Cantor Fitzgerald Initiates Research Coverage On These 3 Marijuana Stocks

Cantor Fitzgerald’s Pablo Zuanic initiated research coverage of Verano Holdings Corp. VRNOF, Ascend Wellness Holdings, Inc. AAWH, and Planet 13 Holdings Inc. PLTH PLNHF.

The Thesis

The analyst initiated research coverage on Ascend Wellness Holdings, Inc. with "a Neutral rating and a 12-month price target of $1.75,” reads the report. Regarding Verano Holdings: “We initiate research coverage with an Overweight rating and a 12-month price target of $10,” Zuanic said.

On its part, Planet 13, with “a Neutral rating and a 12-month price target of $0.95 (...) has built one of the most iconic megastore concepts in the cannabis space," per the analyst.

The most recent thesis on these three cannabis stocks includes the following:

Verano

Verano "is the fourth-largest MSO by revenues ($900Mn annualized 3Q22) and EBITDA ($340Mn annualized 3Q22) and enjoys the highest EBITDA margins as disclosed (37%) owing to strong franchises in states with attractive economics like Florida, Illinois, and New Jersey," per the analyst who also believes the company has greater recreational optionality than the MSO average.

The company "has some of the highest operating cash flow metrics among MSOs, second only to Green Thumb, and one of the strongest balance sheets in the group," said Zuanic.

Ascend Wellness

Ascend with a Neutral rating and a 12-month price target of $1.75, has “an established presence in four states (IL, MA, MI, NJ), is starting operations in OH/PA, and is in the process of acquiring four stores in MD," according to the report.

Moreover, the company “is the 8th largest U.S. MSO by revenues ($445Mn annualizing 3Q22), and reported EBITDA margins of 25% in 3Q22," Zuanic said. Additionally, “the company is guiding for 2023 sales growth well above the peer group, owing to the momentum in NJ, organic asset expansion, and the MD deal,’ he added.

Planet 13

The analyst began Planet coverage with a Neutral rating and a 12-month price target of $0.95.

In Zuanic's opinion, "Planet 13 has built one of the most iconic megastore concepts in the cannabis space, with its Las Vegas flagship store (in total a 122K sq ft “entertainment complex”) generating $60Mn in sales per annum (almost 10x the state average)."

Price Actions

At the time of writing Friday afternoon, Verano shares were trading 5.12% higher at $3.101 per share, Ascend shares were up 1.48% at $1.37 per share and Planet 13 stock was trading 3.41% higher at $0.91 per share.

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