The election results are bullish for marijuana stocks.
Cannabis stock investors did not get the blue wave these were hoping for in the U.S. election, but all five status marijuana legalization methods on the ballot have passed. Fun 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 might 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. Here are the best cannabis stocks to invest in following the election, as reported by Cantor Fitzgerald.
Flower priced depreciation continues to be a significant problem for all Canadian licensed producers, or LPs. Nevertheless, analyst Pablo Zuanic states 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 at least 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 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 stock.
Canadian LP OrganiGram has had a brutal year of 2020. Zuanic affirms OrganiGram’s retail sales trends in the third quarter had been relatively strong in contrast to various other Canadian LPs. Nonetheless, Hifyre cannabis sales information for October recommend OrganiGram sales were down 25 % month over month in contrast to a 5 % decline for the complete Canadian retail market. OrganiGram has disappointed investors with the sluggish revenue growth of its as well as cash burn, but Zuanic is actually hopeful the company will see its way to growth and earnings in the long run. Cantor Fitzgerald has an “overweight” rating and $4.07 price target for OGI inventory.
While Canadian cannabis stocks are struggling, U.S. multistate operators like Cresco Labs are 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 forty two % sequential sales progress in the next quarter was the best growth rate with many of Cresco’s large MSO peers. Zuanic states the Illinois market is going to be a serious near term growth driver for Cresco, and the Origin House acquisition of its should supplement the organic growth of its. Cantor Fitzgerald has an “overweight” rating and sixteen dolars price target for CRLBF stock.
Curaleaf is a U.S. MSO that operates in twenty three states. Among those states is New Jersey, which may represent probably the largest opportunity with the states which legalized recreational marijuana on Election Day. Not only will Curaleaf gain from the brand new Jersey sector, but Zuanic says Curaleaf may draw customers from neighboring Pennsylvania and New York. Curaleaf noted impressive 142 % revenue growth and 180 % gross earnings growth year over year in the next quarter and also 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 that works in 12 states, like Florida and California. Zuanic claims Green Thumb has the best risk profile of Cantor’s top-rated MSOs. Green Thumb has expanded its footprint in Illinois and Pennsylvania without overextending its balance sheet, it currently 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. He also anticipates additional legalization in Pennsylvania, New York, Maryland as well as 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 works primarily in Florida. Zuanic recently hosted a call with Trulieve CEO Kim Rivers. After speaking with Rivers, Zuanic says he is confident in Trulieve’s ability to keep a dominant market share of the high growth Florida medical marijuana industry. Furthermore, Zuanic says Trulieve has a tremendous alternative to produce its businesses in other states, including Connecticut, Massachusetts, and California. Finally, 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 stock.
GW Pharmaceuticals (GWPH)
As opposed to the other cannabis stocks on this list, GW Pharmaceuticals is a biopharmaceutical business centered on creating cannabis based drug therapies. 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 the expectations of his. He also sees assorted bullish catalysts for GW through the conclusion of 2021, which includes further penetration into additional rollout and adult clientele in Europe. Cantor has an “overweight” rating and $165 price target for GWPH stock.