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 just five state 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 possible geographic footprint of cannabis multistate operators, or MSOs. Unfortunately for cannabis investors, Democrats may not gain control of the Senate, possibly limiting significant federal cannabis reform. Being a result, some cannabis stocks initially dropped following the election. Allow me to share the best cannabis stocks to purchase following the election, according to Cantor Fitzgerald.
Flower priced depreciation has long been a significant problem for almost all Canadian licensed producers, or maybe LPs. However, 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 may still be at least 2 years away, but decriminalization of adult-use marijuana and potential federal rescheduling of cannabis could boost Aphria along with other Canadian LPs, Zuanic states. He says Aphria has several 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 inventory.
Canadian LP OrganiGram has had a brutal year of 2020. Zuanic says OrganiGram’s retail sales trends in the third quarter were relatively strong compared with other Canadian LPs. Nevertheless, Hifyre cannabis sales information for October suggest OrganiGram sales were down twenty five % month over month compared with a five % decline for the entire Canadian retail store. OrganiGram has disappointed investors with its sluggish revenue growth as well as cash burn up, but Zuanic is optimistic the business may find the way of its to growth and profits in the long run. 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 like Cresco Labs are actually thriving. In the next quarter, Cresco beat consensus analyst sales estimates by thirty % and exceeded their earnings before amortization expectations, depreciation, taxes, and interest by almost 200 %. Zuanic affirms Cresco’s 42 % sequential sales development in the second quarter was the top growth rates among all of Cresco’s large MSO peers. Zuanic alleges the Illinois market will be a leading near-term growth driver for Cresco, and the Origin House acquisition of its should supplement its organic growth. Cantor Fitzgerald has an “overweight” rating and $16 cost target for CRLBF inventory.
Curaleaf is a U.S. MSO which operates in twenty three states. One of those states is New Jersey, which may represent the largest opportunity among the states that legalized recreational marijuana on Election Day. Not only will Curaleaf benefit from the new Jersey market, but Zuanic says Curaleaf will probably draw customers from neighboring New York and Pennsylvania. Curaleaf noted amazing 142 % revenue growth and 180 % gross earnings development year over year in the next quarter and 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 a U.S. MSO that runs in twelve states, including California and Florida. Zuanic says Green Thumb has the best risk profile of Cantor’s top-rated MSOs. Green Thumb has expanded its footprint in Pennsylvania and Illinois without overextending its balance sheet, it currently has a sizable presence in New Zuanic and Jersey is projecting revenue will develop from $527 million in 2020 to $982 million by 2022. He also anticipates additional legalization in Pennsylvania, New York, Maryland as well as Connecticut in coming years. Cantor Fitzgerald has an “overweight” rating and $29 cost target for GTBIF inventory.
Trulieve Cannabis Corp. (TCNNF)
Trulieve Cannabis is actually an MSO that works 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 ability to keep a dominant market share of the high growth Florida medical marijuana market. Additionally, Zuanic affirms Trulieve includes a substantial chance to produce the companies of its in other states, like Connecticut, Massachusetts, and California. Lastly, he is upbeat Florida voters might 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 various other cannabis stocks on this list, GW Pharmaceuticals is actually a biopharmaceutical company focused on creating cannabis-based drug therapies. The company’s lead drug Epidiolex has been approved by the Food and Drug Administration for the therapy of pediatric epilepsy. Cantor analyst Charles Duncan states GW’s third-quarter Epidiolex sales exceeded his expectations. He also sees several bullish catalysts for GW through the tail end of 2021, which includes further penetration into adult clients and more rollout in Europe. Cantor has an “overweight” rating and $165 cost target for GWPH inventory.