The election results are actually bullish for marijuana stocks.
Cannabis stock investors didn’t get the blue wave these were hoping for in the U.S. election, but all 5 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 potential geographic footprint of cannabis multistate operators, or MSOs. Unfortunately for cannabis investors, Democrats may 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, based on Cantor Fitzgerald.
Flower price depreciation has been a big concern for all Canadian licensed producers, or perhaps LPs. But, analyst Pablo Zuanic reveals Canadian LPs as Aphria might have “positive collateral benefits” from the U.S. election, assuming Joe Biden takes over the White House. Federal legalization may still be at least 2 years away, but decriminalization of adult-use marijuana and potential federal rescheduling of cannabis could raise Aphria as well as other Canadian LPs, Zuanic states. He says Aphria has multiple positive catalysts ahead 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 says OrganiGram’s retail sales trends in the third quarter had been fairly strong in comparison with other Canadian LPs. Nevertheless, Hifyre cannabis sales information for October recommend OrganiGram sales were down 25 % month over month in contrast to a five % decline for the complete Canadian retail market. OrganiGram has disappointed investors with the sluggish revenue growth of its and money burn, but Zuanic is optimistic the business may find the way of its to profitability and growth in the long haul. 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 second quarter, Cresco beat consensus analyst sales estimates by 30 % and exceeded the earnings of theirs before interest, taxes, depreciation and amortization expectations by about 200 %. Zuanic affirms Cresco’s 42 % sequential sales progress in the next quarter was the top growth rates among almost all of Cresco’s large MSO peers. Zuanic states the Illinois market will be a serious near term growth driver for Cresco, and the Origin House acquisition of its ought to supplement the organic growth of its. Cantor Fitzgerald has an “overweight” rating and sixteen dolars cost target for CRLBF inventory.
Curaleaf is a U.S. MSO that works in 23 states. One of those states is New Jersey, that might represent probably the largest opportunity with the states which legalized recreational marijuana on Election Day. Not simply will Curaleaf benefit from the new Jersey sector, but Zuanic says Curaleaf will probably draw customers from neighboring Pennsylvania and New York. Curaleaf reported astounding 142 % revenue growth as well as 180 % gross 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 stock.
Green Thumb Industries (GTBIF)
Green Thumb Industries is a U.S. MSO which operates in 12 states, including California as well as Florida. Zuanic reveals Green Thumb has the best risk profile of Cantor’s top-rated MSOs. Green Thumb has expanded its footprint in Illinois and Pennsylvania without overextending the balance sheet of its, it currently has a sizable presence in New Jersey and Zuanic is projecting revenue will mature 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 twenty nine dolars cost target for GTBIF inventory.
Trulieve Cannabis Corp. (TCNNF)
Trulieve Cannabis is actually an MSO which operates 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 potential to keep a dominant market share of the high growth Florida medical marijuana market. Furthermore, Zuanic says Trulieve has a significant alternative to grow its companies in other states, including Connecticut, Massachusetts, and California. Finally, he is optimistic Florida voters can 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 a biopharmaceutical company centered on developing cannabis based drug treatments. The company’s lead drug Epidiolex has been approved by the Food as well as Drug Administration for the treatment of pediatric epilepsy. Cantor analyst Charles Duncan states GW’s third-quarter Epidiolex sales exceeded his expectations. He also sees several bullish catalysts for GW through the tail end of 2021, which includes further penetration into adult individuals and more rollout in Europe. Cantor has an “overweight” rating and $165 cost target for GWPH stock.