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.’
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Live prices on most popular markets
You might be interested in…
Find out what charges your trades could incur with our transparent fee structure.
Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.
Stay on top of upcoming market-moving events with our customisable economic calendar.