The election results are bullish for marijuana stocks.
Cannabis stock investors didn’t get the blue wave they were hoping for in the U.S. election, but all 5 status marijuana legalization methods 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 perhaps MSOs. Unfortunately for cannabis investors, Democrats may not gain control of the Senate, potentially restricting significant federal cannabis reform. Being a result, some cannabis stocks initially dropped following the election. Allow me to share the best cannabis stocks to invest in following the election, as reported by Cantor Fitzgerald.
Flower price depreciation has been a significant problem for all Canadian licensed producers, or LPs. But, analyst Pablo Zuanic claims Canadian LPs as Aphria might have “positive collateral benefits” from the U.S. election, assuming Joe Biden takes over the White House. Federal legalization might still be a minimum of two years away, but decriminalization of adult use marijuana and potential federal rescheduling of cannabis could raise Aphria and other Canadian LPs, Zuanic says. He says Aphria has a number of positive catalysts forward in the near term, including an increase of exports. Cantor Fitzgerald has an “overweight” rating and $8.95 cost target for APHA stock.
Canadian LP OrganiGram has had a brutal year in 2020. Zuanic says OrganiGram’s retail sales trends in the third quarter had been relatively strong in comparison with other Canadian LPs. However, Hifyre cannabis sales data for October recommend OrganiGram sales were down twenty five % month over month compared with a five % decline for the entire Canadian retail market. OrganiGram has disappointed investors with its sluggish revenue growth and money burn, but Zuanic is optimistic the company may find its way to growth and profits in the long haul. Cantor Fitzgerald has an “overweight” rating and $4.07 price target for OGI inventory.
While Canadian cannabis stocks are actually struggling, U.S. multistate operators as Cresco Labs are thriving. In the next quarter, Cresco beat consensus analyst sales estimates by thirty % and exceeded the earnings of theirs before interest, taxes, depreciation and amortization expectations by nearly 200 %. Zuanic says Cresco’s forty two % sequential sales advancement in the next quarter was the most effective growth rates with almost all of Cresco’s large MSO peers. Zuanic states the Illinois industry is going to be a major near-term growth driver for Cresco, and its Origin House acquisition should supplement its organic growth. Cantor Fitzgerald has an “overweight” rating and sixteen dolars cost target for CRLBF stock.
Curaleaf is actually a U.S. MSO that works in twenty three states. One of those states is actually New Jersey, which might represent the largest opportunity among the states which legalized recreational marijuana on Election Day. Not merely will Curaleaf benefit from the brand new Jersey sector, but Zuanic says Curaleaf may draw clients from neighboring New York and Pennsylvania. Curaleaf noted astounding 142 % revenue growth and 180 % gross profit growth year over year in the second quarter and holds a leadership position in key states. Cantor Fitzgerald has an “overweight” rating and eighteen dolars cost target for CURLF inventory.
Green Thumb Industries (GTBIF)
Green Thumb Industries is actually a U.S. MSO which runs in 12 states, including California as well as Florida. Zuanic states Green Thumb has the best risk profile of Cantor’s top-rated MSOs. Green Thumb has expanded the footprint of its in Pennsylvania and Illinois without overextending the balance sheet of its, it currently has a sizable presence in New Jersey and Zuanic is projecting revenue will develop from $527 million in 2020 to $982 million by 2022. He also anticipates additional legalization of Pennsylvania, New York, Connecticut as well as Maryland 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 actually an MSO which works largely in Florida. Zuanic recently hosted a call with Trulieve CEO Kim Rivers. After talking with Rivers, Zuanic says he’s comfortable in Trulieve’s potential to maintain a dominant market share of the high-growth Florida medical marijuana market. In addition, Zuanic says Trulieve has a significant opportunity to produce its businesses in other states, like Connecticut, Massachusetts, and California. Lastly, he’s optimistic Florida voters can legalize recreational marijuana in the 2022 midterm election. Cantor Fitzgerald has an “overweight” rating and sixty dolars cost target for TCNNF inventory.
GW Pharmaceuticals (GWPH)
As opposed to the various other cannabis stocks on this list, GW Pharmaceuticals is actually a biopharmaceutical business centered on developing cannabis based drug therapies. 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 states GW’s third quarter Epidiolex sales exceeded his expectations. Also, he sees several bullish catalysts for GW with the end 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 stock.