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 all 5 state marijuana legalization methods 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 maybe MSOs. Unfortunately for cannabis investors, Democrats might not gain control of the Senate, possibly limiting significant federal cannabis reform. As a result, some cannabis stocks initially dropped following the election. Here are the best cannabis stocks to invest in following the election, according to Cantor Fitzgerald.
Flower priced depreciation has long been a major concern for just about all Canadian licensed producers, or LPs. Nonetheless, analyst Pablo Zuanic claims Canadian LPs like Aphria may have “positive collateral benefits” from the U.S. election, assuming Joe Biden takes more than the White House. Federal legalization might still be at least 2 years away, but decriminalization of adult use marijuana and potential federal rescheduling of cannabis can increase Aphria as well as other Canadian LPs, Zuanic says. He states Aphria has several positive catalysts in front 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 in 2020. Zuanic affirms OrganiGram’s retail sales trends in the third quarter were relatively strong compared with other Canadian LPs. However, Hifyre cannabis sales information for October recommend OrganiGram sales were down twenty five % month over month compared with a 5 % decline for the complete Canadian retail store. OrganiGram has disappointed investors with the sluggish revenue growth of its as well as money burn up, but Zuanic is actually optimistic the small business may find the way of its to growth and profitability in the long term. Cantor Fitzgerald has an “overweight” rating and $4.07 cost 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 the earnings of theirs before interest, taxes, depreciation and amortization expectations by almost 200 %. Zuanic affirms Cresco’s forty two % sequential sales expansion in the second quarter was the best growth rate among many of Cresco’s big MSO peers. Zuanic states the Illinois industry will be a serious near term growth driver for Cresco, and the Origin House acquisition of its should supplement its organic growth. Cantor Fitzgerald has an “overweight” rating and $16 price target for CRLBF stock.
Curaleaf is a U.S. MSO that runs in twenty three states. Among those states is actually New Jersey, that might represent probably the largest opportunity with the states that legalized recreational marijuana on Election Day. Not simply will Curaleaf gain from the new Jersey market, but Zuanic says Curaleaf may draw customers from neighboring New York and Pennsylvania. Curaleaf reported amazing 142 % revenue growth as well as 180 % gross earnings development year over year in the next quarter and also holds a leadership position in key states. Cantor Fitzgerald has an “overweight” rating and $18 cost target for CURLF inventory.
Green Thumb Industries (GTBIF)
Green Thumb Industries is a U.S. MSO which runs in 12 states, like Florida and California. Zuanic claims Green Thumb has the ideal risk profile of Cantor’s top-rated MSOs. Green Thumb has expanded the footprint of its in Pennsylvania and Illinois without overextending the balance sheet of its, it currently has a sizable presence in New Zuanic and Jersey is actually projecting revenue will develop from $527 million in 2020 to $982 million by 2022. Additionally, he anticipates further legalization of Pennsylvania, New York, Maryland and Connecticut in coming years. Cantor Fitzgerald has an “overweight” rating and $29 price target for GTBIF inventory.
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 talking with Rivers, Zuanic says he is confident in Trulieve’s potential to maintain a dominant market share of the high-growth Florida medical marijuana market. Furthermore, Zuanic says Trulieve has a substantial chance to produce its businesses in other states, including California, Massachusetts and Connecticut. Last but not least, 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 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 says GW’s third-quarter Epidiolex sales exceeded his expectations. Also, he sees several bullish catalysts for GW with the tail end of 2021, which includes further penetration into additional rollout and adult clientele in Europe. Cantor has an “overweight” rating and $165 cost target for GWPH stock.