5 Cannabis Stocks With 63% to 127% Upside, According to Wall Street
With two-thirds of Americans in favor of legalizing cannabis and a slew of states passing cannabis legalization bills since the November elections, federal action on cannabis de-regulation seems possible, though not assured, in the near future. While change may be afoot in Washington, U.S. multistate operators (MSOs) have been posting strong growth and increasing profitability, at least on an EBITDA basis.
Because of federal illegality, U.S. cannabis operators have to pay out excessive taxes and borrow at high rates, limiting their ability to make any real net profits. Yet if those excessive burdens were to go away, these companies could become very strong consumer discretionary stocks with a long runway for profitable growth.
After an early 2021 surge, many U.S. cannabis stocks have pulled back in a similar manner to high-growth but unprofitable technology stocks. But after the pullback, Wall Street analysts still see significant upside for U.S. cannabis operators, with several having average analyst price targets well above their current stock prices.
Source Fool.com