This is a list of two new cannabis stocks that are poised to rocket higher once the smoke clears from the new US administration. Both of these companies are in the early stages of development, and both have the potential to be a big winner in the cannabis space. Both are still relatively unknown, however.
With the growing support for marijuana legalization, investors have found themselves in the green-light if they are looking to capitalize on a burgeoning industry. In fact, the cannabis industry has more potential to gain than any other industry right now. In the future, marijuana revenues could rival those from tobacco, alcohol, and even the entire Healthcare industry, if the trends continue.
It’s one of Wall Street’s best-kept secrets – a sought-after market anomaly that helps investors track the movement after a company reports unexpected profits. And it seems like a good time to apply that strategy to the cannabis sector, after two of the most interesting stocks in that sector beat expectations for the fourth quarter. I’m talking about post-announcement earnings drift (PEAD) – the tendency of stocks that beat earnings expectations to produce higher returns in the weeks and months that follow. Here are some details from Wikipedia. Once a company’s current earnings are known, the content of the information should be quickly assimilated by investors and incorporated into the effective market price. However, it has long been known that this is not exactly how it works. For companies that announce good news in their quarterly results, their abnormal stock returns tend to rise for at least 60 days after the results are announced. Similarly, abnormal returns on stocks of companies that announce bad earnings news tend to drift downward over a similar period. This phenomenon is called post-advertising drift. Chart from Wikipedia 
2 cannabis stocks exceed earnings estimates by 144%
Trulieve Cannabis Corp (CSE:TRUL, OTC:TCNNF) is one of the largest cannabis stocks in the United States, with a market value of $5.5 billion. Florida-based Trulieve is betting on Florida’s rapidly growing medical cannabis industry. Trulieve has 78 dispensaries in Florida and 1.9 million square feet of growing capacity. Trulieve is taking advantage of Florida’s rapidly growing medical cannabis market. Trulieve has just reported impressive fourth quarter results that have exceeded expectations. Earnings of $0.33 per share beat analysts’ consensus estimates of $0.24 by 40%. According to PEAD, Trulieve shares are expected to rise in the coming weeks and months as investors appreciate the good news. Meanwhile, Trulieve’s shares were on fire. Trulieve has grown 650% in the last year, along with the wider cannabis sector. 2-year plan Trulieve Cannabis Corp (CSE:TRUL,OTC:TCNNF) 
Green Thumb Industries (CSE: GTII, OTC: GTBIF) is also one of the largest cannabis companies in the U.S., with a market value of $6.5 billion. Green Thumb, which is headquartered in Chicago, Illinois, plays an important role in the American cannabis industry. Green Thumb operates in 12 states and is licensed for 97 retail locations and 13 manufacturing facilities. Green Thumb just released its fourth quarter results, which also exceeded expectations. Earnings of $0.11 per share beat analysts’ consensus estimate of $0.05 by 103%. According to PEAD, Green Thumb’s stock is expected to rise in the coming weeks and months as the good news is reflected in its share price. Green Thumb’s shares are also on the rise, up over 500% in the last 12 months. Going forward, PEAD stock should benefit from investors conveying good news to the stock price. Green Thumb Industries 2-year plan (CSE: GTII, OTC: GTBIF) 
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Earnings drift after announcement is the tendency of stocks to beat earnings expectations in the weeks and months that follow. Trulieve and Green Thumb are two early leaders in the cannabis industry that have just exceeded profit expectations. According to PEAD, both stocks are expected to move higher in the coming weeks and months as investors appreciate the good news on stock prices. Discover what else we have in our model portfolio and receive our trade alerts! Best,Michael Water Editor, Cannabis Effects Trading
Author Michael Vodicka owns shares in Green Thumb Industries (GTBIF).
About the author and cannabis stock trading
Michael Wodicka is an equity analyst with over 20 years of trading and investment experience. His research has received attention in some of the industry’s most respected publications. He has been investing and managing investors in the cannabis sector since 2013. 
Mr. Vodicka offers his experience and advice to Cannabis Stock Trades members. Sign up for Cannabis Stock Trades and receive exclusive analysis from Mr. Water, trade alerts and a sample portfolio.
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