The election results are bullish for marijuana stocks.
Cannabis stock investors didn’t get the blue wave they were hoping for in the U.S. election, but just five status 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 possible geographic footprint of cannabis multistate operators, or MSOs. Unfortunately for cannabis investors, Democrats may not gain control of the Senate, potentially limiting significant federal cannabis reform. To be a result, a few cannabis stocks initially dropped following the election. Allow me to share the best cannabis stocks to purchase following the election, based on Cantor Fitzgerald.
Flower price depreciation continues to be an important concern for all Canadian licensed producers, or maybe LPs. Nevertheless, analyst Pablo Zuanic states 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 might still be a minimum of two years away, but decriminalization of adult-use marijuana and potential federal rescheduling of cannabis may raise Aphria along with other Canadian LPs, Zuanic says. He says Aphria has multiple positive catalysts ahead in the near term, including a surge 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 were relatively strong in comparison with other Canadian LPs. Nevertheless, Hifyre cannabis sales data for October recommend OrganiGram sales were down twenty five % month over month compared with a five % decline for the complete Canadian retail market. OrganiGram has disappointed investors with the sluggish revenue growth of its as well as cash burn up, but Zuanic is actually hopeful the company may find the way of its to profits and growth in the long term. Cantor Fitzgerald has an “overweight” rating and $4.07 cost target for OGI inventory.
While Canadian cannabis stocks are struggling, U.S. multistate operators as Cresco Labs are actually thriving. In the next quarter, Cresco beat consensus analyst sales estimates by 30 % and exceeded the earnings of theirs before interest, taxes, depreciation and amortization expectations by almost 200 %. Zuanic affirms Cresco’s 42 % sequential sales progress in the second quarter was the top growth rate among all of Cresco’s big MSO peers. Zuanic states the Illinois market will be a major near-term growth driver for Cresco, and the Origin House acquisition of its should supplement its natural growth. Cantor Fitzgerald has an “overweight” rating and $16 cost target for CRLBF inventory.
Curaleaf is a U.S. MSO which operates in 23 states. Among those states is actually New Jersey, which may represent probably the largest opportunity among 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 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 cost target for CURLF inventory.
Green Thumb Industries (GTBIF)
Green Thumb Industries is a U.S. MSO which runs in 12 states, like Florida as well as California. Zuanic claims 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 the balance sheet of its, it already has a sizable presence in New Jersey and Zuanic is projecting revenue will grow from $527 million in 2020 to $982 million by 2022. Also, he anticipates further legalization of Pennsylvania, New York, Maryland as well as Connecticut in coming years. Cantor Fitzgerald has an “overweight” rating and twenty nine dolars cost target for GTBIF stock.
Trulieve Cannabis Corp. (TCNNF)
Trulieve Cannabis is an MSO which operates largely 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 keep a dominant market share of the high growth Florida medical marijuana market. Additionally, Zuanic affirms Trulieve includes a substantial opportunity to grow its businesses in other states, including California, Massachusetts and Connecticut. Lastly, he’s upbeat Florida voters can legalize recreational marijuana in the 2022 midterm election. Cantor Fitzgerald has an “overweight” rating and sixty dolars cost target for TCNNF stock.
GW Pharmaceuticals (GWPH)
Unlike the various other cannabis stocks on this list, GW Pharmaceuticals is actually a biopharmaceutical business centered on developing cannabis-based drug therapies. 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 with the end of 2021, which includes further penetration into adult patients and additional rollout in Europe. Cantor has an “overweight” rating and $165 cost target for GWPH stock.