The election results are actually bullish for marijuana stocks.
Cannabis stock investors did not get the blue wave these were hoping for in the U.S. election, but just five state marijuana legalization measures on the ballot have passed. Recreational and/or medical marijuana was legalized in Arizona, Mississippi, Montana, new Jersey and South Dakota, increasing the possible geographic footprint of cannabis multistate operators, or perhaps MSOs. Unfortunately for cannabis investors, Democrats may not gain control of the Senate, possibly limiting significant federal cannabis reform. To be a result, some cannabis stocks initially dropped following the election. Here are the best cannabis stocks to purchase following the election, as reported by Cantor Fitzgerald.
Flower priced depreciation continues to be an important issue for all Canadian licensed producers, or perhaps LPs. However, 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 may still be no less than two years away, but decriminalization of adult-use marijuana and potential federal rescheduling of cannabis may raise Aphria as well as other Canadian LPs, Zuanic states. He says Aphria has a number of 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 of 2020. Zuanic tells you OrganiGram’s retail sales trends in the third quarter had been fairly strong in contrast to various other Canadian LPs. However, Hifyre cannabis sales data for October suggest OrganiGram sales were down 25 % month over month in contrast to a five % decline for the overall Canadian retail market. OrganiGram has disappointed investors with the sluggish revenue growth of its as well as money burn, but Zuanic is optimistic the company will find the way of its to growth and profits in the long haul. Cantor Fitzgerald has an “overweight” rating and $4.07 cost target for OGI inventory.
While Canadian cannabis stocks are struggling, U.S. multistate operators as Cresco Labs are actually thriving. In the second quarter, Cresco beat consensus analyst sales estimates by thirty % and exceeded their earnings before interest, taxes, depreciation and amortization expectations by nearly 200 %. Zuanic affirms Cresco’s 42 % sequential sales expansion in the second quarter was the very best growth rate among all of Cresco’s big MSO peers. Zuanic says the Illinois industry is going to be a leading 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 inventory.
Curaleaf is a U.S. MSO which works in twenty three states. One of those states is New Jersey, that might represent the largest opportunity among the states which legalized recreational marijuana on Election Day. Not only will Curaleaf gain from the new Jersey market, but Zuanic says Curaleaf will probably draw clients from neighboring Pennsylvania and New York. Curaleaf reported impressive 142 % revenue growth and 180 % disgusting profit development year over year in the next quarter and holds a leadership position in key states. Cantor Fitzgerald has an “overweight” rating and $18 price target for CURLF stock.
Green Thumb Industries (GTBIF)
Green Thumb Industries is actually a U.S. MSO that works in 12 states, including California and Florida. Zuanic states Green Thumb has the ideal 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 already has a sizable presence in New Jersey and Zuanic is actually projecting revenue will grow from $527 million in 2020 to $982 million by 2022. Also, he anticipates additional legalization in Pennsylvania, New York, Connecticut and Maryland in coming years. Cantor Fitzgerald has an “overweight” rating and $29 price target for GTBIF stock.
Trulieve Cannabis Corp. (TCNNF)
Trulieve Cannabis is an MSO which works largely in Florida. Zuanic recently hosted a call with Trulieve CEO Kim Rivers. After talking with Rivers, Zuanic says he is confident in Trulieve’s capacity to maintain a dominant market share of the high-growth Florida medical marijuana industry. Moreover, Zuanic affirms Trulieve has a substantial opportunity to grow the businesses of its in other states, like California, Massachusetts and Connecticut. Last but not least, 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)
As opposed to 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 treatment 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 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 price target for GWPH inventory.