As you will see from this list, penny stocks in Canada come from a wide range of industries.
Currently, nearly 80% of all stocks on the Toronto Stock Exchange are priced below $5.00 per share. There are also hundreds of penny stocks that trade on the TSX Venture Exchange or the Canadian Securities Exchange (CSE).
That does not make them all penny stocks, but many are.
Penny stocks are popular among value investors who believe that they can increase in price after a catalyst like a new product release or acquisition by a larger company.
If you want to add a bit of risk to your portfolio, check out this list of the best Canadian penny stocks to buy on the TSX for 2024.
What is a Penny Stock?
A penny stock is exactly as it sounds: security that trades on the public markets with a low market cap and a share price that is generally priced below $5.00.
Don’t be fooled by their name, while some penny stocks do trade for actual pennies, most trade between $1.00 to $5.00.
These stocks appear cheap and inexpensive, but the risk of investing in these generally outweighs the potential reward.
Penny stocks go by other names as well, like microcap stocks or pink sheet stocks.
They are easily identifiable because they usually trade on the OTC or Over-The-Counter markets rather than the NASDAQ or the New York Stock Exchange in the US.
In Canada, there is no official OTC market, so Canadian penny stocks still trade on the Toronto Stock Exchange or other Canadian exchanges.
Related: Free Stock Trading Apps in Canada.
Top 10 Penny Stocks in Canada To Buy in 2024
Below are 10 of the hottest penny stocks you can buy in Canada.
1. American Lithium Corp (CVE:LI)
We all know that Lithium is an essential component for rechargeable batteries in things like electric vehicles and smartphones.
The global demand for lithium has skyrocketed over the past decade and will only increase from here as the world shifts towards these secular trends.
Despite the company’s name, American Lithium Corp is based in Vancouver, BC, and has a diverse geographical portfolio that includes two of the largest lithium projects in the Americas. One of which is their TLC lithium project in Nevada, which has a net present value estimate of $3.26 billion.
With American Lithium Corp, you also get a well-established company that has been operating since 1974.
American Lithium Corp is a play on the rising demand for both lithium and uranium moving forward, which are both viable paths for the company to grow its business for the foreseeable future.
In addition, the passing of the US Inflation Reduction Act in 2022 also boosted the company, with loans provided by the U.S. government to build out the lithium industry.
2. BlackBerry Limited (TSX: BB.TO)
BlackBerry, a company that needs no introduction, was once the pinnacle of Canadian innovation. The company dominated the smartphone industry in the early 2010s but has seen a massive decline since then.
Nowadays, the company focuses on products and services related to cybersecurity and the Internet of Things. While far from its former glory, the company is taking steps in the right direction. The company reported cost savings of $55 million last year through refocusing efforts, which has helped it develop a path toward profitability in the near future.
3. Tilray Brands Inc (TSX: TLRY.TO)
Tilray Brands was once the most valuable cannabis company in Canada. While its valuation is no longer close to the $18 billion it had in 2018, Tilray remains a top company in the cannabis industry.
Despite being founded in Canada, Tilray has shifted its focus towards international operations. The company was the first to legally export cannabis to the United States for medical purposes back in 2018 and continues to make inroads south of the border.
The company has focused resources on the beverage industry, introducing cannabis-infused drinks to states where the drug has been legalized. The company has also integrated traditional alcoholic beverages into its portfolio as well.
This strategy appears to be successful, with the company reporting over $300 million in pro forma revenue from its beverages division in 2023.
4. FOBI AI (TSXV:FOBI.V)
At its heart, FOBI AI is a data analytics company that uses real-time analytics to help businesses improve efficiency while improving margins and reducing costs.
As its name suggests, FOBI uses artificial intelligence and machine learning, as well as elements of the Internet of Things, with its hardware integration.
FOBI already has a long list of customers, including Shopify, Block, Lightspeed, and the AWS Partner Network.
Clients can utilize Fobi’s API to integrate directly into websites and software ecosystems, as well as its digital wallet, which includes NFC technology for payments and transactions.
In 2023, Fobi’s tech was utilized in over 150 countries, primarily through their wallet pass technology for event ticketing and venue management.
5. Good Natured Products (CVE: GDNP)
If there was a company name that perfectly encompassed its business, it would be Good Natured Products. This company creates bioplastics and biodegradable food containers.
Their products are made from plant-based ingredients and not petroleums like most plastics.
With over 400 different products across packaging, general merchandise, commercial supplies, industrial, and services, Good Natured Products is not just any green company. It is well-established and partners with retailers and businesses more than selling directly to consumers.
6. Athabasca Oil Corporation (TSX:ATH)
Even energy stocks can be penny stocks, as is exhibited by Athabasca Oil Corporation. Unlike traditional oil companies, Athabasca focuses on Light Oil and Thermal Oil as its main output products.
In February of 2024, the company announced the creation of a new subsidiary, Duvernay Energy Corporation. This allowed the company to de-risk its Duvernay project in Kaybob, Alberta.
Duvernay is a new shale project extracted from formations that contain oil, condensate, and natural gas.
While the subsidiary is still in its early stages, it is estimated to produce up to 25,000 Barrels of oil equivalent per day (boe/d) by the end of 2024.
7. Drone Delivery Canada (CVE: FLT)
The company’s name says it all. Drone Delivery Canada wants to use its cost-effective and highly scalable delivery system to provide a solution for Canadian supply chains.
Drone Delivery Canada is working with everyone from eCommerce brands to pharmacies to indigenous communities in remote areas of Canada.
With all of the hype around companies like Amazon (NASDAQ: AMZN) using drones to deliver packages, we could be looking at the future of last-mile delivery.
The company has partnerships with public and private sector partners like UBC, the Edmonton International Airport, and Bell Mobility to explore and deploy drone technology for various uses.
Shares of FLT.V are up by more than 30% this year but are still down by more than 50% over the past 52 weeks of trading.
8. Poet Technologies Inc (CVE:PTK)
This Toronto-based company specializes in optics-based communications between different electronic devices. Also known as “photonics,” Poet’s technology uses light instead of electrons to move data.
Poet utilizes wafer-level integration with its Optical Interposer platform and has developed a niche in the Internet of Things market.
Its technology is used in data centers, 5G telecommunications, the Internet of Things, Automotive LiDar, and onboard optics.
The company itself has a strong balance sheet with nearly zero debt and a strong cyclical pattern of growth.
It also owns patents for most of its technology and is looking to be a strong player in the future of connected devices and automation.
9. Frontier Lithium (TSXV: FL)
This Canadian company holds some of the largest lithium reserves in Ontario. While their main project in Northern Ontario is still in its early stages, the site has the potential to become a top 3-size contained lithium operation in North America.
Named the PAK project, the ownership of this asset is a joint venture between Frontier and Mitsubishi Corporation, with Frontier owning 75 percent and Mitsubishi owning 25 percent.
The company also has an advantage over other lithium companies based on its proximity to auto manufacturing centers around Windsor and Detroit.
10. Fortuna Silver Mines (TSX:FVI)
This Vancouver-based mining company focuses on silver and gold products from its many projects across South America and Mexico.
Fortuna, founded in 1990, is a long-established company that focuses on the extraction of gold, silver, lead, and zinc. In 2023, 90 percent of net sales were from gold and silver, and the fourth quarter of 2023 saw record production levels for the company.
Shares of Fortuna have surged over the past 6 months, seeing a return of over 50 percent.
Best Canadian Penny Stocks
11. Cronos Group (TSX:CRON)
Cronos Group is another leader in the Canadian cannabis industry, with both local and international products.
The company has already distributed its products across five different continents as global acceptance of cannabis continues to rise.
Some of its subsidiary product lines include PEACE NATURALS, COVE, SPINACH, and CBD product brands Lord Jones, Happy Dance, and PEACE+.
Aside from Canadian operations, Cronos Group also has a joint venture with Israeli company Kibbutz Gan Shmuel. While not legalized in Israel, Cronos is a leader in research and development for medical purposes in the country.
The company also has a present in medical research and development operations in Australia and Germany.
12. Ventripoint Diagnostics (CVE:VPT)
Ventripoint Diagnostics is a Toronto-based company that deals in the heart analysis industry by utilizing artificial intelligence technology to accurately read echocardiograms.
It is a technology that allows physicians to get an accurate patient heart reading without having to use an MRI, which saves both time and money.
The company has a partnership with GE Healthcare, which provides them with access to 160 countries with 480,000 ultrasound units worldwide. Ventripoint technology is now being used in major hospitals across North America and Europe.
13. Exro Technologies (TSX:EXRO)
Are you interested in gaining exposure to the electric vehicle industry? You can do so at a very affordable price with Exro Technologies stock.
While it will never get the same coverage as a stock like Tesla (NASDAQ: TSLA), Exro plays a very important role in the industry. It created components that allow EV engines to run more efficiently.
One of these components is called the Coil Driver, which has gained the interest of global OEMs. Exro is already working with one to potentially integrate the Coil Driver into EV engines by late 2024.
The company has stated intentions to up-list on the NASDAQ. However, given the company is currently trading at 64 cents a share, it would take some time before this goal becomes a reality.
14. BTB REIT (TSX:BTB.UN)
Did you think that you would see a REIT stock on this list? REIT stands for Real Estate Investment Trust and allows investors to gain exposure to real estate through their stock portfolios.
REITs are well known for their high distributions, and BTB REIT is no different. This penny stock REIT pays out a massive 8.96% dividend yield on a monthly basis.
This REIT owns 77 properties across Canada with a total portfolio value of $1.2 billion. It has a 94% occupancy rate with nearly 80% of its real estate portfolio in Quebec.
The monthly distribution currently pays $0.025 per share or about $0.30 per share on an annual basis. BTB REIT also has a dividend reinvestment plan or DRIP that allows you to automatically compound your investment over time.
15. Hut8 Mining Corp (TSE: HUT)
Hut8 Mining is one of the largest Bitcoin mining companies in Canada. The company merged with the US Bitcoin Corp in June 2023, with Hut remaining under its normal ticker symbol on both the TSX and the NASDAQ exchanges.
The new entity has 6 mining sites around North America, with a 72 EH/s mining capacity.
Despite Bitcoin’s over 100 percent gains over the past year, Hut stock has struggled. The company’s stock is down 21 percent over the past 12 months.
Where to Buy Penny Stocks in Canada
Below are some of the best brokerage platforms to buy penny stocks in Canada:
Questrade
Questrade is a popular choice amongst Canadian investors as it offers lower trading fees and full access to Canadian penny stocks and over-the-counter markets.
It’s free to sign up for an account, and investors can pick from two different pricing programs.
The first pricing structure is $0.01 per share up to $6.95, and the second is a flat fee of $4.95 per trade.
Once you decide on which plan suits you, simply head to the trading screen and select which Canadian penny stocks you want to invest in by entering the ticker symbol and selecting the number of shares you desire to buy.
Questrade
Trade stocks, ETFs, options, etc.
Low and competitive trading fees
Top platform for advanced traders
Get $50 trade credit with $1,000 funding
Are Penny Stocks Safe Investments?
Here lies the debate about investing in penny stocks. Some traders swear by them, citing that penny stocks provide a valuable investment that makes it easy to create big gains.
One thing we do know is that penny stocks are volatile and that over-the-counter markets are less regulated than the major exchanges.
Any investment can be risky, but penny stocks add an extra layer of uncertainty.
They should be treated more like lottery tickets and should only be traded with money you can afford to lose.
How To Find Penny Stocks in Canada
You can use any stock screener to find Canadian penny stocks.
As we already mentioned, nearly 80% of stocks trading on the Toronto Stock Exchange are trading for below $5.00 per share.
This makes it fairly simple to find Canadian penny stocks to add to your portfolio. First, you’ll need to sign up for a brokerage like Questrade or Qtrade that allows access to Canadian penny stocks.
After that, simply do your own research before making a purchase. The list provided here is a great place to start your research on penny stocks to buy on the TSX.
There are plenty of solid companies that trade as penny stocks.
Penny Stocks vs Regular Stocks
Obviously, the single biggest difference between penny stocks and regular stocks is the price that penny stocks trade at.
Penny stocks also have a much lower market cap and lower trading volume and liquidity.
Generally speaking, lower liquidity also lends to penny stocks seeing wild price fluctuations and much more volatility than large-cap stocks.
Pros of Penny Stocks
- They are cheaper to buy and can return massive gains if traded correctly
- Due to volatility, price increases and profits can often come faster than with regular stocks
- There are a lot of Canadian penny stocks to choose from
Cons of Penny Stocks
- High volatility often means that many penny stocks go down to zero
- Companies lack a sustained track record, and the markets are less regulated
- Some brokerages do not offer the ability to trade penny stocks
Can You Get Rich Off Penny Stocks?
You can get rich off of any investment, but the odds of it happening with penny stocks might be lower.
As previously mentioned, penny stocks should be treated as lottery tickets. Anyone with a ticket has a chance to win the lottery, but more often than not, you won’t.
Always invest in penny stocks at your own risk!
Can You Buy Penny Stocks on the TSX?
Yes, a majority of the stocks that trade on the TSX are considered penny stocks by definition.
Most true penny stocks trade on other exchanges like the Canadian Venture Exchange, but there are cheaply priced stocks on every Canadian exchange.
If you are looking for a bit more safety, the stocks that trade on the TSX are likely more regulated than on any venture exchange.
The top penny stocks mentioned in this article are mainly listed on the TSX.
Are Penny Stocks Good for Beginners?
Generally not. It is considered an advanced method of trading since you should have some knowledge of how the markets react and even things like technical analysis.
If you are just starting out on your investing journey, you are better off buying large-cap stocks or ETFs before venturing into penny stocks.
Can You Buy Penny Stocks in a TFSA or RRSP?
Yes, since TFSA and RRSP investing accounts operate like most other account types, you are free to buy Canadian penny stocks in either type of account.
If you believe a penny stock can make major gains, a TFSA is helpful because any capital gains are not taxable.
However, since both of these accounts are usually meant to encourage long-term saving, it isn’t advised to dedicate all of your contribution room to penny stock investing.
Related: How To Buy Stocks in Canada.
