Wall Street Favorites: 3 Cannabis Stocks with Strong Buy Ratings for May 2024 

Cannabis stocks to buy could see higher highs.

For one, more Americans (about 88%) want to see cannabis legalization, according to a Pew Research poll. Two, the U.S. Drug Enforcement Administration just said it would reclassify cannabis as a Schedule III drug. Three, more U.S. states, including Florida, could legalize its use.

As noted by the Miami Herald, “The Florida Supreme Court has approved the ballot language of Amendment 3 that seeks to legalize adult-use cannabis in the November elections.”

We also have to remember that Germany just legalized its use, which could set off a chain reaction of further approval throughout Europe. 

In addition, Senate Democrats just introduced a bill to federally legalize cannabis. 

“It’s time for Congress to wake up to the times and do its part by passing the cannabis reform that most Americans have wished for. It’s past time for Congress to catch up with public opinion and to catch up with the science,” said Majority Leader Chuck Schumer.

With momentum growing, cannabis stocks to buy could easily see higher highs, including:

Curaleaf Holdings (CURLF)

Since bottoming out at around $3.80 in March, Curaleaf (OTCMKTS:CURLF) hit a high of $6.40. Now back to $5.87, I’d like to see it initially retest $6.40 again. 

For one, as noted earlier this week, “The recent legalization in Germany could have a domino effect across Europe, where CURLF has been expanding its footprint.”

Two, Alliance Global Partners just raised their price target on CURLF to C$12 from C$9.50, with a buy rating. The firm noted that CURLF “stands as one of the biggest beneficiaries” of rescheduling and potential Florida legalization. 

In addition, the Supreme Court’s decision to allow the legalization of cannabis to appear on ballots this November holds the key to unlocking a potential tripling of the total cannabis market in Florida to $6 billion in sales, as noted by Benzinga.com.

While the company did miss on EPS and revenue for the first quarter, we do expect for its numbers to improve as it expands its global footprint.

Innovative Industrial Properties (IIPR)

The last time I mentioned Innovative Industrial Properties (NYSE:IIPR), I said, “It’s technically oversold and starting to pivot higher. Two, it carries a safe yield of 7.73% at the moment.”

That was on April 23, with IIPR at $97 a share. Today, with a yield of 6.60%, the cannabis real estate investment trust (REIT) is up to $110.22. That was even after mixed earnings. While its adjusted funds from operations (AFFO) of $2.21 beat by 16 cents, revenue of $75.5 million – down 0.8% year over year—missed by $3.01 million.

Still, I believe that with cannabis sales set to improve, and interest rates likely to fall, bullish trends could push IIPR higher. 

In addition, the cannabis REIT owns 108 properties across 19 states with 8.9 million rentable square feet. Also, 95.2% of its portfolio is under a triple-net lease.

For now, as we wait for a potential cannabis boom to send IIPR higher, buy it and collect its yield for the time being.

Trulieve Cannabis (TCNNF)

Another one of the hottest cannabis stocks to buy is Trulieve Cannabis (OTCMKTS:TCNNF).

After dropping from about $14.50 to about $10.50, TCNNF appears to have caught strong support again and is starting to pivot. Last trading at $11.87, I’d like to see it initially retest its prior high of $14.50 again shortly.

Earnings were strong, with a first-quarter EPS loss of five cents beating by six cents. Revenue of $298 million – up 4.6% year over year – beat by $12.27 million. It also generated a free cash flow from operations of $139 million and a free cash flow of $124 million. 

We also have to consider that if Florida does legalize its use in November, TCNNF could benefit significantly. Alliance Global Partners even noted TCNNF is best positioned. Analysts at Needham also raised their price target on TCNNF to $14.50 with a buy rating. Even Canaccord just raised its price target to C$38, with a buy rating.

On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.