The election results are bullish for marijuana stocks.
Cannabis stock investors didn’t get the blue wave these were hoping for in the U.S. election, but all five status marijuana legalization procedures on the ballot have passed. Recreational and/or medical marijuana was legalized in Arizona, Mississippi, Montana, South Dakota and new Jersey, increasing the potential geographic footprint of cannabis multistate operators, or perhaps MSOs. Unfortunately for cannabis investors, Democrats might not gain control of the Senate, possibly limiting considerable federal cannabis reform. To be a result, a few cannabis stocks initially dropped following the election. Allow me to share the best cannabis stocks to purchase following the election, as reported by Cantor Fitzgerald.
Flower priced depreciation continues to be a significant issue for almost all Canadian licensed producers, or perhaps LPs. But, analyst Pablo Zuanic claims Canadian LPs as Aphria may have “positive collateral benefits” from the U.S. election, assuming Joe Biden takes more than the White House. Federal legalization may still be no less than 2 years away, but decriminalization of adult use marijuana and potential federal rescheduling of cannabis can boost Aphria as well as other Canadian LPs, Zuanic says. He states Aphria has multiple positive catalysts forward in the near term, including a rise in exports. Cantor Fitzgerald has an “overweight” rating and $8.95 cost target for APHA stock.
Canadian LP OrganiGram has had a brutal year of 2020. Zuanic affirms OrganiGram’s retail sales trends in the third quarter had been fairly strong in comparison with various other Canadian LPs. However, Hifyre cannabis sales information for October suggest OrganiGram sales were down 25 % month over month compared with a five % decline for the complete Canadian retail store. OrganiGram has disappointed investors with its sluggish revenue growth as well as cash burn, but Zuanic is hopeful the business will find its way to earnings and growth in the long run. Cantor Fitzgerald has an “overweight” rating and $4.07 price target for OGI stock.
While Canadian cannabis stocks are struggling, U.S. multistate operators as Cresco Labs are actually thriving. In the next quarter, Cresco beat consensus analyst sales estimates by 30 % and exceeded the earnings of theirs before interest, taxes, depreciation and amortization expectations by about 200 %. Zuanic says Cresco’s forty two % sequential sales progress in the second quarter was the most effective growth rates among all of Cresco’s big MSO peers. Zuanic states the Illinois industry is going to be a serious near term growth driver for Cresco, and its Origin House acquisition ought to supplement its organic growth. Cantor Fitzgerald has an “overweight” rating and $16 cost target for CRLBF stock.
Curaleaf is a U.S. MSO that works in twenty three states. Among those states is New Jersey, that might represent the largest opportunity with the states which legalized recreational marijuana on Election Day. Not only will Curaleaf gain from the brand new Jersey market, but Zuanic says Curaleaf will probably draw customers from neighboring Pennsylvania and New York. Curaleaf reported impressive 142 % revenue growth and 180 % disgusting profit development year over year in the second quarter and holds a leadership position in key states. Cantor Fitzgerald has an “overweight” rating and $18 price target for CURLF inventory.
Green Thumb Industries (GTBIF)
Green Thumb Industries is a U.S. MSO which runs in twelve states, like Florida and California. Zuanic reveals Green Thumb has the ideal risk profile of Cantor’s top-rated MSOs. Green Thumb has expanded its footprint in Pennsylvania and Illinois without overextending its balance sheet, it already has a sizable presence in New Zuanic and Jersey is projecting revenue will grow from $527 million in 2020 to $982 million by 2022. Additionally, he anticipates additional legalization in Pennsylvania, New York, Connecticut as well as Maryland in coming years. Cantor Fitzgerald has an “overweight” rating and twenty nine dolars cost target for GTBIF inventory.
Trulieve Cannabis Corp. (TCNNF)
Trulieve Cannabis is actually an MSO which runs primarily in Florida. Zuanic recently hosted a call with Trulieve CEO Kim Rivers. After speaking with Rivers, Zuanic says he is comfortable in Trulieve’s potential to maintain a dominant market share of the high growth Florida medical marijuana industry. In addition, Zuanic says Trulieve has a substantial opportunity to grow its businesses in other states, including Connecticut, Massachusetts, and California. Last but not least, he is optimistic Florida voters can legalize recreational marijuana in the 2022 midterm election. Cantor Fitzgerald has an “overweight” rating and $60 cost target for TCNNF inventory.
GW Pharmaceuticals (GWPH)
Unlike the other cannabis stocks on this list, GW Pharmaceuticals is actually a biopharmaceutical company focused on creating cannabis-based drug treatments. The company’s lead drug Epidiolex has been approved by the Food and Drug Administration for the treatment of pediatric epilepsy. Cantor analyst Charles Duncan says GW’s third-quarter Epidiolex sales exceeded his expectations. He also sees assorted bullish catalysts for GW with the conclusion of 2021, which includes further penetration into more rollout and adult patients in Europe. Cantor has an “overweight” rating and $165 cost target for GWPH inventory.