US-headquartered and listed Cannabis companies in my watchlist

Federal legislation will materially change the US Cannabis market. Therefore, it’s important for investors to monitor the situation in preparation for these changes.

You probably are aware that Cannabis companies that are listed on the Nasdaq or NYSE are not allowed to do any business directly growing or selling Cannabis, so they trade USOTC.

In my research, the best of the US multi-state operators appear to be: Curaleaf (OTCPK:CURLF), Green Thumb (OTCQX:GTBIF), Cresco Labs (OTCQX:CRLBF), and Trulieve (OTCQX:TCNNF). Based on their faster revenue growth and higher profit margins, these four stocks appear to trade at attractive multiples. Federal legislation is anticipated within a year, so in addition to my investments in Village Farms (VFF) and Clever Leaves (CLVR), these four stocks have made my watchlist.

Without contributing my own thoughts at this time, I am producing the related content at MarketBeat.com.

 

GREEN THUMB INDUSTRIES (OTCMKTS:GTBIF) PROFILE, PRICE TARGET, AND CONSENSUS RATING

Green Thumb Industries Inc. manufactures, distributes, and sells various cannabis products for medical and adult-use in the United States. It offers cannabis flower; and processed and packaged products, including concentrates, edibles, and topical and other cannabis products under the Rythm, Dogwalkers, The Feel Collection, incredibles, Dr. Solomon’s, Beboe, and other brands. The company distributes its products primarily to third-party retail stores, as well as sells finished products directly to consumers in its own retail stores. As of March 25, 2021, it owned and operated 55 retail stores in the United States. The company was founded in 2014 and is headquartered in Chicago, Illinois.

Twelve Wall Street analysts have issued ratings and price targets for Green Thumb Industries in the last 12 months. Their average twelve-month price target is $54.06, predicting that the stock has a possible upside of 80.23%. The high price target for GTBIF is $77.00 and the low price target for GTBIF is $38.00. There are currently 12 buy ratings for the stock, resulting in a consensus rating of “Buy.”

 

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CURALEAF (OTCMKTS:CURLF) PROFILE, PRICE TARGET, AND CONSENSUS RATING

Curaleaf Holdings, Inc. operates as a holding company with interest in medical and wellness cannabis operations. It operates through the Cannabis Operations and Non-Cannabis Operations segments. The Cannabis Operations segment includes the production and sale of cannabis via retail and wholesale channels. The Non-Cannabis Operations segment provides professional services including cultivation, processing and retail know-how and back office administration, intellectual property licensing, real estate leasing services and lending facilities to medical and adult-use cannabis licensees under management service agreements. The company was founded on November 13, 2014 and is headquartered in Wakefield, MA.

Nine Wall Street analysts have issued ratings and price targets for Curaleaf in the last 12 months. Their average twelve-month price target is $24.79, predicting that the stock has a possible upside of 109.87%. The high price target for CURLF is $32.25 and the low price target for CURLF is $19.00. There are currently 1 sell rating and 8 buy ratings for the stock, resulting in a consensus rating of “Buy.”

 

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CRESCO LABS (OTCMKTS:CRLBF) PROFILE, PRICE TARGET, AND CONSENSUS RATING

Cresco Labs Inc., together with its subsidiaries, cultivates, manufactures, and sells retail and medical cannabis products in the United States. It provides cannabis in flowers, vape pens, live resins, disposable pens, and extracts under the Cresco brand; flowers, popcorns, shakes, pre-rolls, and vapes under the High Supply brand; flowers, vapes, and edibles under the Good News brand; vapes and edibles under the Wonder Wellness Co brand; and tinctures, capsules, salves, ingestibles, sublingual oils, and transdermal patches under the Remedi brand, as well as cannabis products made from plants under the Reserve brand. The company also offers cannabis flowers under the FloraCal brand; and chocolate and toffee confections, fruit-forward gummies, hard sweets, and taffy under the Mindy’s Edibles brand, as well as licenses the Kiva brand, which produces cannabis infused edibles, including chocolate confections, gummies, mints, and tarts. It owns and operates 32 dispensaries, as well as 44 retail licenses. The company is headquartered in Chicago, Illinois.

Seven Wall Street analysts have issued ratings and price targets for Cresco Labs in the last 12 months. Their average twelve-month price target is $23.88, predicting that the stock has a possible upside of 137.80%. The high price target for CRLBF is $36.00 and the low price target for CRLBF is $13.50. There are currently 7 buy ratings for the stock, resulting in a consensus rating of “Buy.”

 

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TRULIEVE CANNABIS (OTCMKTS:TCNNF) PROFILE, PRICE TARGET, AND CONSENSUS RATING

Trulieve Cannabis Corp. engages in the provision of medical cannabis products and services. It cultivates and produces its products in-house and distributes to its branded stores, as well as directly to patients via home delivery. The company was founded on September 17, 1940, and is headquartered in Quincy, FL.

Eleven Wall Street analysts have issued ratings and price targets for Trulieve Cannabis in the last 12 months. Their average twelve-month price target is $70.81, predicting that the stock has a possible upside of 158.89%. The high price target for TCNNF is $132.00 and the low price target for TCNNF is $31.00. There are currently 11 buy ratings for the stock, resulting in a consensus rating of “Buy.”

Trulieve was attacked in a mid-December 2019 26-page short-seller report by Grizzly Research. Grizzly alleged that Trulieve:

  1. Produces low-quality marijuana based on drone footage.
  2. “Portrayed profitability” through suspicious accounting.
  3. Has “extensive ties” with an ongoing FBI investigation of public corruption in north Florida, mostly involving the CEO’s husband JT Burnette.

https://grizzlyreports.com/wp-content/uploads/2019/12/Trulieve-Report-.pdf

Soon afterward, Trulieve shareholders sued the Company, and Trulieve has recently asked a federal judge to toss the consolidated suit. Trulieve also filed a lawsuit in Florida state court against GRIZZLY RESEARCH LLC alleging defamation for publicly disseminating false and libelous statements about Trulieve to manipulate the stock price and further its own financial interests. This case has supposedly stalled due to the pandemic.

“Overall we consider the Grizzly short report as largely rehashing old information and misleading less sophisticated investors over the company’s actually very strong fundamentals,” analyst Rob Fagan of the investment banking firm Stifel GMP wrote shortly after the Grizzly report was published. Fagan called Grizzly’s take on Trulieve’s accounting a “rookie analysis.”

JT Burnette, in fact, was charged and convicted (August 13, 2021) in federal court of one count of Extortion Under Color of Official Right, two counts of Honest Services Fraud by Bribery, one count of Use of Interstate Commerce Facilities to Promote Bribery, and one count of Making False Statements to a Federal Officer.

I encourage investors to read all short-seller reports if they relate to their investment interests, as I did with similar reports about Silvercorp and New Pacific Metals because of my investments there. In those cases, I took the side of the companies and continued to invest. In the case of Trulieve, I do think the conviction of JT Burnette, who Grizzly claimed 18 months earlier is or was significantly linked to Trulieve, does impact my thinking of Trulieve to some extent. However, because all eleven Wall Street analysts who follow this company have Buy recommendations on the stock, TCNNF remains on my watchlist. But I leave any conclusion of the entire Trulieve situation, including the Grizzly allegations, up to the investor.

 

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