Head over to your nearest shopping centre or mall and you'll notice, a bunch of Cannabis outlets popping up.
From cannabis flavoured soaps in the Body Shop, CBD outlets selling cannabis oils for your vape or even cannabis infused drinks and cooking oils.
This is an industry that is pretty much taking over South Africa and the world.
In fact, Green Fund estimated that the global cannabis market is currently worth over R2 trillion and is forecasted by Barclays to be worth over R4 trillion by 2028 or $272 billion.
This is one industry you do not want to miss out on when it comes to investing and eventually trading in.
Today I'm going to discuss the first JSE listed cannabis Penny Stock Company that is about to shoot through the roof and how you can get your hands on it.
But first let's start with where it all started…
Thank your neighbour for welcoming the dagga market into SA
Did you know that Lesotho was the first African country to decriminalise cannabis over two years ago?
And since then the cannabis market has been booming as other countries like Botswana, Swaziland, Zimbabwe, Uganda and now South Africa have been rolling out their licensing regimes to attract investments.
To understand how we are being exposed to the first cannabis listed stock on the JSE, first we need to understand the company – Zarenka Group.
Zarenka Group has six cannabis licenses in the Kingdom of Lesotho which allows it to cultivate, manufacture, harvest, distribute, export and import cannabis for medical, recreational and any other use for acquiring the products.
Next we have Labat Africa (JSE:LAB) which was listed on the JSE over 20 years ago which mainly holds investments in logistics, tech and energy.
Since inception, we’ve seen the Labat share price move from 2 cents a share all the way up to 150c… But I expect, this to change which could very well step out of the penny stock zone sooner than we think once it hits my first target price.
And the reason is, Brian van Rooyen, former rugby boss and player who is CEO of Labat Africa, has now entered into the cannabis market with a 70% purchase stake in the Zarenka Group.
They have identified over 58 hectares of land in the Eastern Cape and is in other negotiations for additional land. By acquiring the majority stake in Zarenka Group, this will give effect to establishing a fully integrated cannabis business where he said it will be “a major player in the cannabis industry”
“Labat will provide a gateway to a number of investors through its 30-year old business, which has been listed for 25 years, providing the opportunity to invest in the cannabis market in Southern Africa industry on a public platform.”
I could go on about the developments with Labat and the planning of dual-listing on the Dubai Financial Market or ways they will get more capital from Labat Cannabis – but I’m more interested in how the charts are looking.
Why JSE Cannabis Penny Stock is about to sky rocket
Looking at the daily chart of Labat Africa share, you can see that since 2016 up until 2019 the market has been trading in a sideways (box) range between 20cents and 50 cents…
And since the news came out about the Labat Africa Company having a vested interest in the cannabis market, the share price broke above through the 50 cents barrier (resistance).
This showed us that demand and buying has kicked into this penny stock and is ready to make a new four year high.
If we take the Top-Down calculation, between the top and bottom of the box formation, we’ll be able to see where its next target price will be…
Here is the calculation.
Target = (Top – Down) + Top
= (50c – 20c) + 50c
This means, we can expect the first price of Labat Africa to hit 80 cents… And this will only be the beginning.
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Here are three ways you can profit from this JSE listed cannabis penny stock
First you can either buy the Labat Africa group shares yourself and hold it until it hits the high of 80 cents where you can make a decent profit.
Second you can join Real Wealth
, where our experts will give you a lot more detail into these cannabis related profit opportunities.
Third, you can join Red Hot Penny Shares
with your expert Francois Joubert who will give you a thorough analysis on the best penny stocks to buy in South Africa.
Analyst, Red Hot Storm Trader