Most multistate cannabis operators will outperform the S&P500 in the year ahead, according to Cantor Fitzgerald analyst Pablo Zuanic.
Ayre, which just rebranded as Ayr Wellness, is Neutral-rated by Cantor Fitzgerald. Zuanic increasd the 12-month price target from $31 to $39.
Zuanic’s new estimates reflect Cantor’s state-by-state market size assumptions, the analyst said.
New Jersey will begin recreational sales by January 2022 as opposed to July of this year, as previously thought, he said.
Outperformance among Ayr and other MSOs is due to the following, Zuanic said:
Better-than-expected earnings Dynamics changing in the companies’ states (going from medicinal to recreational earlier than expected; economics changing due to more licenses issued and/or increased competition) MSO profiles changing (balance of depth vs. breadth; leveraging scale or scale triggering complexity and margin dilution; accretive vs. dilutive M&A). Green Thumb
Zuanic expects Green Thumb Industries Inc. (CSE:GTII) (OTCQX: GTBIF) sales to climb from $551 million in 2020 to almost $2 billion by 2024 as more states in the company’s portfolio legalize recreational weed.
The states in question include New Jersey, New York, Connecticut, Maryland and Pennsylvania.
Ohio and Flordia will remain medical markets during that time, he said, and by 2024, five states will contribute over 80% of Green Thumb’s sales — Pennsylvania, Illinois, New York, New Jersey and Nevada.
“During the 2020-2024 period we project EBITDA should go from $168Mn to $761Mn,” the analyst said.
Green Thumb, which Zuanic rates at Overweight, was recently infused with some $100 million in financing from an undisclosed institutional investor.
Investment firm BlackRock, Inc. (NYSE: BLK) is rumored to be the investor. A representative for Green Thumb would not confirm the deal took place, and a BlackRock spokesperson did not provide a statement on the