3 Marijuana Stocks Wall Street Predicts Will Rally by More Than 70%

: CRLBF | Cresco Labs Inc. News, Ratings, and Charts

CRLBF – With increasing legalization at the state level and increasing acceptance of recreational and medical use, the cannabis industry is expected to grow significantly this year and beyond. Wall Street analysts are particularly bullish on cannabis stocks like  Cresco Labs (CRLBF), GrowGeneration Corp (GRWG), and Zynerba Pharmaceuticals (ZYNE).

While marijuana remains prohibited at the federal level, it has gotten wider acceptance for medical and recreational purposes, with an increasing number of states legalizing its use. Moreover, in July 2021, three top U.S. Democratic senators unveiled a discussion draft of a bill that aims to legalize cannabis at the federal level, a move that would allow adults to buy and possess up to 10 ounces of marijuana without facing criminal penalties.

With the increasing use of marijuana to treat chronic diseases and for recreational purposes, the industry is expected to grow in the upcoming months. According to a Grand View Research report, the global legal marijuana market is expected to grow at a CAGR of 26.7% to reach $70.6 billion by 2028.

Given this backdrop, Wall Street analysts expect marijuana stocks Cresco Labs Inc. (CRLBF), GrowGeneration Corp. (GRWG), and Zynerba Pharmaceuticals, Inc. (ZYNE) to rally by more than 70% in the upcoming months. So, it could be wise to add these three stocks to your watchlist.

Cresco Labs Inc. (CRLBF)

CRLBF mainly cultivates, manufactures, and sells retail and medical cannabis products in the United States. It owns and operates 32 dispensaries and 44 retail licenses. One of its famous brands includes the FloraCal brand, which offers cannabis flowers.

On September 23, CRLBF announced a definitive agreement to acquire 100% of the outstanding equity interests in Bay, LLC d/b/a Cure Pennsylvania. This acquisition, which is expected to close in the fourth quarter, is expected to help the company expand its retail footprint in Pennsylvania and increase profitability.

CRLBF’s revenue increased 122.8% year-over-year to $209.97 million in the second quarter ended June 30, 2021. Its gross profit came in at $100.98 million, up 217.7% year-over-year. Its income from operations came in at $14.87 million compared to a loss of $20.94 million. Its net income came in at $2.65 million, compared to a loss of $41.7 million in the prior-year period. Also, its adjusted EBITDA came in at $45.53 million, compared to a loss of $840,000 in the year-ago period.

Analysts expect CRLBF’s revenue to increase 81.6% year-over-year to $864.89 million in fiscal 2021. Also, its EPS is expected to grow more than 94% in the current year. The stock has gained 63.6% over the past year to close yesterday’s trading session at $9.64. Wall Street analysts expect the stock to hit $16.86 in the near term, which indicates a potential upside of 74.9%.

GrowGeneration Corp. (GRWG)

Farm supply company GRWG owns and operates retail hydroponic and organic gardening stores. It engages in the marketing and distribution of horticultural, organics, lighting, and hydroponics products and offers products and services through GrowGen.Pro as well, an online e-commerce store. In addition, it serves commercial and urban cultivators growing specialty crops.

GRWG announced two new hydroponic garden centers on September 15 to serve the largest hydroponic market in Los Angeles County, California. This positions the company favorably to sell to the highest concentration of commercial indoor cannabis growers in California.

For the fiscal second quarter ended June 30, 2021, GRWG’s sales increased 189.7% year-over-year to $125.89 million. Its income from operations came in at $9.61 million, up 242.1% year-over-year. Its net income came in at $6.71 million, up 160.8% year-over-year. Also, its EPS came in at $0.11, representing an 83.3% year-over-year rise.

GRWG’s revenue is expected to come in at $471.64 million in fiscal 2021, representing a 143.9% year-over-year rise. The company’s EPS is expected to increase 318.2% year-over-year to $0.46 in the current year. Over the past year, the stock has gained 79.4% to close yesterday’s trading session at $27.02. Wall Street analysts expect the stock to hit $56.60 in the near term, which indicates a potential upside of 109.5%.

Zynerba Pharmaceuticals, Inc. (ZYNE)

Clinical-stage specialty pharmaceutical company ZYNE is primarily focused on developing pharmaceutically-produced transdermal cannabinoid therapies for rare and near-rare neuropsychiatric disorders. Its development pipeline includes two product candidates: ZYN002 and ZYN001.

On September 13, ZYNE announced the initiation of a pivotal, multinational randomized, double-blind, placebo-controlled, multiple-center efficacy and safety (RECONNECT) Phase 3 trial. Armando Anido, the company’s chairman and CEO, said, “ The RECONNECT trial provides us with an opportunity to confirm the positive results observed in a population of responders in our CONNECT-FX trial and further demonstrate the effect of Zygel on behaviors associated with FXS.”

For the fiscal second quarter ended June 30, 2021, ZYNE’s total operating expenses decreased 55% year-over-year to $9.84 billion. Its loss per share came in at $0.25, compared to $0.78 in the year-ago period. In addition, its total assets came in at $98.20 billion for the period ended June 30, 2021, compared to $74.06 billion for the period ended December 31, 2020, while its total liabilities came in at $10.5 billion for the period compared to $13.91 billion for the period ended December 31, 2020.

ZYNE’s EPS is expected to increase 48.9% in fiscal 2021. Over the past year, the stock has gained 39.6% to close yesterday’s trading session at $4.58. Wall Street analysts expect the stock to hit $8.50 in the near term, which indicates a potential upside of 85.6%.


CRLBF shares were trading at $9.27 per share on Tuesday morning, down $0.37 (-3.84%). Year-to-date, CRLBF has declined -6.03%, versus a 17.59% rise in the benchmark S&P 500 index during the same period.


About the Author: Riddhima Chakraborty


Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries. More...


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