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 just five status marijuana legalization measures 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 MSOs. Unfortunately for cannabis investors, Democrats might not gain control of the Senate, potentially restricting significant federal cannabis reform. Being a result, some cannabis stocks initially dropped following the election. Here are the very best cannabis stocks to invest in following the election, based on Cantor Fitzgerald.
Flower priced depreciation has been a big problem for all Canadian licensed producers, or LPs. However, analyst Pablo Zuanic states Canadian LPs as Aphria might 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 as well as other Canadian LPs, Zuanic states. He says Aphria has multiple positive catalysts forward in the near term, including an increase in exports. Cantor Fitzgerald has an “overweight” rating and $8.95 cost target for APHA stock.
Canadian LP OrganiGram has had a brutal year in 2020. Zuanic tells you OrganiGram’s retail sales trends in the third quarter were relatively strong in comparison with various other Canadian LPs. But, Hifyre cannabis sales data for October suggest OrganiGram sales had been down 25 % month over month compared with a five % decline for the overall Canadian retail market. OrganiGram has disappointed investors with the sluggish revenue growth of its as well as cash burn, but Zuanic is hopeful the company will see the way of its to growth and profits in the long term. 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 next quarter, Cresco beat consensus analyst sales estimates by thirty % and exceeded their earnings before amortization expectations, depreciation, taxes, and interest by about 200 %. Zuanic says Cresco’s 42 % sequential sales advancement in the next quarter was the very best growth rate among almost all of Cresco’s big MSO peers. Zuanic alleges the Illinois market will be a serious near term growth driver for Cresco, and its Origin House acquisition ought to supplement its organic growth. Cantor Fitzgerald has an “overweight” rating and sixteen dolars price target for CRLBF inventory.
Curaleaf is actually a U.S. MSO that runs in 23 states. Among those states is New Jersey, that might represent probably the largest opportunity among the states that legalized recreational marijuana on Election Day. Not only will Curaleaf gain from the brand new Jersey market, but Zuanic says Curaleaf will likely draw clients from neighboring New York and Pennsylvania. Curaleaf reported amazing 142 % revenue growth as well as 180 % gross earnings 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 inventory.
Green Thumb Industries (GTBIF)
Green Thumb Industries is actually a U.S. MSO which runs in twelve states, like Florida as well as California. Zuanic reveals Green Thumb has the best risk profile of Cantor’s top-rated MSOs. Green Thumb has expanded the footprint of its 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 develop from $527 million in 2020 to $982 million by 2022. Additionally, 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 stock.
Trulieve Cannabis Corp. (TCNNF)
Trulieve Cannabis is actually an MSO which works largely in Florida. Zuanic recently hosted a call with Trulieve CEO Kim Rivers. After talking with Rivers, Zuanic says he is confident in Trulieve’s capacity to maintain a dominant market share of the high-growth Florida medical marijuana industry. In addition, Zuanic affirms Trulieve includes a tremendous alternative to produce its companies in other states, including Connecticut, Massachusetts, and California. Finally, he’s upbeat Florida voters could legalize recreational marijuana in the 2022 midterm election. Cantor Fitzgerald has an “overweight” rating and $60 cost target for TCNNF stock.
GW Pharmaceuticals (GWPH)
In contrast to the various other cannabis stocks on this list, GW Pharmaceuticals is actually a biopharmaceutical business 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 with the end of 2021, which includes further penetration into more rollout and adult customers in Europe. Cantor has an “overweight” rating and $165 price target for GWPH inventory.