The election results are actually 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 measures on the ballot have passed. Recreational 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. 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, according to Cantor Fitzgerald.
Flower price depreciation continues to be a major problem for just about all Canadian licensed producers, or maybe LPs. But, analyst Pablo Zuanic says Canadian LPs like Aphria might have “positive collateral benefits” from the U.S. election, assuming Joe Biden takes over the White House. Federal legalization might still be at least two years away, but decriminalization of adult-use marijuana and potential federal rescheduling of cannabis could raise Aphria and other Canadian LPs, Zuanic says. He says Aphria has several positive catalysts forward in the near term, including a surge in 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 fairly strong compared with other Canadian LPs. Nevertheless, Hifyre cannabis sales information for October suggest OrganiGram sales were down twenty five % month over month in contrast to a five % decline for the overall Canadian retail store. OrganiGram has disappointed investors with its sluggish revenue growth as well as cash burn, but Zuanic is hopeful the small business may find its way to growth and earnings in the long run. 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 like Cresco Labs are thriving. In the next quarter, Cresco beat consensus analyst sales estimates by 30 % and exceeded the earnings of theirs before amortization expectations, depreciation, taxes, and interest by almost 200 %. Zuanic tells you Cresco’s 42 % sequential sales development in the second quarter was the very best growth rates among many of Cresco’s big MSO peers. Zuanic alleges the Illinois industry will be a leading near term growth driver for Cresco, and its Origin House acquisition should supplement the natural growth of its. Cantor Fitzgerald has an “overweight” rating and sixteen dolars cost target for CRLBF stock.
Curaleaf is a U.S. MSO which operates in 23 states. Among those states is New Jersey, which may represent probably the largest opportunity among the states which legalized recreational marijuana on Election Day. Not merely will Curaleaf gain from the new Jersey market, but Zuanic says Curaleaf may draw clients from neighboring Pennsylvania and New York. Curaleaf noted impressive 142 % revenue growth as well as 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 $18 price target for CURLF inventory.
Green Thumb Industries (GTBIF)
Green Thumb Industries is a U.S. MSO that works in twelve states, like California as well as Florida. Zuanic says Green Thumb has the ideal risk profile of Cantor’s top-rated MSOs. Green Thumb has expanded the footprint of its in Illinois and Pennsylvania 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. Also, he anticipates additional legalization of Pennsylvania, New York, Maryland as well as 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 an MSO that runs 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 maintain a dominant market share of the high-growth Florida medical marijuana industry. In addition, Zuanic says Trulieve features a significant opportunity to produce its businesses in some other states, including California, Massachusetts and Connecticut. Finally, he is optimistic Florida voters might legalize recreational marijuana in the 2022 midterm election. Cantor Fitzgerald has an “overweight” rating and $60 price target for TCNNF inventory.
GW Pharmaceuticals (GWPH)
In contrast to the other cannabis stocks on this list, GW Pharmaceuticals is actually a biopharmaceutical company centered on developing 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 the expectations of his. Also, he sees assorted bullish catalysts for GW through the conclusion of 2021, which includes further penetration into more rollout and adult people in Europe. Cantor has an “overweight” rating and $165 price target for GWPH inventory.