The election results are actually bullish for marijuana stocks.
Cannabis stock investors did not get the blue wave they were hoping for in the U.S. election, but just 5 state marijuana legalization procedures on the ballot have passed. Recreational and/or medical marijuana was legalized in Arizona, Mississippi, Montana, new Jersey and South Dakota, increasing the potential geographic footprint of cannabis multistate operators, or MSOs. Unfortunately for cannabis investors, Democrats may not gain control of the Senate, possibly restricting 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 invest in following the election, based on Cantor Fitzgerald.
Flower price depreciation continues to be an important concern for almost all Canadian licensed producers, or perhaps LPs. But, analyst Pablo Zuanic claims Canadian LPs as Aphria could have “positive collateral benefits” from the U.S. election, assuming Joe Biden takes more than the White House. Federal legalization might still be a minimum of 2 years away, but decriminalization of adult-use marijuana and potential federal rescheduling of cannabis can boost Aphria along with other Canadian LPs, Zuanic says. He claims Aphria has multiple positive catalysts in front in the near term, including an increase of exports. Cantor Fitzgerald has an “overweight” rating and $8.95 cost target for APHA inventory.
Canadian LP OrganiGram has had a brutal year in 2020. Zuanic tells you OrganiGram’s retail sales trends in the third quarter were fairly strong compared with other Canadian LPs. But, Hifyre cannabis sales data for October suggest OrganiGram sales were down 25 % month over month compared with a five % decline for the complete Canadian retail market. OrganiGram has disappointed investors with its sluggish revenue growth as well as cash burn, but Zuanic is optimistic the small business will see its way to profitability and growth in the long term. 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 thriving. In the next quarter, Cresco beat consensus analyst sales estimates by 30 % and exceeded their earnings before interest, taxes, depreciation and amortization expectations by almost 200 %. Zuanic affirms Cresco’s 42 % sequential sales development in the next quarter was the very best growth rates with many of Cresco’s large MSO peers. Zuanic states the Illinois market is going to be a leading near-term growth driver for Cresco, and its Origin House acquisition ought to supplement its natural growth. Cantor Fitzgerald has an “overweight” rating and $16 price target for CRLBF stock.
Curaleaf is actually a U.S. MSO that operates 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 simply will Curaleaf benefit from the new Jersey market, but Zuanic says Curaleaf will likely draw clients from neighboring Pennsylvania and New York. Curaleaf noted amazing 142 % revenue growth as well as 180 % disgusting profit development year over year in the next quarter and also holds a leadership position in key states. Cantor Fitzgerald has an “overweight” rating and $18 cost target for CURLF stock.
Green Thumb Industries (GTBIF)
Green Thumb Industries is actually a U.S. MSO that 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 Illinois and Pennsylvania without overextending the balance sheet of its, it already has a sizable presence in New Zuanic and Jersey is actually projecting revenue will develop from $527 million in 2020 to $982 million by 2022. He also anticipates further legalization in Pennsylvania, New York, Maryland and Connecticut in coming years. Cantor Fitzgerald has an “overweight” rating and twenty nine dolars price target for GTBIF stock.
Trulieve Cannabis Corp. (TCNNF)
Trulieve Cannabis is an MSO that operates largely in Florida. Zuanic recently hosted a call with Trulieve CEO Kim Rivers. After talking with Rivers, Zuanic says he is comfortable in Trulieve’s capacity to keep a dominant market share of the high growth Florida medical marijuana market. Additionally, Zuanic affirms Trulieve includes a tremendous chance to produce its companies in some other states, including Connecticut, Massachusetts, and California. Lastly, he is optimistic Florida voters might legalize recreational marijuana in the 2022 midterm election. Cantor Fitzgerald has an “overweight” rating and sixty dolars price target for TCNNF inventory.
GW Pharmaceuticals (GWPH)
Unlike the various other cannabis stocks on this list, GW Pharmaceuticals is actually a biopharmaceutical business centered on creating cannabis-based drug treatments. The company’s lead drug Epidiolex has been approved by the Food as well as Drug Administration for the therapy of pediatric epilepsy. Cantor analyst Charles Duncan says GW’s third quarter Epidiolex sales exceeded his expectations. He also sees several bullish catalysts for GW with the end of 2021, including further penetration into adult customers and additional rollout in Europe. Cantor has an “overweight” rating and $165 price target for GWPH inventory.