A US House Committee on 30th September passed a bill that could legalize marijuana. The bill seeks to decriminalise and deschedule cannabis, putting it in the same category as nicotine.
As a result, the cannabis industry could experience significant growth, thus boosting stock prices. Here are some of the best cannabis stocks to buy in anticipation of potential marijuana legalisation.
Trulieve Cannabis
Trulieve Cannabis Corp (OTCMKTS:TCNNF) shares surged nearly 4% on Tuesday, trimming losses of the previous two trading sessions. Trulieve is both a cannabis grower and retailer, focusing on the Florida medical marijuana market.
Its sales and earnings have continued to rise since swinging to profits in 2017, making it one of the most consistent performers in the industry. As a result, the stock trades at a reasonable P/E ratio of 37.61, making it an attractive option for value investors.
And with the US cannabis legalisation inching closer based on recent developments, growth investors could also find Trulieve exciting amid the company’s solid financial position.
Source – TradingView
Technically, Trulieve shares seem to be trading closer to the 100-day moving average after a recent pullback, thus creating a perfect opportunity for a rebound.
Therefore, investors could target profits at about $29.48, or higher at $33.00. On the other hand, if the stock completes a downward breakout, it could fund support at $24.27, or lower at $21.17.
Jazz Pharmaceuticals
Jazz Pharmaceuticals Plc (NASDAQ:JAZZ) shares edged higher 2.6% on Tuesday, extending gains since the 4th of October to over 13%. The company bought Epidiolex maker GW Pharmaceutical in May, creating a consistent source of income. Epidiolex is the first cannabis drug to be approved by the US Food and Drug Administration (FDA).
From an investment perspective, Jazz trades at a compelling forward P/E ratio of 8.28, making it an attractive option for value investors. In addition, the company’s average annual EPS growth forecast of about 19.25 for the next five years, could gain the attention of growth investors.
Source – TradingView
Technically, Jazz shares seem to be trading within an ascending channel formation in the intraday chart. As a result, the stock has surged closer to the overbought conditions of the 14-day RSI, creating a perfect opportunity for a pullback.
However, given the company’s exciting earnings growth prospects and its compelling valuation of just 8.28 P/E, the current rally could continue for the foreseeable future.
Therefore, investors could target extended gains at about $152.77, or higher at $160.95, while $135.49 and $127.31 are crucial support zones.
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