The election results are actually bullish for marijuana stocks.
Cannabis stock investors did not get the blue wave these were hoping for in the U.S. election, but all five state 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 possible geographic footprint of cannabis multistate operators, or perhaps MSOs. Unfortunately for cannabis investors, Democrats might not gain control of the Senate, possibly restricting significant federal cannabis reform. Being a result, some cannabis stocks initially dropped following the election. Here are the best cannabis stocks to purchase following the election, according to Cantor Fitzgerald.
Flower price depreciation has been an important problem for just about all Canadian licensed producers, or maybe LPs. But, analyst Pablo Zuanic says Canadian LPs like Aphria could have “positive collateral benefits” from the U.S. election, assuming Joe Biden takes more than the White House. Federal legalization may still be at least 2 years away, but decriminalization of adult-use marijuana and potential federal rescheduling of cannabis could increase Aphria as well as other Canadian LPs, Zuanic states. He says Aphria has several positive catalysts in front in the near term, including an increase in 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 tells you OrganiGram’s retail sales trends in the third quarter had been fairly strong compared with other Canadian LPs. However, Hifyre cannabis sales information for October suggest OrganiGram sales were 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 as well as money burn up, but Zuanic is actually hopeful the business will find its way to profitability and growth in the long haul. 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 as Cresco Labs are actually 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 nearly 200 %. Zuanic affirms Cresco’s 42 % sequential sales expansion in the second quarter was the most effective growth rates among almost all of Cresco’s big MSO peers. Zuanic alleges the Illinois industry will be a serious near term growth driver for Cresco, and the Origin House acquisition of its ought to supplement its natural growth. Cantor Fitzgerald has an “overweight” rating and sixteen dolars cost target for CRLBF stock.
Curaleaf is actually a U.S. MSO that works in twenty three states. Among those states is New Jersey, which might represent the largest opportunity among the states that legalized recreational marijuana on Election Day. Not only will Curaleaf gain from the new Jersey market, but Zuanic says Curaleaf may draw clients from neighboring Pennsylvania and New York. Curaleaf reported astounding 142 % revenue growth as well as 180 % gross earnings 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 operates in 12 states, like California as well as Florida. Zuanic states Green Thumb has the ideal risk profile of Cantor’s top-rated MSOs. Green Thumb has expanded its footprint in Illinois and Pennsylvania without overextending its balance sheet, it already has a sizable presence in New Jersey and Zuanic is actually projecting revenue will grow from $527 million in 2020 to $982 million by 2022. He also anticipates further legalization of Pennsylvania, New York, Maryland as well as Connecticut in coming years. Cantor Fitzgerald has an “overweight” rating and $29 cost target for GTBIF stock.
Trulieve Cannabis Corp. (TCNNF)
Trulieve Cannabis is an MSO that operates primarily in Florida. Zuanic recently hosted a call with Trulieve CEO Kim Rivers. After speaking with Rivers, Zuanic says he’s confident in Trulieve’s ability to maintain a dominant market share of the high-growth Florida medical marijuana market. Furthermore, Zuanic says Trulieve features a substantial chance to grow the companies of its in other states, like California, Massachusetts and Connecticut. Lastly, he’s 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)
As opposed to the other cannabis stocks on this list, GW Pharmaceuticals is a biopharmaceutical business focused 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. He also sees several bullish catalysts for GW through the end of 2021, which includes further penetration into additional rollout and adult customers in Europe. Cantor has an “overweight” rating and $165 cost target for GWPH inventory.