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 5 status marijuana legalization measures on the ballot have passed. Fun 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 might not gain control of the Senate, potentially restricting significant federal cannabis reform. As a result, some 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 price depreciation has been a major concern for all Canadian licensed producers, or perhaps LPs. But, analyst Pablo Zuanic says Canadian LPs like Aphria might have “positive collateral benefits” from the U.S. election, assuming Joe Biden takes over the White House. Federal legalization might still be at least 2 years away, but decriminalization of adult use marijuana and potential federal rescheduling of cannabis could boost Aphria as well as other Canadian LPs, Zuanic states. He states Aphria has several 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 in 2020. Zuanic says OrganiGram’s retail sales trends in the third quarter were fairly strong in comparison with other Canadian LPs. Nonetheless, Hifyre cannabis sales data for October recommend OrganiGram sales had been down 25 % month over month compared with a five % decline for the complete Canadian retail store. OrganiGram has disappointed investors with its sluggish revenue growth as well as money burn up, but Zuanic is optimistic the company may find the way of its to growth and earnings in the long run. Cantor Fitzgerald has an “overweight” rating and $4.07 cost target for OGI stock.
While Canadian cannabis stocks are actually struggling, U.S. multistate operators like Cresco Labs are thriving. In the second quarter, Cresco beat consensus analyst sales estimates by 30 % and exceeded the earnings of theirs before amortization expectations, depreciation, taxes, and interest by almost 200 %. Zuanic affirms Cresco’s forty two % sequential sales expansion in the second quarter was the very best growth rate with almost all of Cresco’s large MSO peers. Zuanic says the Illinois market is going to be a serious 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 sixteen dolars cost target for CRLBF inventory.
Curaleaf is a U.S. MSO which works in twenty three states. Among those states is actually New Jersey, that might represent probably the largest opportunity among the states that legalized recreational marijuana on Election Day. Not simply will Curaleaf benefit from the brand new Jersey market, but Zuanic says Curaleaf will probably draw clients from neighboring New York and Pennsylvania. Curaleaf noted amazing 142 % revenue growth as well as 180 % gross 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 $18 cost target for CURLF inventory.
Green Thumb Industries (GTBIF)
Green Thumb Industries is actually a U.S. MSO that runs in 12 states, like Florida as well as California. Zuanic says Green Thumb has the best risk profile of Cantor’s top rated MSOs. Green Thumb has expanded the footprint of its in Illinois and Pennsylvania without overextending the balance sheet of its, it already has a sizable presence in New Zuanic and Jersey is actually projecting revenue will grow from $527 million in 2020 to $982 million by 2022. Additionally, he anticipates additional legalization of Pennsylvania, New York, Connecticut as well as Maryland in coming years. Cantor Fitzgerald has an “overweight” rating and $29 price 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’s comfortable in Trulieve’s potential to maintain a dominant market share of the high-growth Florida medical marijuana industry. Furthermore, Zuanic affirms Trulieve has a tremendous chance to produce the companies of its in other states, like Connecticut, Massachusetts, and California. Lastly, he is optimistic Florida voters could legalize recreational marijuana in the 2022 midterm election. Cantor Fitzgerald has an “overweight” rating and $60 price target for TCNNF stock.
GW Pharmaceuticals (GWPH)
Unlike 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 therapy of pediatric epilepsy. Cantor analyst Charles Duncan says GW’s third-quarter Epidiolex sales exceeded his expectations. Also, he sees assorted bullish catalysts for GW through the tail end of 2021, including further penetration into adult customers and more rollout in Europe. Cantor has an “overweight” rating and $165 cost target for GWPH stock.