The election results are actually 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 procedures on the ballot have passed. Fun 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 restricting considerable federal cannabis reform. To be 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 long been a significant issue for just about all Canadian licensed producers, or maybe LPs. Nevertheless, analyst Pablo Zuanic states 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 no less than 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 states. He states 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 relatively strong in comparison with various other Canadian LPs. Nevertheless, Hifyre cannabis sales information for October suggest OrganiGram sales were down 25 % month over month in contrast to a 5 % decline for the overall Canadian retail market. OrganiGram has disappointed investors with the sluggish revenue growth of its and money burn, but Zuanic is actually optimistic the small business will 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 struggling, U.S. multistate operators like Cresco Labs are actually 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 about 200 %. Zuanic says Cresco’s forty two % sequential sales progress in the second quarter was the very best growth rates with many of Cresco’s big MSO peers. Zuanic says the Illinois market will be a leading near term growth driver for Cresco, and its Origin House acquisition ought to supplement its organic growth. Cantor Fitzgerald has an “overweight” rating and $16 price target for CRLBF stock.
Curaleaf is actually a U.S. MSO that works in 23 states. Among those states is New Jersey, that might represent probably 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 customers from neighboring New York and Pennsylvania. Curaleaf noted astounding 142 % revenue growth and 180 % gross earnings growth year over year in the second quarter and also 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 which works in twelve states, including California as well as Florida. Zuanic says 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 already has a sizable presence in New Jersey and Zuanic is projecting revenue will develop from $527 million in 2020 to $982 million by 2022. He also anticipates further legalization in Pennsylvania, New York, Connecticut as well as Maryland in coming years. Cantor Fitzgerald has an “overweight” rating and $29 cost target for GTBIF stock.
Trulieve Cannabis Corp. (TCNNF)
Trulieve Cannabis is actually an MSO that operates primarily in Florida. Zuanic recently hosted a call with Trulieve CEO Kim Rivers. After speaking with Rivers, Zuanic says he is comfortable in Trulieve’s capacity to keep a dominant market share of the high growth Florida medical marijuana industry. In addition, Zuanic says Trulieve features a significant opportunity to grow its businesses in other states, like California, Massachusetts and Connecticut. 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)
In contrast to the various other cannabis stocks on this list, GW Pharmaceuticals is actually a biopharmaceutical business centered on creating cannabis based drug therapies. The company’s lead drug Epidiolex has been approved by the Food and Drug Administration for the treatment 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 with the tail end of 2021, which includes further penetration into additional rollout and adult clients in Europe. Cantor has an “overweight” rating and $165 price target for GWPH inventory.