Canopy Growth shares move higher after another Wall St brokerage backs it

US brokerage Piper Jaffray has begun covering cannabis producers helping boost the share price of listed players in the sector.

Canopy Growth climbed higher once again on Friday, after investors were imbued with confidence in the future of the burgeoning cannabis sector following an announcement by US brokerage Piper Jaffray that it has begun covering the industry.

The news sees Piper Jaffray join a growing list of brokerages watching the cannabis sector, which has helped other listed players share prices rise as investors grow in confidence about the industry.

Tilray and Canopy Growth receive overweight ratings

In a note to investors on Tuesday Piper Jaffray analyst Michal Lavery set overweight ratings for two Candada-based cannabis companies Tilray and Canopy Growth, forecasting strong growth for industry in 2019.

‘We do believe the long-term growth opportunities are significant — both from transitioning illicit trade to legal sales, medical sales, and from transitioning sales in health & wellness categories to CBD-infused products,’ he said.

‘While timing of further changes is difficult to predict, the pace of further legalization appears to be accelerating’

High times for Canadian cannabis companies

Shares in Canopy Growth and Tilray have ended the week on a high, cup 5% and 22% as of 4:21pm GMT on Friday.

Analysts believe that the sector has huge potential, with Cowen analyst Vivien Azer believing that US cannabis sales will soar to $80 billion by 2030, with Lavery sharing similar sentiments for the Canadian market.

‘We expect legal recreational marijuana to source from illicit trade and could attract new users to the category, while THC-infused drinks could source share from alcoholic beverages,’ Lavery added.

‘Medical cannabis can replace a variety of products (e.g. pain relief, sleep aid, opioid replacement). CBD-infused products (with non-psychoactive properties) could gain share from food, beverage, and personal care categories.’

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