The election results are bullish for marijuana stocks.
Cannabis stock investors didn’t get the blue wave these were hoping for in the U.S. election, but all five status marijuana legalization procedures on the ballot have passed. Recreational 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 maybe MSOs. Unfortunately for cannabis investors, Democrats might not gain control of the Senate, possibly limiting considerable 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 price depreciation has long been a major concern for just about all Canadian licensed producers, or perhaps LPs. Nonetheless, analyst Pablo Zuanic claims Canadian LPs as Aphria may have “positive collateral benefits” from the U.S. election, assuming Joe Biden takes over the White House. Federal legalization may well still be at least 2 years away, but decriminalization of adult-use marijuana and potential federal rescheduling of cannabis can increase Aphria along with other Canadian LPs, Zuanic says. He states 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 cost target for APHA inventory.
Canadian LP OrganiGram has had a brutal year in 2020. Zuanic affirms OrganiGram’s retail sales trends in the third quarter had been relatively strong in contrast to various other Canadian LPs. However, Hifyre cannabis sales data for October suggest OrganiGram sales were down twenty five % month over month in contrast to a 5 % decline for the overall Canadian retail market. OrganiGram has disappointed investors with the sluggish revenue growth of its and cash burn, but Zuanic is actually optimistic the company will find its way to profitability and growth in the long run. Cantor Fitzgerald has an “overweight” rating and $4.07 price target for OGI inventory.
While Canadian cannabis stocks are struggling, U.S. multistate operators like Cresco Labs are actually 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 almost 200 %. Zuanic affirms Cresco’s forty two % sequential sales expansion in the next quarter was the top growth rate with many of Cresco’s big MSO peers. Zuanic states the Illinois market will be a major near term growth driver for Cresco, and its Origin House acquisition should supplement its organic growth. Cantor Fitzgerald has an “overweight” rating and $16 cost target for CRLBF inventory.
Curaleaf is a U.S. MSO which runs in 23 states. Among those states is actually New Jersey, which might represent the largest opportunity among the states which legalized recreational marijuana on Election Day. Not simply will Curaleaf gain from the brand new Jersey market, but Zuanic says Curaleaf may draw clients from neighboring New York and Pennsylvania. Curaleaf noted astounding 142 % revenue growth and 180 % disgusting earnings 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 operates in twelve states, including 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 the balance sheet of its, it already has a sizable presence in New Jersey and Zuanic is projecting revenue will mature from $527 million in 2020 to $982 million by 2022. Also, he anticipates additional legalization in Pennsylvania, New York, Connecticut as well as Maryland 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 which 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 capacity to maintain a dominant market share of the high growth Florida medical marijuana industry. Moreover, Zuanic says Trulieve has a substantial alternative to produce its businesses in other states, including California, Massachusetts and Connecticut. Lastly, he is optimistic Florida voters could legalize recreational marijuana in the 2022 midterm election. Cantor Fitzgerald has an “overweight” rating and sixty dolars price target for TCNNF inventory.
GW Pharmaceuticals (GWPH)
As opposed to the other cannabis stocks on this list, GW Pharmaceuticals is actually a biopharmaceutical company 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 the expectations of his. Also, he sees assorted bullish catalysts for GW with the tail end of 2021, which includes further penetration into adult customers and more rollout in Europe. Cantor has an “overweight” rating and $165 price target for GWPH stock.