Analysts love these seven marijuana stocks.
The Joe Biden presidency hasn’t been as fruitful for cannabis stock investors up to this point as many initially hoped it would be. Even with Democrats holding the majority in both houses of Congress, there has been virtually no progress on meaningful federal marijuana reform or legalization. Republicans are on track to gain back control of both the House and the Senate in the midterm elections in November, according to online prediction market PredictIt. Cannabis investors are hoping Democrats are feeling the heat to finally tackle cannabis reform in 2022. Here are seven marijuana stocks to buy in 2022, according to Cantor Fitzgerald.
OrganiGram Holdings Inc. (ticker: OGI)
OrganiGram is a legal cannabis producer in Canada that started as a medicinal marijuana specialist but has expanded significantly into the adult recreational use market. OrganiGram reported 23% sales growth in the first quarter, and gross margins continued to improve. Analyst Pablo Zuanic says OrganiGram has several sales growth and margin expansion catalysts in fiscal 2022, and the company anticipates it will reach positive earnings before interest, taxes, depreciation and amortization, or EBITDA, by the fiscal third quarter. Zuanic says the stock’s discounted valuation is unwarranted. Cantor Fitzgerald has an “overweight” rating and $4.21 price target for OGI stock, which closed at $1.08 on June 6.
Cresco Labs Inc. (CRLBF)
Cresco Labs is a U.S. multistate operator, or MSO, that operates in 17 U.S. states and holds leading market shares in Illinois, Pennsylvania, Colorado and Virginia. Cresco is expanding its U.S. footprint aggressively, announcing a $2 billion buyout of Columbia Care Inc. (CCHWF) in March. In the difficult cannabis climate, Zuanic says he prefers larger MSOs that have competitive advantages, healthy balance sheets, a mix of retail and wholesale operations, solid financial positions and leading management teams. He says Cresco meets all those criteria. Cantor Fitzgerald has an “overweight” rating and $19 price target for CRLBF stock, which closed at $3.78 in over-the-counter, or OTC, trading on June 6.
Curaleaf Holdings Inc. (CURLF)
Curaleaf is a U.S. MSO that operates in 23 states. Curaleaf is the largest U.S. MSO by revenue, and Zuanic says it’s second to only a couple of Canadian producers in the global market. He says Curaleaf is well-positioned to benefit from a wave of eastern U.S. states legalizing recreational marijuana, a region in which prices and margins will initially be well above the national average. Zuanic says scaling up operations, adding vertical integration and developing innovative products will help Curaleaf expand margins. Cantor Fitzgerald has an “overweight” rating and $14.60 price target for CURLF stock, which closed at $6.38 in OTC trading on June 6.
Green Thumb Industries Inc. (GTBIF)
Green Thumb Industries is an MSO that operates 77 dispensaries in 15 U.S. markets. Green Thumb is one of the few cannabis stocks that has been consistently profitable for seven consecutive quarters. Zuanic says Green Thumb’s sales numbers slightly exceeded his expectations in the first quarter, but EBITDA margins came up about 4% short of consensus estimates. Margins also contracted for the fourth consecutive quarter. Still, Zuanic says the launch of recreational sales in New Jersey could help Green Thumb counter recent margin pressures. Cantor Fitzgerald has an “overweight” rating and $39 price target for GTBIF stock, which closed at $11.33 in OTC trading on June 6.
Trulieve Cannabis Corp. (TCNNF)
Trulieve Cannabis is primarily focused on Florida, where it dominates the medical marijuana market and operates 70% of its retail locations. Zuanic says Trulieve’s financial performance should improve in the second half of 2022 as it streamlines operations, launches targeted promotions and realizes synergies from its $2.1 billion acquisition of Harvest Health & Recreation in 2021. However, Zuanic says Trulieve may fall short of the high end of its full-year guidance, and there are no clear signs of Florida legalizing recreational marijuana through at least 2023. Cantor Fitzgerald has an “overweight” rating and $57 price target for TCNNF stock, which closed at $14.50 in OTC trading on June 6.
TerrAscend Corp. (TRSSF)
TerrAscend is a Canadian cannabis producer that also has U.S. operations in California, Maryland, New Jersey, Michigan and Pennsylvania. Zuanic says TerrAscend has several bullish catalysts in 2022, including the launch of New Jersey recreational marijuana sales. In addition, Zuanic is anticipating a recovery in the Pennsylvania market and says TerrAscend will benefit from its recent acquisition of Michigan cannabis operator Gage Growth. TerrAscend projects that each of its three New Jersey stores will reach a $40 million annual sales run rate by the end of the year. Cantor Fitzgerald has an “overweight” rating and $6.45 price target for TRSSF stock, which closed at $3.89 in OTC trading on June 6.
Village Farms International Inc. (VFF)
Village Farms is a unique play on Canadian cannabis because the company’s produce division, which grows vegetables in Canada, Texas and Mexico, accounts for more than half its revenue. Village Farms’ Pure Sunhouse subsidiary grows cannabis in British Columbia, and its Balanced Health subsidiary is a leader in the cannabidiol, or CBD, market. Village Farm’s diversified business model helps provide stability for investors. Zuanic says a tomato supply glut and bad timing of cannabis shipments masked solid underlying demand trends for Village Farms in the first quarter. Cantor Fitzgerald has an “overweight” rating and $7.30 price target for VFF stock, which closed at $3.02 on June 6.
7 best marijuana stocks to buy for 2022:
— OrganiGram Holdings Inc. (OGI)
— Cresco Labs Inc. (CRLBF)
— Curaleaf Holdings Inc. (CURLF)
— Green Thumb Industries Inc. (GTBIF)
— Trulieve Cannabis Corp. (TCNNF)
— TerrAscend Corp. (TRSSF)
— Village Farms International Inc. (VFF)
More from U.S. News
8 Financial Stocks to Buy as Interest Rates Rise
7 Best Cheap Dividend Stocks Under $10
7 Best Cryptocurrency ETFs to Buy
7 Best Marijuana Stocks to Buy for 2022 originally appeared on usnews.com
Update 06/07/22: This story was published at an earlier date and has been updated with new information.
