- Cowen, the first major Wall Street bank to follow marijuana stocks, has been publishing recommendations on Canopy Growth and Tilray, and on Tuesday added Cronos Group and Aurora Cannabis to its coverage.
- The four Canadian cannabis producers were listed in the US last year, prompting investors to pour money into the industry.
- Also in the last year, a wave of recreational-marijuana legalization has triggered companies in other fields, such as beverage and tobacco, to enter the space.
Cowen, the first major Wall Street bank to follow marijuana stocks, on Tuesday added two popular names to its coverage universe.
The four Canadian cannabis producers were listed in the US last year, prompting investors, especially younger ones, to pour money into the industry. On Robinhood, a free-trading app popular among millennials, Aurora has outranked all other stocks in terms of the number of users who own shares.
Also in the last year, a wave of recreational-marijuana legalization – including in Canada and the state of Michigan – has triggered companies in other fields, such as beverage maker Constellation Brands and tobacco giant Altria to enter the space. Constellation Brands and Altria invested in Canopy and Cronos respectively.
Driven by the strong demand for insight into marijuana stocks, Cowen’s Vivien Azer became the first Wall Street senior analyst to cover the emerging cannabis sector, and leads the marijuana research team at the firm.
Last month, Jefferies became the second major Wall Street bank to track the industry, initiating coverage on seven cannabis companies.
Price target: 29 Canadian dollars
Potential upside: +1.5%
“Through its partnership with Ginkgo Bioworks, CRON aims to produce eight target cannabinoids (including rare strains such as THCV) at a fraction of the current cost, at commercial scale and at a higher purity than what is currently available. While Aphria’s investment provides significant additional financial capacity and operational capabilities to expand distribution, investments needed to expand its global footprint will likely prevent meaningful profitability over the next few years.”
Price target: 14 Canadian dollars
Potential upside: +46%
“With the largest physical presence outside of Canada among the LPs, ACB is also well positioned to capture share in the $US31 bn international medical market. Further, efficiencies from its large- scale production network and near-term operating leverage will allow ACB to be among the first Canadian cannabis companies to reach profitability.”
A Wall Street bank just started covering 7 marijuana stocks. Here’s what it’s saying.
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