There’s no denying that the cannabis industry has been a booming one, especially after the beginning of its legalization for recreational use almost a decade ago. When the Democratic party secured a majority in the Senate this year, many investors invested in the marijuana industry, believing it would be legalized this year. Now, Pharmagreen Biotech Inc. (OTC:PHBI) is making big moves to expand their presence in the cannabis market and could be one of the penny stocks to buy now for 2021.

As a company focused on the CBD hemp industry for the production and supply of starter plantlets, PHBI will likely benefit from Senator Chuck Schumer’s ambitious proposal – The Cannabis Administration and Opportunity Act. The proposed legislation has attracted an increasing amount of attention from bullish investors in the cannabis sector and PHBI is worth watching after its 61% increase over the last seven days.

Catalysts

PHBI let shareholders know that it is in the process of finalizing its acquisition of a company with a Provisional Cannabis Cultivation License and an existing distribution and sales network. Due to a non-disclosure agreement, the acquisition target has yet to be revealed, but PHBI has plans to build a state of the art, 12,000 square foot flowering greenhouse at this location to maximize production. An added bonus to this agreement is PHBI’s ability to acquire an additional 120 acres of land over the next seven and a half years – leaving the door open for further expansion.

But for now, this greenhouse is expected to be completed within 5 months of beginning construction. It would offer a tremendous upside for PHBI as its acquisition target already has current revenues of $500 thousand annually and is predicted to hit $10 million annually due to the increased number of crop rotations each year. PHBI will likely obtain a nursery license as well for the “production and sale of tissue cultured starter plantlets”.

PHBI’s CEO shared his excitement for the acquisition saying, “We have selected a region that is the largest state economy in U.S. and ranks fifth in the world and Northern California is considered to be God’s country for cannabis cultivation”. He’s not wrong to think so, after all California is widely regarded as the largest legal cannabis market in the world. With this in mind, California appears to be an ideal location for PHBI’s expansion.

Supplementing its acquisition plans, PHBI has commissioned a commercial campaign which will begin at the end of September. This 12 month campaign will feature 1,200 commercials aired on major channels such as Fox News, Fox Business Network, CNBC, Newsmax TV, MSNBC and ESPN. These commercials will advertise PHBI’s hemp agricultural products and the hemp farming/agricultural sectors the company is involved in.

PHBI has recently provided an update on these plans saying, the due diligence process for its acquisition is nearing completion. The company is also proceeding with its application to uplist to the OTCQB which it expects to be a “swift process” given its detailed reporting history.

In light of the company’s background in tissue culture science, PHBI has an edge in providing high quality, disease free, genetic clones of high CBD plantlets. The company is also able to apply its skills to the extraction of CBD oil and other cannabis products which may enhance the production potential of its Northern California acquisition.

Media Sentiment

Credit where credit is due – baller baller @stockballa has been on top of PHBI for a while, providing due diligence on this cannabis biotech stock.

But @KingShard1 had the foresight to catch PHBI as far back as January when he thought PHBI could be one of the penny stocks to buy 2021.

Technical Analysis

penny stocks to buy now 2021 PHBI stock chart

PHBI has been witnessing an upward trend since mid-September, currently trading at $0.034 after breaking through its previous resistance points. Looking back to May, a support line at .0323 appears with a secondary support near .03. PHBI tested its resistance at .0362 on the 20th and may retry this resistance point in the future. After its 12% increase on the 20th, accumulation spiked significantly. Currently, the MACD seems poised for a bearish crossover with the RSI settling at 62.

Should You Buy?

After a 6-day increase in value, the stock may dip but its impending catalysts have yet to play out. In broader terms, PHBI is a stock worth considering in light of the almost guaranteed growth of the US cannabis industry. This means PHBI may be a promising long-term investment, with an attractive risk-reward ratio. 

With a nation-wide ad campaign in the works, PHBI will likely be on many people’s radars soon. If increasing media attention results in more momentum, PHBI could hit May’s highs of $.053 after breaking through its new resistance level. With this potential runup, PHBI may be one of the penny stocks to buy now 2021.

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