These 2 Pot Stocks Cost Less Than $3. Can They Double Your Money?

After voters in four states (Arizona, Montana, New Jersey, and South Dakota) chose to legalize recreational marijuana last November, the cannabis industry looks even hotter than usual — especially given the optimism that under a Joe Biden administration, we could see marijuana reform at the federal level. It’s an exciting time for the industry, and buying cheap pot stocks before they take off can be a way to significantly grow your portfolio’s value…

Two pot stocks that aren’t expensive buys today are Harvest Health (OTC:HRVSF) and OrganiGram (NASDAQ:OGI). Individually, you can buy a share of both companies for less than the cost of a cup of coffee each. It wasn’t all that long ago that they were trading significantly higher; 2020 was a tough year for both businesses, with their share prices falling by more than 30%. Let’s examine whether these stocks are likely to rebound in 2021, and whether they’re good buys right now.

Harvest Health’s home market could help accelerate its growth

Arizona-based Harvest Health doesn’t need to look far for growth opportunities. With Arizona as one of the states in the process of making legal recreational marijuana available (sales could commence by March), the company is already in a great position to benefit from its 15 locations there. It also has locations in California, Florida, Maryland, and Pennsylvania.

But its biggest presence is in Arizona, and that’s one of the reasons the stock could be a hot buy this year. Sales are likely to surge. Cannabis research company New Frontier Data estimates that the adult-use market for pot in Arizona will be more than $340 million in the first year of legalization, and by year four it’ll hit $1 billion.

After New Jersey, where analysts are expecting sales to reach $1.8 billion by year four, Arizona is the next-hottest market among the states that recently legalized marijuana. Montana may only reach $175 million by year four, while analysts project South Dakota will only be worth about $120 million.

However, there’s reason to be bullish on Harvest Health beyond just the opportunities in Arizona. In its most recent earnings report, released Nov. 10 for the period ending Sept. 30, the company generated good growth, with sales of $61.6 million nearly doubling from the $33.2 million it reported in the prior-year period. Its net loss of $2.1 million was a fraction of the $39.1 million loss incurred a year ago. The company also raised its revenue guidance for fiscal 2020, now expecting to bring in more than $225 million. Previously, Harvest Health was estimating it would generate between $215 million and $220 million in sales.

The company’s stock fell more than 30% last year even as the S&P 500 rose by more than 16%. But that trend has been changing of late. Last week, the cannabis producer’s stock closed at $2.81, and in just the past three months the stock has…

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