Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.
Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.
You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More
Not typically accustomed to positive news about their sector, marijuana stock investors had good occasion to celebrate on Friday.
Not only did President Biden sign the nation’s first marijuana reform bill into law, a stock analyst also initiated coverage of top American marijuana stocks — led by Green Thumb Industries (GTBIF 6.54%) and Curaleaf (CURLF 3.28%) — with a very bullish research note. As a consequence, Green Thumb’s stock price rose by nearly 7% on the day, while Curaleaf’s improved by over 3%.
Biden’s signature now graces the Medical Marijuana and Cannabidiol Research Expansion Act, a bipartisan piece of legislation that provides easier access to researchers studying the namesake plant.
Although this isn’t anywhere near the full national decriminalization of weed that cannabis stock investors crave, it’s an important first step on that path. It’s also historic, as the first stand-alone U.S. federal marijuana reform act passed into law.
This encouraging development was compounded by the initiation of four weed stocks in the coverage universe of Wedbush Securities. That company’s analyst Gerald Pascarelli initiated Trulieve Cannabis and Cresco Labs in addition to Green Thumb and Curaleaf.
A marijuana industry bull, Pascarelli is optimistic on the prospects of all four companies. He tagged each with an outperform (buy) recommendation. Of the quartet, he is most hopeful for Green Thumb, which he singled out as Wedbush’s top pick in the sector.
“We believe that brighter days lie ahead for the U.S. cannabis industry and that incremental revenues from new states slated to come online for adult use sales, coupled with a normalization in trend in legacy markets, as well as the potential for near-term regulatory reform present a compelling risk/reward setup for the market leading multi-state operators,” Pascarelli wrote in his analysis.
Investors are clearly buying this argument; public support for decriminalization is high, and states continue to jump on the recreational legalization bandwagon. It may not be too long before this spreads nationwide through comprehensive federal decriminalization.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Cresco Labs, Green Thumb Industries, and Trulieve Cannabis. The Motley Fool has a disclosure policy.
*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.
Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services.
Making the world smarter, happier, and richer.
Market data powered by Xignite.
