With investors feeling kicked while they were down, there may be some new caution and at least some expected upside for investors in the legalized cannabis stocks and the sector as a whole. The Dow Jones industrial average and the S&P 500 have hit new all-time highs this week, but don’t think that same milestone applies to the stocks and exchange-traded funds (ETFs) in the legalized marijuana theme. These have generally seen brutal sell-offs from their 2018 or 2019 highs. Some of those sell-offs have been brutal enough to leave many investors wondering if there will be a light at the end of tunnel — and if that light will be a freight train or an all-clear sign.

Tuesday’s list of top analyst upgrades and downgrades was very lengthy, with many companies getting post-earnings reviews. There was a non-earnings driven sector-related call out of Cantor Fitzgerald covering the cannabis stocks. Unfortunately for the entrepreneurs looking for hemp-induced riches and those who are bullish on the “weed stocks,” Cantor Fitzgerald did not exactly issue unilateral endorsements for all the big names in the group with huge upside predictions that investors have seen from other firms.

24/7 Wall St. has covered some of the basics of the calls from analyst Pablo Zuanic at Cantor Fitzgerald. U.S. price targets were included if available, and any available consensus data is from Refinitiv.

While no individual analyst report should ever be used as a standalone reason to buy or sell sector ETFs or individual stocks, sometimes the external research reports are the only view with formal revenue or earnings expectations for investors to peak into these companies. Also note that any calls in this sector in particular would be even more speculative than most of the more well-known speculative stocks.

A separate report from Merrill Lynch notes legalization efforts are still in play in Mexico, despite a deadline being missed. The Merrill team noted an extension until April 30, 2019. Its report, which included no individual stock recommendations, said:

Per Marijuana Business Daily, one of the key roadblocks to passing legislation by the Supreme Court deadline has been external pressures from businesses that want to participate in cannabis in Mexico given current proposals seek to give licensing preference to low-income individuals, small farmers, and indigenous people, rather than larger businesses or private companies. While this deadline was recently missed, creating potential that legalization would be delayed to an unknown date, Mexico’s Supreme Court just granted a 6 month extension for Congress to legalize all forms of cannabis. In the decision, the court wrote that, “exceptionally and for one time only” and, considering the complexity of the issue, it has granted an extension until April 30, 2020, for Mexico’s Congress to complete legislation.

Here is a look at how some of the individual legalized cannabis stocks were assigned coverage at Cantor Fitzgerald.

Aphria Inc. (NASDAQ: APHA) was assigned a new Overweight rating, and the Canadian (C$10.40) price target implied upside potential of about 50%. Aphria’s shares were shown to be at discount valuation to peers, even after adjusting for a lower margin wholesale operation in Germany. Its U.S. shares were last seen trading up 2.8% at $5.27 on Tuesday. Aphria has a 52-week trading range of $3.75 to $13.45.

OrganiGram Holdings Inc. (NASDAQ: OGI) was assigned a new Overweight rating, and the Canadian target price (C$17) implied more than 200% upside, based upon more store openings and further deregulation in the year ahead. Its shares were last seen trading up almost 5% at $3.42. It has a 52-week range of $2.71 to $8.44, and its market cap is barely $500 million.

Aurora Cannabis Inc. (NYSE: ACB) was assigned a Neutral rating, and the Canadian price target (C$5.10) implied close to 10% upside from its prior C$4.72 close. Still, its U.S.-listed shares were up 5% at $3.80 in midday trading after the calls. While the analyst sees more positive catalysts than negative, he also sees better upside elsewhere in the sector. The U.S.-listed shares have a 52-week range of $3.40 to $10.32, but they briefly traded above $12.00 in September of 2018. Aurora Cannabis is almost back to a $4 billion market cap.

Canopy Growth Corp. (NYSE: CGC) was started with a Neutral rating, but the shares were up almost 0.5% at $20.25 on Tuesday. It has a 52-week range of $17.89 to $52.74 and is still the sector leader, with a $7.2 billion market cap.

Tilray Inc. (NASDAQ: TLRY) was started as Neutral with a $20 target price. Shares closed up 2.2% at $22.10 on Monday, and the prior consensus target price was $38.42. Its market cap is roughly $2.2 billion after a 3.5% gain to $22.88. Tilray has been the poster-child of pain in the legalization trade, with its 52-week trading range of $20.20 to $142.84. To add insult to injury, this stock was challenging $150 and much higher back in September and October of 2018.

HEXO Corp. (NYSE: HEXO) was given a new Underweight rating at Cantor Fitzgerald, but its U.S.-listed shares were up 1.4% at $2.10 in midday trading on Tuesday. Its 52-week range is $2.00 to $8.48, but it has only traded in the United States since late in January of this year.

Several exchange-traded funds (ETFs) track the legalized marijuana sector as well. These were up during the midday trading on Tuesday, but a special view on their respective 52-week ranges (or less) should show just how much these have come off their highs.

The ETFMG Alternative Harvest ETF (NYSE: MJ) was up 0.9% at $19.77 on Tuesday, and its 52-week range of $18.07 to $39.25 should show how the sector has performed.

There is also the AdvisorShares Pure Cannabis ETF (NYSE: YOLO), which has much lower average daily volume than the ETFMG version of the “weed ETF.” It was last seen up 0.9% at $13.37, down from a peak of $26.50 shortly after it began trading in April of this year.

The Cannabis ETF (NYSE: THCX) that just launched this summer was last seen up 1.6% at $15.36, and the recent low of $14.55 from October 14 and a more recent low of $14.80 are both down from a high of $24.84 that was put in on its second day of trading, July 10, 2019.

Again, investors and traders alike should never just look at just one outside research report as the sole basis for making any investment decision. The proof of that pain over time can be seen by revisiting a rival report that was far more bullish and identified another firm’s top cannabis stocks for 2019.

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