The election results are actually bullish for marijuana stocks.
Cannabis stock investors did not get the blue wave they were hoping for in the U.S. election, but all 5 state marijuana legalization procedures 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, possibly restricting significant 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 price depreciation has long been a major problem for all Canadian licensed producers, or 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 no less than 2 years away, but decriminalization of adult-use marijuana and potential federal rescheduling of cannabis may increase Aphria as well as other Canadian LPs, Zuanic states. He claims Aphria has a number of positive catalysts forward in the near term, including a rise of exports. Cantor Fitzgerald has an “overweight” rating and $8.95 price target for APHA inventory.
Canadian LP OrganiGram has had a brutal year of 2020. Zuanic says OrganiGram’s retail sales trends in the third quarter had been relatively strong in contrast to other Canadian LPs. Nevertheless, Hifyre cannabis sales data for October recommend OrganiGram sales were down 25 % month over month in contrast to a 5 % decline for the entire Canadian retail market. OrganiGram has disappointed investors with the sluggish revenue growth of its and cash burn up, but Zuanic is optimistic the business may find the way of its to profitability and growth in the long haul. Cantor Fitzgerald has an “overweight” rating and $4.07 price target for OGI stock.
While Canadian cannabis stocks are struggling, U.S. multistate operators like 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 almost 200 %. Zuanic affirms Cresco’s 42 % sequential sales progress in the second quarter was the best growth rates with many of Cresco’s large MSO peers. Zuanic says the Illinois market is going to be a leading near term growth driver for Cresco, and its Origin House acquisition ought to supplement its organic growth. Cantor Fitzgerald has an “overweight” rating and $16 cost target for CRLBF inventory.
Curaleaf is a U.S. MSO which operates in twenty three states. Among those states is actually New Jersey, that might represent probably the largest opportunity among the states which legalized recreational marijuana on Election Day. Not only will Curaleaf gain from the brand new Jersey sector, but Zuanic says Curaleaf will probably draw clients from neighboring Pennsylvania and New York. Curaleaf noted astounding 142 % revenue growth and 180 % disgusting profit development year over year in the second quarter and holds a leadership position in key states. Cantor Fitzgerald has an “overweight” rating and eighteen dolars cost target for CURLF stock.
Green Thumb Industries (GTBIF)
Green Thumb Industries is actually a U.S. MSO that operates in 12 states, like California and Florida. Zuanic claims Green Thumb has the best risk profile of Cantor’s top-rated MSOs. Green Thumb has expanded its footprint in Pennsylvania and Illinois 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 additional legalization in Pennsylvania, New York, Maryland and Connecticut in coming years. Cantor Fitzgerald has an “overweight” rating and twenty nine dolars price target for GTBIF inventory.
Trulieve Cannabis Corp. (TCNNF)
Trulieve Cannabis is actually an MSO that runs largely in Florida. Zuanic recently hosted a call with Trulieve CEO Kim Rivers. After speaking with Rivers, Zuanic says he is confident in Trulieve’s ability to keep a dominant market share of the high growth Florida medical marijuana market. Furthermore, Zuanic says Trulieve has a significant alternative to grow its companies in some other states, including Connecticut, Massachusetts, and California. Last but not least, he’s upbeat Florida voters could 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)
As opposed to the various other cannabis stocks on this list, GW Pharmaceuticals is a biopharmaceutical business focused 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 states GW’s third quarter Epidiolex sales exceeded the expectations of his. He also sees assorted bullish catalysts for GW with the end of 2021, which includes further penetration into more rollout and adult patients in Europe. Cantor has an “overweight” rating and $165 price target for GWPH inventory.