Making a Quick Buck from Pot Stocks?
If you want to make a quick buck in the stock market, few industries look more attractive than pot.
Just take a look at Akerna Corp (NASDAQ:KERN) stock and you’ll see what I mean. The company’s share price closed at $3.60 on November 13, and at the time of this writing, it’s trading at $8.70.
So in less than three weeks, Akerna stock more than doubled.
Now, you are probably wondering what the catalyst was behind that rally.
Well, first of all, let’s take a look at what Akerna does for a living, because this Denver, Colorado-based pot stock is actually quite different from other companies in the industry.
Who Is Akerna Corp?
Founded in 2010, Akerna is a regulatory compliance technology company serving the legal cannabis industry.
It essentially provides pot producers and government entities with a central data management system for tracking regulated cannabis products. And the system works through the entire supply chain—from seed to product to shelf to customer.
Since the company started, it has tracked more than $16.0 billion in pot sales.
Its business has been growing, too. In Akerna’s fiscal 2016 (its fiscal year ends on June 30 of each calendar year), the company’s software and services revenue totaled $2.1 million. (Source: “Investor Presentation October 2019,” Akerna Corp, last accessed December 2, 2019.)
In fiscal 2019, the pot company generated a whopping $10.7 million in software and services revenue. That translated to a compound annual growth rate (CAGR) of 73%.
To break it down, the growth was driven by a 70% CAGR in software revenue and an 82% CAGR in services revenue.
And because Akerna’s fiscal year ends on June 30, its fiscal 2020 first-quarter results are already available.
For the first quarter, which ended