For the first time all year, marijuana stocks didn’t have investors seeing green — or at least the right kind of green. Pot stocks took investors on a nauseating ride lower in May, with the Horizons Marijuana Life Sciences ETF, the first very first cannabis exchange-traded fund, shedding more than 13% of its value last month, which was almost double the decline of the broad-based S&P 500.
Out of the 56 marijuana stocks I regularly keep tabs on, a mere nine ended May higher, with five of those names advancing by roughly 5% or less. Meanwhile, of the 47 pot stocks that ended May lower, 35 of them ended down by at least 10%. Suffice it to say, the buzz surrounding the green rush came to a crashing halt, at least for one month.
May’s best pot stocks all rose by a double-digit percentage
However, despite this overwhelming negatively, three marijuana stocks shone through with double-digit percentage gains. Here are May’s best marijuana stocks.
Medical Marijuana, Inc.: Up 26%
Following numerous months as one of the industry’s worst-performing pot stocks, cannabis penny stock Medical Marijuana, Inc. (NASDAQOTH:MJNA) ascended the ladder to be the top performer of May. The company’s 26% gain was predominantly sparked by the release of its first-quarter operating results on May 22.
Medical Marijuana, which sells hemp-oil and hemp-derived cannabidiol (CBD) in a handful of countries, expects to be a prime beneficiary of the farm bill being signed into law in the U.S. this past December. With CBD — the nonpsychoactive cannabinoid best known for its perceived medical benefits — gaining accolade rather quickly in the U.S., and a new generation of North American cannabis consumers thirsting for alternative consumption options beyond smoking cannabis, the thesis is that Medical Marijuana’s products should be seeing a healthy uptick in sales.
In the first quarter, the company reported $20.2 million in revenue, a 92% increase from the prior-year period. More important, gross margin increased 9 percentage points from the prior-year quarter to 78%, and the company recorded its best operating results (sans one-time benefits and costs) in history: a $1.5 million profit. Inclusive of one-time benefits from its investment portfolio, Medical Marijuana recorded a $9.5 million quarterly profit.
Now, before you get too excited, keep a couple of things in mind. For instance, Medical Marijuana has just over 3.6 billion shares outstanding, so this quarterly profit only works out to $0.00264 in earnings per share, or about a quarter of one penny.
This is also a company that ended the first quarter with $45.4 million in goodwill and another $33.8 million in investments, most of which are tied to cannabinoid-focused biotechnology company Axim Biotechnologies, which was crushed in May. That’s over…
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