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 state marijuana legalization measures on the ballot have passed. Recreational and/or medical marijuana was legalized in Arizona, Mississippi, Montana, South Dakota and new Jersey, 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 limiting significant federal cannabis reform. Being a result, some cannabis stocks initially dropped following the election. Here are the very best cannabis stocks to purchase following the election, according to Cantor Fitzgerald.
Flower price depreciation has been an important issue for almost all Canadian licensed producers, or LPs. However, 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 might still be no less than two years away, but decriminalization of adult use marijuana and potential federal rescheduling of cannabis may boost Aphria and other Canadian LPs, Zuanic says. He states Aphria has several positive catalysts ahead in the near term, including an increase in 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 were fairly strong compared with other Canadian LPs. But, Hifyre cannabis sales data for October suggest OrganiGram sales had been down twenty five % month over month compared with a five % decline for the overall Canadian retail market. OrganiGram has disappointed investors with the sluggish revenue growth of its and cash burn up, but Zuanic is actually optimistic the business will see its way to growth and profitability in the long haul. Cantor Fitzgerald has an “overweight” rating and $4.07 cost 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 interest, taxes, depreciation and amortization expectations by almost 200 %. Zuanic says Cresco’s forty two % sequential sales development in the next quarter was the most effective growth rates with almost all of Cresco’s big MSO peers. Zuanic says the Illinois industry is going to be a serious near-term growth driver for Cresco, and the Origin House acquisition of its ought to supplement the natural growth of its. Cantor Fitzgerald has an “overweight” rating and sixteen dolars price target for CRLBF inventory.
Curaleaf is a U.S. MSO that operates in twenty three states. Among those states is actually New Jersey, which might represent the largest opportunity with the states which legalized recreational marijuana on Election Day. Not merely will Curaleaf benefit from the new Jersey market, but Zuanic says Curaleaf will likely draw clients from neighboring New York and Pennsylvania. Curaleaf reported impressive 142 % revenue growth as well as 180 % gross 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 inventory.
Green Thumb Industries (GTBIF)
Green Thumb Industries is a U.S. MSO which works in twelve states, including Florida as well as California. Zuanic states Green Thumb has the very best 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 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. Also, he 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 cost target for GTBIF inventory.
Trulieve Cannabis Corp. (TCNNF)
Trulieve Cannabis is an MSO that runs largely in Florida. Zuanic recently hosted a call with Trulieve CEO Kim Rivers. After speaking with Rivers, Zuanic says he is comfortable in Trulieve’s potential to keep a dominant market share of the high-growth Florida medical marijuana industry. In addition, Zuanic affirms Trulieve has a substantial opportunity to grow the businesses of its in some other states, like Connecticut, Massachusetts, and California. Last but not least, he is optimistic Florida voters could 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)
In contrast to the various other cannabis stocks on this list, GW Pharmaceuticals is actually a biopharmaceutical company centered on developing 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. Also, he sees several bullish catalysts for GW through the conclusion of 2021, including further penetration into more rollout and adult patients in Europe. Cantor has an “overweight” rating and $165 price target for GWPH stock.