The election results are actually bullish for marijuana stocks.
Cannabis stock investors did not get the blue wave they were hoping for in the U.S. election, but all five state marijuana legalization methods 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 might not gain control of the Senate, possibly restricting considerable federal cannabis reform. Being a result, a few cannabis stocks initially dropped following the election. Allow me to share the very best cannabis stocks to invest in following the election, as reported by Cantor Fitzgerald.
Flower priced depreciation continues to be a significant issue for almost all Canadian licensed producers, or LPs. Nonetheless, analyst Pablo Zuanic reveals Canadian LPs as Aphria might have “positive collateral benefits” from the U.S. election, assuming Joe Biden takes more than the White House. Federal legalization may well still be a minimum of two years away, but decriminalization of adult use marijuana and potential federal rescheduling of cannabis could raise Aphria as well as other Canadian LPs, Zuanic says. He says Aphria has several positive catalysts ahead in the near term, including a surge in exports. Cantor Fitzgerald has an “overweight” rating and $8.95 price 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 fairly strong in comparison with other Canadian LPs. However, Hifyre cannabis sales information for October suggest OrganiGram sales had been down 25 % month over month in contrast to a five % decline for the complete Canadian retail market. OrganiGram has disappointed investors with its sluggish revenue growth as well as money burn, but Zuanic is hopeful the business will find the way of its to profitability and growth 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 second quarter, Cresco beat consensus analyst sales estimates by thirty % and exceeded their earnings before interest, taxes, depreciation and amortization expectations by almost 200 %. Zuanic tells you Cresco’s 42 % sequential sales advancement in the next quarter was the best growth rates among all of Cresco’s large MSO peers. Zuanic says the Illinois market is going to be a major 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 actually a U.S. MSO which operates in 23 states. Among those states is New Jersey, which may represent the largest opportunity with the states that legalized recreational marijuana on Election Day. Not only will Curaleaf benefit from the new Jersey sector, but Zuanic says Curaleaf will probably draw clients from neighboring New York and Pennsylvania. Curaleaf reported amazing 142 % revenue growth as well as 180 % disgusting profit growth year over year in the next quarter and also holds a leadership position in key states. Cantor Fitzgerald has an “overweight” rating and eighteen dolars price target for CURLF stock.
Green Thumb Industries (GTBIF)
Green Thumb Industries is a U.S. MSO which operates in 12 states, like Florida and California. Zuanic says Green Thumb has the ideal 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 mature from $527 million in 2020 to $982 million by 2022. Also, he anticipates further legalization in Pennsylvania, New York, Connecticut and 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 talking with Rivers, Zuanic says he is comfortable in Trulieve’s capacity to maintain a dominant market share of the high-growth Florida medical marijuana market. Moreover, Zuanic says Trulieve has a substantial alternative to produce its businesses in other states, including California, Massachusetts and Connecticut. Finally, he is optimistic Florida voters can legalize recreational marijuana in the 2022 midterm election. Cantor Fitzgerald has an “overweight” rating and sixty dolars price target for TCNNF stock.
GW Pharmaceuticals (GWPH)
As opposed to the 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 therapy of pediatric epilepsy. Cantor analyst Charles Duncan says GW’s third quarter Epidiolex sales exceeded the expectations of his. He also sees several bullish catalysts for GW through the conclusion of 2021, including further penetration into adult clients and additional rollout in Europe. Cantor has an “overweight” rating and $165 price target for GWPH inventory.