The election results are 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. 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 perhaps MSOs. Unfortunately for cannabis investors, Democrats may not gain control of the Senate, possibly limiting considerable federal cannabis reform. As a result, a few cannabis stocks initially dropped following the election. Allow me to share the best cannabis stocks to invest in following the election, based on Cantor Fitzgerald.
Flower priced depreciation has long been a significant concern for all Canadian licensed producers, or LPs. However, analyst Pablo Zuanic reveals Canadian LPs like Aphria may have “positive collateral benefits” from the U.S. election, assuming Joe Biden takes over 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 can boost Aphria as well as other Canadian LPs, Zuanic says. He states Aphria has multiple positive catalysts forward in the near term, including a surge of 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 contrast to other Canadian LPs. However, Hifyre cannabis sales information for October suggest OrganiGram sales were down twenty five % month over month compared with a five % decline for the overall Canadian retail store. OrganiGram has disappointed investors with the sluggish revenue growth of its as well as money burn up, but Zuanic is hopeful the business will find its way to profits and growth in the long term. Cantor Fitzgerald has an “overweight” rating and $4.07 price target for OGI inventory.
While Canadian cannabis stocks are actually struggling, U.S. multistate operators as Cresco Labs are thriving. In the second quarter, Cresco beat consensus analyst sales estimates by thirty % and exceeded their earnings before amortization expectations, depreciation, taxes, and interest by almost 200 %. Zuanic tells you Cresco’s forty two % sequential sales advancement in the second quarter was the top growth rates with many of Cresco’s large MSO peers. Zuanic alleges the Illinois market will be a major near term growth driver for Cresco, and the Origin House acquisition of its should supplement the natural growth of its. Cantor Fitzgerald has an “overweight” rating and sixteen dolars price target for CRLBF stock.
Curaleaf is actually a U.S. MSO which works in twenty three states. Among those states is actually New Jersey, which might represent probably the largest opportunity with the states that legalized recreational marijuana on Election Day. Not only will Curaleaf benefit from the brand new Jersey market, but Zuanic says Curaleaf will likely draw clients from neighboring Pennsylvania and New York. Curaleaf reported amazing 142 % revenue growth and 180 % disgusting 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 stock.
Green Thumb Industries (GTBIF)
Green Thumb Industries is a U.S. MSO which runs in 12 states, including California as well as Florida. 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 Zuanic and Jersey is actually projecting revenue will mature from $527 million in 2020 to $982 million by 2022. Also, he anticipates additional legalization of Pennsylvania, New York, Connecticut and 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 runs primarily in Florida. Zuanic recently hosted a call with Trulieve CEO Kim Rivers. After talking with Rivers, Zuanic says he’s comfortable in Trulieve’s capacity to maintain a dominant market share of the high growth Florida medical marijuana market. Additionally, Zuanic says Trulieve has a tremendous opportunity to produce its companies in some other states, like California, Massachusetts and Connecticut. Last but not least, he is optimistic Florida voters can legalize recreational marijuana in the 2022 midterm election. Cantor Fitzgerald has an “overweight” rating and $60 price target for TCNNF inventory.
GW Pharmaceuticals (GWPH)
Unlike the various other cannabis stocks on this list, GW Pharmaceuticals is a biopharmaceutical business focused on developing cannabis-based drug treatments. 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 states GW’s third-quarter Epidiolex sales exceeded his expectations. He also sees several bullish catalysts for GW through the conclusion of 2021, including further penetration into adult people and more rollout in Europe. Cantor has an “overweight” rating and $165 cost target for GWPH stock.