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 just five state marijuana legalization measures on the ballot have passed. Recreational 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 maybe MSOs. Unfortunately for cannabis investors, Democrats may not gain control of the Senate, potentially limiting considerable federal cannabis reform. To be a result, a few cannabis stocks initially dropped following the election. Here are the very best cannabis stocks to invest in following the election, as reported by Cantor Fitzgerald.
Flower price depreciation continues to be a major issue for just about all Canadian licensed producers, or LPs. But, analyst Pablo Zuanic states Canadian LPs as Aphria may have “positive collateral benefits” from the U.S. election, assuming Joe Biden takes more than the White House. Federal legalization may well still be at least two years away, but decriminalization of adult use marijuana and potential federal rescheduling of cannabis can increase Aphria and other Canadian LPs, Zuanic states. He states Aphria has several positive catalysts in front in the near term, including a rise 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 compared with other Canadian LPs. Nevertheless, Hifyre cannabis sales data for October recommend OrganiGram sales had been down 25 % month over month in contrast to a five % decline for the entire Canadian retail market. OrganiGram has disappointed investors with the sluggish revenue growth of its and money burn up, but Zuanic is actually hopeful the small business may find the way of its to profits 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 like Cresco Labs are thriving. In the next quarter, Cresco beat consensus analyst sales estimates by 30 % and exceeded their earnings before amortization expectations, depreciation, taxes, and interest by about 200 %. Zuanic affirms Cresco’s 42 % sequential sales expansion in the second quarter was the best growth rates with almost all of Cresco’s large MSO peers. Zuanic alleges the Illinois industry will be a leading 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 $16 price target for CRLBF stock.
Curaleaf is a U.S. MSO that works in 23 states. Among those states is New Jersey, which may represent probably the largest opportunity with the states which legalized recreational marijuana on Election Day. Not merely will Curaleaf gain from the brand new Jersey sector, but Zuanic says Curaleaf may draw clients from neighboring Pennsylvania and New York. Curaleaf noted impressive 142 % revenue growth and 180 % gross profit development year over year in the second quarter and 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 a U.S. MSO which operates in 12 states, like California as well as Florida. Zuanic claims Green Thumb has the ideal risk profile of Cantor’s top rated MSOs. Green Thumb has expanded its footprint in Pennsylvania and Illinois without overextending its balance sheet, it currently has a sizable presence in New Jersey and Zuanic is actually projecting revenue will develop 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 cost target for GTBIF inventory.
Trulieve Cannabis Corp. (TCNNF)
Trulieve Cannabis is actually an MSO which 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 industry. In addition, Zuanic affirms Trulieve has a substantial alternative to grow its businesses in other states, like California, Massachusetts and Connecticut. Lastly, he’s optimistic Florida voters might legalize recreational marijuana in the 2022 midterm election. Cantor Fitzgerald has an “overweight” rating and sixty dolars cost target for TCNNF inventory.
GW Pharmaceuticals (GWPH)
Unlike the various other cannabis stocks on this list, GW Pharmaceuticals is a biopharmaceutical business centered on developing 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 the expectations of his. He also sees several bullish catalysts for GW through the tail end of 2021, which includes further penetration into additional rollout and adult individuals in Europe. Cantor has an “overweight” rating and $165 price target for GWPH inventory.