Marijuana stocks have been on the rise ahead of legalization initiatives on ballots in nine states in November. However, a number of stocks have not participated in the rally.
With nearly every marijuana stock trading on the oft-dangerous over-the-counter markets, it can be difficult to determine which stocks are still a bargain and which stocks have been left behind for good reason.
Alan Brochstein, Marketfy Maven and author of “420 Investor,” joinedPreMarket Prep on Friday morning to discuss two stocks he believes still offer investors strong value.
Brochstein’s first pick is Indoor Harvest Corp INQD 3.19%. According to Brochstein, there are several reasons why Indoor Harvest remains undervalued. First, the company doesn’t have the word “cannabis” in the title, which means it is not on the radar of many marijuana investors. Second, the company has a track record of questionable financing decisions, including the conversion of debt management said it would never convert.
Since that time, Harvest Crop has refinanced its debt and eliminated the “ticking time bomb” concern. Friday, the company has a $7 million market cap and a partnership with CANOPY GROWTH CORP COM NPV TWMJF 6.78%, Canada’s largest marijuana company.
“That’s one I think was late to the game,” Brochstein said of Harvest Corp. “It went the wrong way when a lot of these other stocks were rallying.”
The other stock that Brochstein mentioned is MassRoots Inc MSRT.
Like Harvest Crop, MassRoots also has financing skeletons in the closet.
“They had a convertible note that blew up on them, but at the same time they also did a $5 million capital raise at $0.50/share with $0.90 warrants,” Brochstein explained.
He noted…
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