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 all five state marijuana legalization measures on the ballot have passed. Fun and/or medical marijuana was legalized in Arizona, Mississippi, Montana, new Jersey and South Dakota, increasing the possible geographic footprint of cannabis multistate operators, or maybe MSOs. Unfortunately for cannabis investors, Democrats may not gain control of the Senate, potentially restricting significant federal cannabis reform. Being a result, some cannabis stocks initially dropped following the election. Allow me to share the best cannabis stocks to purchase following the election, as reported by Cantor Fitzgerald.
Flower price depreciation has been an important problem for almost all Canadian licensed producers, or maybe LPs. But, analyst Pablo Zuanic states Canadian LPs like Aphria may have “positive collateral benefits” from the U.S. election, assuming Joe Biden takes over the White House. Federal legalization may well still be a minimum of 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 says. He states Aphria has a number of positive catalysts ahead in the near term, including an increase of exports. Cantor Fitzgerald has an “overweight” rating and $8.95 cost target for APHA inventory.
Canadian LP OrganiGram has had a brutal year of 2020. Zuanic affirms OrganiGram’s retail sales trends in the third quarter had been relatively strong compared with other Canadian LPs. Nonetheless, Hifyre cannabis sales information for October recommend OrganiGram sales had been down 25 % month over month compared with a 5 % decline for the entire Canadian retail market. OrganiGram has disappointed investors with the sluggish revenue growth of its and cash burn, but Zuanic is actually optimistic the business will find its way to earnings and growth 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 as Cresco Labs are 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 about 200 %. Zuanic tells you Cresco’s forty two % sequential sales advancement in the second quarter was the most effective growth rates among all of Cresco’s large MSO peers. Zuanic states the Illinois industry will be a leading near-term growth driver for Cresco, and its Origin House acquisition should supplement its natural growth. Cantor Fitzgerald has an “overweight” rating and $16 price target for CRLBF stock.
Curaleaf is actually a U.S. MSO which operates in twenty three states. Among those states is New Jersey, which may represent probably the largest opportunity among the states that legalized recreational marijuana on Election Day. Not simply will Curaleaf benefit from the new Jersey market, but Zuanic says Curaleaf will probably draw customers from neighboring Pennsylvania and New York. Curaleaf reported amazing 142 % revenue growth and 180 % gross earnings growth year over year in the next quarter and holds a leadership position in key states. Cantor Fitzgerald has an “overweight” rating and eighteen dolars price target for CURLF inventory.
Green Thumb Industries (GTBIF)
Green Thumb Industries is a U.S. MSO that runs in twelve states, like California and Florida. Zuanic claims Green Thumb has the ideal risk profile of Cantor’s top-rated MSOs. Green Thumb has expanded the footprint of its in Pennsylvania and Illinois without overextending its balance sheet, it already has a sizable presence in New Zuanic and Jersey is actually projecting revenue will develop from $527 million in 2020 to $982 million by 2022. Also, he anticipates additional legalization in Pennsylvania, New York, Maryland and Connecticut 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 which 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 potential to maintain a dominant market share of the high-growth Florida medical marijuana industry. Additionally, Zuanic affirms Trulieve includes a substantial chance to produce the businesses of its in other states, including 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 $60 cost 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 creating cannabis based drug therapies. The company’s lead drug Epidiolex has been approved by the Food and 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 tail end of 2021, including further penetration into more rollout and adult patients in Europe. Cantor has an “overweight” rating and $165 cost target for GWPH inventory.