As you will see from this list, penny stocks in Canada come from a wide range of industries.
Currently, nearly 80% of all stocks that trade on the Toronto Stock Exchange are priced below $5.00 per share.
That does not make them all penny stocks, but a good number of them are.
Penny stocks are popular amongst value investors who believe that these stocks can increase in price after a catalyst like a new product release or acquisition by a larger company.
If you are looking 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 2022.
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, a majority of the trade is between $1.00 to $5.00.
These stocks appear to be 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 2022
Below are 10 of some of the hottest penny stocks you can buy in Canada.
1. Hive Blockchain Technologies (TSX:HIVE)
There may be no industry quite as trendy right now as blockchain technology.
Hive is a company that operates directly in the crypto mining industry and was the first mining company to list publicly in Canada. These factors make Hive one of the top penny stocks in Canada.
Based out of Vancouver, BC, Hive has operations across North America, as well as in Scandinavian countries like Sweden and Iceland.
Iceland in particular has an extremely efficient green energy infrastructure that is cheap and readily available, making it a popular destination for crypto mining.
Temperatures are also naturally cooler in the Nordic region so it is easier to keep mining rigs and data centers at a lower temperature.
Hive exclusively mines the benchmark cryptocurrencies in Bitcoin and Ethereum, as well as Ethereum Classic.
As of September 2021, Hive had 656 Bitcoin mined and stored, a figure that will only continue to rise and grow in value.
Hive has also taken significant stakes in companies like DeFi Technologies and Network Media Group, the latter of which is a major NFT brand.
As far as Canadian penny stocks go, Hive has the potential for a fairly high floor if it allocates its crypto reserves into further revenue streams.
Keep in mind that the price of Hive’s stock generally follows the price of Bitcoin and Ethereum.
2. American Lithium Corp (CVE:LI)
We have all heard about 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 a newly acquired mine in Nevada.
With American Lithium Corp, you also get a well-established company that has been in operation since 1974.
The company has also recently expanded its operations into the uranium industry as it acquired the world’s largest undeveloped uranium deposit in Macusani, Peru.
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.
3. CloudMD Software and Services (CVE:DOC)
Yet another Vancouver-based company that is considered a Canadian penny stock, CloudMD is a connected health platform that sends data-driven information into its integrated healthcare ecosystem.
CloudMD targets the employer market as its primary user base, with over 560,000 active users in its database.
The company provides what it calls a ‘clinic in a box’ solution which includes virtual health meetings with doctors, electronic medical records, and health education.
The stock has been beaten down as of late as we inch closer to being clear of the COVID-19 pandemic.
Similar virtual health stocks like Teladoc (NYSE:TDOC) have also seen losses as pandemic-related stocks have been treated as if they were in a bubble.
Even when the world opens back up, it’s difficult to imagine a future without virtual healthcare, particularly for routine patient needs like prescription refills.
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.
FOBI’s stock has already seen quite the surge since its IPO, but has pulled back from its highs of just under $4.00 per share.
5. OrganiGram Holdings Stock (TSX:OGI)
OrganiGram Holdings is actually the parent company of the brand that most people recognize as OrganiGram Inc.
This company is a licensed producer of cannabis and cannabis-related products.
It was established back in 2013 for the medical cannabis industry, and as federal legalization came into effect in Canada, OrganiGram expanded into recreational cannabis products.
Even if you don’t know OrganiGram’s products, you might know its sub-brands like The Edison Cannabis Company, Indi, Bag O’ Buds, SHRED, or Trailblazer.
The stock has fallen quite a bit from its all-time high price where it peaked at over $5.00 per share earlier in 2021.
The Canadian cannabis sector has not been an easy one for investors to predict, but OrganiGram has a healthy balance sheet with next to no debt, meaning it could be a prime candidate to acquire other companies in the space as the sector continues to consolidate.
Potential short-term catalysts make OGI part of this list of penny stocks to watch.
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.
The company operates several top-tier projects across Canada and saw an annual free cash flow figure of $90 million CAD.
After a successful quarterly earnings call, the stock is now trading at its 52-year highs, following a sharp decline during the heart of the COVID-19 pandemic.
Athabasca also offers a 3.5% dividend yield, which isn’t much considering the underlying share price, but it does provide a safe floor for investors that most energy companies have.
7. Drone Delivery Canada (CVE:FLT)
You get one guess as to what this company does! Drone Delivery Canada is one of the country’s leading drone delivery services.
We have all heard about the future of drone delivery through companies like Amazon, but Drone Delivery Canada is already putting this into action.
The company operates at airports, facilitates last-mile courier delivery, drops off rush prescriptions, and even helps in the mining and oil and gas industries.
Drone Delivery Canada has a focus on connecting the broader delivery networks with rural and hard-to-reach areas.
The company also trades on the US OTC market and the Frankfurt exchange in Germany. As part of a growing industry, FLT makes this top 10 penny stocks list due to the potential for rapid future growth.
8. Poet Technologies Inc (CVE:PTK)
This Toronto-based company specialty in optics-based communications between different electronic devices.
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, 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. Argonaut Gold (TSX:AR)
Gold and other natural resources have always been a staple of the Canadian stock market, as the mineral-rich landscape lends to a strong mining sector.
Argonaut Gold is a Canadian business that does most of its mining internationally in places like Mexico and Nevada.
Argonaut is working towards processing 300-500,000 ounces of gold annually, which would make it a high-performing, mid-tier gold miner.
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 just ekes under the penny stock threshold of $5.00 per share, but it has been a long-established company after being founded in 1990.
Shares of Fortuna were actually trading well above $10 per share last year, but the stock has lost over 52% of its value during the past year.
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+.
Recently, Cronos Group has partnered with globally recognized biotech company Ginkgo Bioworks to combine fermentation and cannabinoids to appeal to the mainstream audience.
Just like OGI, the potential for short-term catalysts is one of the main reasons CRON makes this penny stocks list.
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.
Ventripoint is branching out into other industries as well, including a partnership with the North Carolina State University veterinary hospital to apply the technology to animals as well.
13. Exro Technologies (TSX:EXRO)
With the advancement of electric vehicles, Exro is at the center of clean energy technology and battery innovation.
The company specializes in improving technology for things like electric scooters and has implemented energy storage technology by utilizing retired electric vehicle battery cells.
Its Coil Driver platform is a patented innovation for electric vehicles that is using motor intelligence to increase driving energy optimization.
If you are bullish on the electric vehicle sector, then Exro should be part of your list of penny stocks to watch.
14. BTB REIT (TSX:BTB.UN)
For added diversification, let’s add a REIT or Real Estate Investment Trust to the list. These are popular because REITs provide investors with exposure to real estate investments in the form of stock.
REITs receive rental income and pay those out to shareholders as dividends, so REITs are excellent cash-generating assets for your portfolio.
BTB REIT was founded in 2005 and owns and manages over 71 properties across Canada.
It focuses on industrial and retail buildings, with a total asset value of over $1 billion. This particular REIT pays a healthy 7.39% dividend yield that pays out on a monthly basis.
15. Bombardier, Inc (TSX:BBD.B)
Bombardier is a well-known company and brand across Canada, but its stock has struggled mightily over the past few years.
It used to be a leading business jet manufacturer that also produced trains and other vehicles.
It also has a public transportation segment where it builds buses and commuter trains from markets across the world.
To return to its previous standing as a Canadian market leader, Bombardier will likely need global travel to reopen to pre-pandemic levels making this a major buy-low stock right now.
Where to Buy Penny Stocks in Canada
Below are some of the best brokerage platforms to buy penny stocks in Canada:
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.
Trade stocks, ETFs, options, etc.
Low and competitive trading fees
Top platform for advanced traders
Get $50 trade credit with $1,000 funding
Wealthsimple is another great choice, especially for younger Canadian investors.
Wealthsiple is one of the first Canadian brokerages to allow $0 trading commissions for Canadian and US stocks and ETFs.
This includes Canadian penny stocks, which are definitely available for investors using Wealthsimple.
All you need to do is enter which Canadian penny stock ticker symbol you’d like to buy, enter the number of shares, and select the market price to buy it at the current trading price.
Trade stocks and ETFs for free
Available on all devices & legit
Great trading platform for beginners
$150 cash bonus when you trade $300
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 Wealthsimple, 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 have 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.