Seaport Global analyst Brett Hundley initiated coverage of the following cannabis stocks with Buy ratings:
- Aphria Inc APHA 3.85%, $18 target.
- Hexo Corp HEXO 1.7%, $12 target.
- Green Organic Dutchman Holdings Ltd TGODF 1.22%, $10 target.
- KushCo Holdings Inc KSHB 2.97%, $10 target.
- Medmen Enterprises Inc MMNFF 0.06% $7 target.
- Green Thumb Industries Inc GTBIF 0.67%, $16 target.
- Acreage Holdings Inc ACRGF 0.33%, $42 target.
- iAnthus Capital Holdings Inc ITHUF 2.11%, $11 target.
- Curaleaf Holdings Inc CURLF 1.07%, $10 target.
Seaport also initiated coverage of the following stocks with Neutral ratings (no targets):
Hundley projects the global cannabis market will be worth $630 billion by 2040, including a potential $94 billion U.S. market if cannabis is federally legalized.
“We expect many countries, including the US, to go legal within the next handful of years, and we think that this will create a considerable forward opportunity for the burgeoning industry that is regulated, legal cannabis,” Hundley wrote in the note.
He said the U.S. market will likely bifurcate into two types of businesses: a retail dispensary model that centers around recreational cannabis consumption and a pharmaceutical treatment model centered around established medical channels.
While Hundley is bullish on the cannabis space as a whole, he is least optimistic about some of the hottest U.S.-listed stocks in the near term given their huge runs and bloated valuations. U.S.-listed Canopy Growth, Tilray and Aurora Cannabis are the only Neutral-rated names under coverage. Instead, Hundley said his top stock picks are Hexo, Aphria, Acreage Holdings and Green Organic Dutchman.
The ETFMG Alternative Harvest ETF (MJ) was trading at $36.24 per share on Friday morning, up $0.13 (+0.36%). Year-to-date, MJ has gained 11.42%, versus a 5.03% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of Benzinga.