Small cap cannabis stocks have begun to move to the front of the pack since January. Before then, industry giants like Canopy Growth and Aphria led the way. Village Farms, with a market cap of just over $1 billion, is a fast-rising example.
What is Market Cap, Anyway?
To calculate a stock’s market cap, you multiply the number of outstanding shares by their price. But you won’t have to do the math, as the information is readily available online and via your online trading platform.
Large cap companies have a market cap of more than $10 billion. Mid caps range from $2 billion to $10 billion. Small caps, $300 million to $2 billion. And micro caps, from $50 million to $300 million. The lower a stock’s market cap, the greater the volatility and risk.
Small Cap vs Large Cap Cannabis Stocks
I’ve always favored small cap cannabis stocks. My reasoning is that a $5 stock is more likely to double to $10 than a $50 stock is to reach $100. A small cap company can become profitable faster. These stocks are more likely to be acquired by a bigger company, and their price usually runs up after the purchase is announced.
And I can buy ten times as many shares of a small cap stock.
Top Small cap Cannabis Companies Today
Cresco Labs, Curaleaf, Harvest Health and Recreation, Trulieve, and Green Thumb Industries are MSO dispensaries battling it out across the US for domination of the countries medical marijuana market. Others, such as MedMen have excellent revenue and are also in the fight, but their stocks have not been making money for investors.
Charlotte’s Web, pure hemp play, is a stellar performer. Among the top small cap companies operating mainly in Canada are Organigram and Village Farms took off like a rocket in less than a month. More than a few others are out there, with new stocks hitting the exchanges almost weekly.
As always, choosing the right entry point for any stock is important. Though the stocks mentioned here have been successful so far, you have to study their charts, news and plans as well as revenue reports before making a move.