According to a report by New Frontier Data, which analyses the current cannabis economy in the United States, the factors driving the bullish market for cannabis are strong consumer demand, an increase in newly operational legal state markets in recent years, the normalization of cannabis consumption, and increasing societal recognition of marijuana's therapeutic and wellness applications.
In addition, given the bill passed by the House of Representatives on Friday that could legalize marijuana nationwide, the demand for cannabis is expected to soar. According to cannabis data experts at BDSA Analytics, global cannabis sales will reach $35 billion in 2022, an increase of 22% from 2021.
Given this backdrop, Wall Street analysts expect fundamentally sound cannabis stocks Greenlane Holdings, Inc. (GNLN), Cara Therapeutics, Inc. (CARA), Flora Growth Corp. (FLGC), Corbus Pharmaceuticals Holdings, Inc. (CRBP), and Verano Holdings Corp. (VRNOF) to deliver significant upside in the coming months.
Greenlane Holdings, Inc. (GNLN)
GNLN in Boca Raton, Fla., develops and distributes cannabis accessories, child-resistant packaging, vape solutions, and lifestyle products in the United States, Canada, and Europe. It operates through two segments: Consumer Goods and Industrial Goods. The company provides consumption accessories, vaporizers, pipes, rolling papers and packaging, and other smoking and vaporization-related accessories and merchandise.
GNLN's net sales increased 54.4% year-over-year to $56.02 million during the fourth quarter, ending Dec. 31, 2021. Its gross profit grew 102.7% from its year-ago value to $12.47 million. And the company's cash and cash equivalent stood at $12.86 million during its fiscal year ending Dec. 31, 2021.
The $51.69 million consensus revenue estimate for the first quarter, ending March 31, 2022, represents a 52% year-over-year improvement. In addition, GNLN has an impressive earnings history; it surpassed the consensus EPS estimate in three of the trailing four quarters.
All three Wall Street Analysts that rated the stock rated it Buy. The 12-month median price target of $2.33 represents a 389.6% potential upside. The price targets range from a low of $2.00 to a high of $3.00. The stock closed its last trading session at $0.48.
Cara Therapeutics, Inc. (CARA)
CARA is an early commercial-stage biopharmaceutical company that emphasizes developing and commercializing chemical entities, focusing primarily on pruritus and pain by selectively targeting kappa opioid receptors in the United States. The Shelton, Conn.-based company is also developing product candidates that target the body's peripheral nervous system and immune cells.
Last month, CARA reported that data from a sub-study of the KARE Phase 2 clinical trial demonstrated that Oral KORSUVA (difelikefalin) improved itch and inflammatory biomarkers in atopic dermatitis (AD) patients with moderate-to-severe pruritus. The biomarker data were displayed during the Late-Breaking Research: Clinical Trials session at the 2022 American Academy of Dermatology (AAD) Annual Meeting.
In February, CARA announced that the European Medicines Agency's (EMA) CHMP had recommended approval of Kapruvia (difelikefalin) to treat moderate-to-severe pruritus associated with chronic kidney disease in hemodialysis patients. The CHMP opinion is the base for the European Commission's final decision regarding marketing authorization for Kapruvia®. If Kapruvia® is approved, it will be the first therapy available in Europe for the treatment of chronic kidney disease-associated pruritus (CKD-aP) in hemodialysis patients.
During the fourth quarter, ended Dec. 31, 2021, CARA's total revenue amounted to $0.82 million. Its cash and cash equivalent stood at $13.45 million during its fiscal year ending Dec. 31, 2021.
Analysts expect CARA's revenue to be $2.26 million for the first quarter, ending March 31, 2022, indicating 16.8% year-over-year growth. Furthermore, the company's shares have surged 4.5% in price year-to-date and 19% over the past month.
The four Wall Street Analysts that rated the stock rated it Buy. Closing its last trading session at $12.73, the 12-month median price target of $26.00 represents a 104.2% potential upside. The price targets range from a low of $19.00 to a high of $30.00.
Flora Growth Corp. (FLGC)
Headquartered in Toronto, Canada, FLGC is a cannabis company that cultivates, processes, and supplies cannabis products to pharmacies, medical clinics, and cosmetic companies worldwide. It cultivates, processes, and supplies medicinal-grade cannabis oil and cannabis oil extracts and related products; manufactures and sells skin care and beauty products; manufactures dermo-cosmetic products; and develops and sells pharmaceuticals.
Last month, FLGC announced that its brand JustCBD has partnered with German company Greenyard to open brick-and-mortar stores across Germany and the Czech Republic. In addition to opening brick-and-mortar stores, JustCBD products will be distributed by Greenyard throughout Germany, the Czech Republic, Poland, Austria, Switzerland, Ukraine, Georgia, and Estonia.
Also, last month, FLGC announced that it had signed a distribution agreement with Israel-based DNO Group to distribute the Mind Naturals brand in the Hong Kong region. DNO Group is one of the largest distributors of global independent brands and has more than 50,000 points of sale throughout Asia and its broader global reach. Under the agreement, Flora will collaborate with DNO to identify growth opportunities and bring the Mind Naturals brand to market in new territories using an omnichannel approach, including brick and mortar retail, e-commerce, and other wholesale markets.
FLGC’s trailing 12-month total revenue amounted to $2.22 million, while its trailing-12-months gross profit came in at $1.08 million.
The stock has gained 2.8% in price year-to-date and 2.2% over the past three months. Closing its last trading session at $1.83, the 12-month price target of $11.50 indicates a potential upside of 528.4%.
Corbus Pharmaceuticals Holdings, Inc. (CRBP)
CRBP is a biopharmaceutical company that emphasizes the development of immune modulators for immuno-oncology and fibrosis diseases. It develops lenabasum, an oral molecule that selectively activates cannabinoid receptor type 2 (CB2), which is in Phase II clinical trials to treat systemic lupus erythematosus; CRB-601, an anti-integrin monoclonal antibody (mAb) for the treatment of cancer and fibrosis that inhibits the activation of transforming growth factor ß (TGFß); and CRB-602, an anti-avß6/avß8 mAb that blocks the activation of TGFß for the treatment of fibrotic diseases. CRBP is based in Norwood, Mass.
For the fourth quarter, ending Dec. 31, 2021, CBRP’s other income stood at $0.11 million, while its operating expenses declined 52% from its year-ago value to approximately $10 million. Its cash and cash equivalents stood at $25 million for its fiscal year ending Dec. 31, 2021.
The company's revenue is expected to increase 1499.8% year-over-year to $5.26 million in its fiscal year 2023. The stock has surged 30.7% in price over the past month.
Of the two Wall Street Analysts that rated the stock, one rated it Buy, and one rated it Hold. Closing its last trading session at $0.44, the 12-month median price target of $3.00 represents a 580% potential upside.
Verano Holdings Corp. (VRNOF)
Chicago’s VRNOF functions as a vertically-integrated multi-state cannabis operator in the United States. It is engaged in the cultivation, processing, and retail license of cannabis in Illinois, Florida, Arizona, Maryland, Nevada, Ohio, Michigan, Massachusetts, Arkansas, New Jersey, Pennsylvania, and West Virginia. During the third quarter, ending Sept. 30, 2021, VRNOF's revenue increased 105.7% year-over-year to $206.83 million. Its income from operations amounted to $186.51 million, up 79% from its prior-year quarter, whereas its net income grew 27.1% from its year-ago value to $103.72 million.
The company's EPS is expected to increase 36.3% year-over-year to $0.14 for the first quarter, ending March 31, 2022. Analysts expect VRNOF's revenue to increase 86.6% year-over-year to $225.61 million for the same period.
The five Wall Street Analysts that rated the stock rated it Buy. The 12-month median price target of $30.1 represents a 234.7% potential upside. The price targets range from a low of $24.02 to a high of $38.44. The stock closed its last trading session at $9.00.
GNLN shares were trading at $0.46 per share on Thursday morning, down $0.02 (-3.97%). Year-to-date, GNLN has declined -52.29%, versus a -6.24% rise in the benchmark S&P 500 index during the same period.
About the Author: Spandan Khandelwal
Spandan's is a financial journalist and investment analyst focused on the stock market. With her ability to interpret financial data, she aims to help investors evaluate the fundamentals of a company before investing.
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