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Bearing that in mind, there are plenty of options for those willing to shoulder the risk. We used TipRanks’ database to take a closer look at three cannabis stocks backed by Wall Street analysts. Not only all of the names have received enough support to earn a “Strong Buy” consensus rating, but each also boasts some brag-worthy upside potential. Here are the details.
Verano Holdings (VRNOF)
First up on the list is Verano Holdings, a $1.69 billion company based in Chicago. The company is a major producer in the US cannabis market. The company has 11 cultivation and production facilities, providing cannabis products for 87 operating retail locations. Verano sells its cannabis products subject to state regulations under four brand names. Its production facilities boast over 830,000 square feet of growing space.
Verano has been working steadily to expand its footprint, and in October and November it opened two new dispensaries – featuring its Zen Leaf brand – in St. Charles, Illinois and in Las Vegas, Nevada. In addition, the company announced on November 10 that it will be entering the Connecticut cannabis market.
The company will report 3Q21 earnings on November 16, but a look back at Q2 can give us a sense of where Verano stands. Revenues reached $199 million in that quarter, up 39% sequentially and a whopping 164% year-over-year. The quarter was a company record. After the second quarter ended, the company announced an upsize to its existing credit facility, boosting the total available to $250 million. The interest rate is 8.5%, and the agreement includes an additional $100 million on option. The upsized credit is a major increase in Verano’s available liquidity.
Analyst Scott Fortune, from Roth Capital, sees Verano as a compelling buy, especially after the stock’s share price has fallen over the past several months.
“We believe VRNO is overdue for a significant rerating after the share lockup overhang and improved share liquidity similar to the top MSOs... With shares trading [~46%] off its 52-week high, VRNO presents a compelling valuation opportunity at these levels and remains our favorite MSO name with the largest potential appreciation upside from strong fundamentals and ahead of potential incremental federal legislation,” Fortune noted.
To this the Roth Capital analyst gives the stock a Buy rating, and his $32 price target implies a one-year upside of ~131%. (To watch Fortune’s track record, click here)
Overall, Verano’s Strong Buy consensus rating reflects a unanimous approval from Wall Street, with recent 4 positive reviews. The shares are priced at $13.86 and the $32.10 average price target matches Roth Capital's. (See Verano stock analysis on TipRanks)
