New York Set to Legalize Recreational Marijuana: 4 Top Stocks to Buy Now

The momentum for marijuana legalization in the United States for personal use among adults received a solid tailwind by the COVID-19 pandemic putting a huge strain on state budgets as tax revenues dwindled as entire state economies were closed down. When one of the biggest and most populated states decides it is time to legalize pot, it is also time for investors to look at the top stocks in the industry again.

Last Saturday, a bill to legalize adult-use cannabis was introduced following a three-way agreement being reached between Governor Cuomo, the state senate majority leader and assembly speaker. This puts New York in position to become the 17th state to legalize adult-use cannabis. In addition, the bill grandfathers in vertical integration for legacy medical cannabis operators, which top analysts see as a big win for current ones in the state.

We decided to screen our 24/7 Wall St. database looking for some of the top companies in the industry. Investors that don’t own shares are in a great position now, as many of the top stocks have backed up substantially and are offering some outstanding entry points. It is still important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Aphria

This company is very close to achieving positive cash flow. Aphria Inc. (NASDAQ: APHA) engages in the production and supply of medical cannabis.

Recently the company announced a merger with Tilray, which will make it the largest cannabis company in the world in terms of revenue. Cost savings look material. Aphria’s respected chief executive officer will lead the new company. This looks like an intriguing play for investors looking to add shares before the merger is completed.

In the all-stock merger, Aphria shareholders will receive .08381 shares of Tilray from every Aphria share they own.

Cantor Fitzgerald’s Overweight rating comes with a Wall Street high $32.50 price target. No consensus target was available. The shares closed Monday at $16.95 a share.

Canopy Growth

This is among the largest marijuana companies based on market capitalization. Canopy Growth Corp. (NYSE: CGC) engages in the production, distribution and sale of cannabis for recreational and medical purposes primarily in Canada, the United States, Germany and the United Kingdom.

The company’s products include dried cannabis flowers, oils and concentrates, and softgel capsules. It offers its products under the Tweed, Quatreau, Deep Space, Spectrum Therapeutics, First & Free, TWD, This Works, BioSteel, DNA Genetics CraftGrow, Tokyo Smoke, DOJA, Van der Pop, and Bean & Bud brands.

The company also provides growth capital and a strategic support platform that pursues investment opportunities in the global cannabis sector. Canopy Growth has a clinical research partnership with NEEKA Health Canada and NHL Alumni Association to examine the efficacy of CBD-based therapies as part of the mitigation of persistent post-concussion symptoms.

Note that beverage giant Constellation Brands is Canopy’s largest shareholder after a $4 billion investment in 2018. That could grow to over 50% ownership with the exercise of additional warrants in the coming years.

BofA Securities has a Buy rating and a massive $59.39 price target on the shares. Again, no consensus target was available. The stock closed at $31.24 on Monday.

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