The election results are bullish for marijuana stocks.
Cannabis stock investors did not get the blue wave these were hoping for in the U.S. election, but just five state marijuana legalization procedures 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 may not gain control of the Senate, potentially limiting considerable federal cannabis reform. As a result, a few cannabis stocks initially dropped following the election. Here are the best cannabis stocks to purchase following the election, based on Cantor Fitzgerald.
Flower price depreciation continues to be a significant issue for almost all Canadian licensed producers, or LPs. However, analyst Pablo Zuanic says Canadian LPs like Aphria could have “positive collateral benefits” from the U.S. election, assuming Joe Biden takes over the White House. Federal legalization might still be a minimum of two years away, but decriminalization of adult-use marijuana and potential federal rescheduling of cannabis can raise Aphria and other Canadian LPs, Zuanic says. He says Aphria has several positive catalysts ahead in the near term, including a surge in exports. Cantor Fitzgerald has an “overweight” rating and $8.95 cost target for APHA stock.
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 comparison with various other Canadian LPs. But, Hifyre cannabis sales data for October recommend OrganiGram sales were down twenty five % month over month in contrast to a five % decline for the entire Canadian retail market. 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 earnings and growth in the long haul. 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 second quarter, Cresco beat consensus analyst sales estimates by 30 % and exceeded their earnings before interest, taxes, depreciation and amortization expectations by almost 200 %. Zuanic says Cresco’s forty two % sequential sales growth in the second quarter was the most effective growth rates with many of Cresco’s large MSO peers. Zuanic alleges the Illinois market is going to be a serious 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 actually a U.S. MSO that runs in twenty three states. Among those states is actually New Jersey, which might represent probably the largest opportunity among the states which legalized recreational marijuana on Election Day. Not only will Curaleaf gain from the new Jersey market, but Zuanic says Curaleaf may draw customers from neighboring New York and Pennsylvania. Curaleaf reported astounding 142 % revenue growth and 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 $18 cost target for CURLF inventory.
Green Thumb Industries (GTBIF)
Green Thumb Industries is actually a U.S. MSO that operates in 12 states, including California as well as Florida. Zuanic states Green Thumb has the very 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 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. He also anticipates further legalization of Pennsylvania, New York, Maryland as well as Connecticut in coming years. Cantor Fitzgerald has an “overweight” rating and $29 price target for GTBIF stock.
Trulieve Cannabis Corp. (TCNNF)
Trulieve Cannabis is an MSO which operates primarily in Florida. Zuanic recently hosted a call with Trulieve CEO Kim Rivers. After speaking with Rivers, Zuanic says he is comfortable in Trulieve’s potential to maintain a dominant market share of the high growth Florida medical marijuana market. Moreover, Zuanic says Trulieve has a substantial chance to produce the businesses of its in other states, like California, Massachusetts and Connecticut. 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 inventory.
GW Pharmaceuticals (GWPH)
As opposed to the various other cannabis stocks on this list, GW Pharmaceuticals is a biopharmaceutical business centered on developing cannabis-based drug treatments. The company’s lead drug Epidiolex has been approved by the Food and Drug Administration for the treatment 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 more rollout and adult customers in Europe. Cantor has an “overweight” rating and $165 cost target for GWPH inventory.