.
Conclusion: Should You Consider Trading Hemp Stocks In 2021?
I’ll never tell you what to trade.
Instead, I want to help you learn to trust yourself. And you’ll only trust yourself when you’re worthy of that trust. You know what you know … and what you’re only faking.
I can show you setups that might come in handy. And I can show you my weekly watchlists to give you an idea of my process.
But what I really want for you is to be a self-sufficient trader. That means you know how to think for yourself in the markets. I want you to work your butt off and join the ranks of my top students. People like my latest millionaire student, Roland Wolf.*
He started with $4,000 … and he did the work. He joined my Trading Challenge. That’s where he got access to my video lessons, webinars, DVDs, the best chat room, and so much more. Now, Roland’s up over $1 million this year.* And he’s just one of my top students.
In the end, it’s all you. So apply now. I don’t accept everyone, only those who prove they’re dedicated to the process.
Leave a comment … Do YOU think you should trade hemp stocks in 2021? Let me know. I love hearing from you!