US Senate Majority Leader Schumer’s bill is unlikely to be passed, but it’s a good starting point for negotiations, said Owen Bennett, senior vice president of global tobacco and cannabis stocks at Jefferies Equity Research, on BNN Bloomberg.
And with recent weed stock pullbacks, analysts are saying some are well-positioned to reap rewards if and when reform eventually happens.
CanCon casualties could bounce back
Bennett named Canopy, Cronos and Tilray as the best-positioned Canadian stocks ready to gain from federal cannabis reform.
“If some kind of reform passes, I mean what is clear is that it’s going to be very expensive to get a foothold, whether you do it organically or by buying local US assets,” he said. “Therefore ideally you want to be in those Canadian names who have the infrastructure in place to support that organic development, have the balance sheets to invest appropriately and/or have optionality on US cannabis assets. So for those, there are three Canadian names that stand out.”
And don’t forget the MSOs, baby!
Cantor Fitzgerald analyst Pablo Zuanic agreed some Canadian weed stocks could benefit from reform, according to Insider, but he’s sticking to his four US MSO recommendations: Curaleaf, Green Thumb Industries, Trulieve, and Cresco Labs.
He also said to avoid stretched companies that lack “state-level depth,” those that complain about their valuations more than they do business, and those that are indebted to “predatory” loan companies.
“Again,” he said, “make use of Wednesday’s weakness — selectively, in our view.”
Note: Pablo Zuanic of Cantor Fitzgerald is a confirmed speaker at Business of Cannabis: New York, slated for September 29 in New York City. Learn more.