Companies and Brands

Analyst Names Top Legalized Marijuana Stocks for 2019

Jon C. Ogg

Published: January 8, 2019 1:05 pm

Last Updated: January 31, 2020 2:22 am

The world of legalized marijuana and cannabis sales is expected to keep growing. A 2019 forecast report from Cowen now projects even stronger growth from this industry in the decade ahead.

Vivien Azer, a managing director and senior research analyst for Cowen, specializes in the beverage, tobacco and cannabis industries. She is considered to be the first senior Wall Street analyst to cover the emerging cannabis segment.

Back in April of 2018, Azer projected that there could be cannabis sales of roughly $75 billion by 2030. At that time, she maintained Outperform on KushCo Holdings, Canopy Growth and Leaf Group. The adjusted figure is now for U.S. sales to reach $80 billion by 2030, assuming national availability. The casualty here is forecast to be beer sales. While the marijuana industry is growing in the United States, there actually has been a slowing in sales growth in Colorado and Washington, two early-adopter states.

Canopy Growth Corp. (NYSE: CGC) and Tilray Inc. (NASDAQ: TLRY) were both mentioned with Outperform ratings and as overcoming supply problems that hurt in the fall of 2018 when recreational marijuana became legal in Canada. While the annual outlook for cannabis has sales projections, the rapid growth and high spending are expected to result in net losses for the industry in 2019.

Canopy is projected in the report to reach sales of 239 million Canadian dollars (about US$180 million) in its fiscal year that will end in March of 2019, but the company is projected to have annual sales of 778 million in fiscal year 2020.

Azer believes that Tilray sales could reach $120 million in 2019 and that its shares could rise to as much as $150. If she is correct, that would be a doubling of its stock price.

Shares of Canopy Growth were last seen trading up just 0.5% at $29.04. Its 52-week range is $16.74 to $59.25.

Tilray shares were trading up almost 10% at $78.80 on Tuesday, in a 52-week trading range of $20.10 to $300.00.

KushCo Holdings, which sells packaging for the cannabis industry, also was rated as Outperform. Its over-the-counter shares were indicated down 0.5% at $5.98, in a 52-week range of $3.76 to $8.51.

There is also a cannabis-related exchange traded fund called the ETFMG Alternative Harvest ETF (NYSEARCA: MJ). Its shares were last seen trading down two cents at $27.82 on Tuesday. Its share price closed out 2018 at $24.94.