A Canadian banking firm has kicked off its coverage of the US cannabis space by selecting its first multi-state operator (MSO) securities to cover.
The US growth seen from investments in the US cannabis market players has led to a flock of investor attention to south of the border. As such, Echelon Wealth Partners has moved forward with the launch of its coverage for this sector.
The financial institution began its analysis of the alluring sector and assigned some targets for a selection of companies.
Using a projection of the average cannabis user rate across the whole country — with the average spending currently seen — Echelon Wealth forecasted the US cannabis market to be worth US$60 billion.
The institution assigned a “buy” recommendation to GTI, while Columbia Care and Cresco Labs each earned a “speculative buy” rating.
The research note designated one-year price ratings of C$24, C$11.50 and C$15 respectively for the MSOs.
Matthew Pallotta, equity research analyst at Echelon Wealth Partners, is the analyst assigned by the firm to cover these companies.Pallotta joined Echelon Wealth in March, but has been covering cannabis stocks for over three years now.
In an exclusive interview with the Investing News Network (INN), Pallotta revealed some of the trends he is seeing in this space.
When asked which markets in the US piqued his interest the most right now, Pallotta highlighted Florida, New York, Nevada and Illinois as the states at the top of his watch list.
Despite the federal illegality of marijuana in the US, the industry has flourished thanks to the opening of markets by way of state-level programs protected from federal prosecution.
A sweeping marijuana legalization effort from the federal powers in the US has been suggested, but doesn’t seem likely anytime soon.
The analyst explained — in his view — how MSOs are trading at a discount compared to the Canadian companies dominating the marijuana stock market.
While many experts agree on the premium seen between Canadian and US names, Pallotta expects to see that gap close down even before the development of crucial policies in the US.
“I think the discount is probably going to close regardless once people start seeing the revenue numbers these businesses are putting up,” Pallotta told INN.
However, despite this prediction, Pallotta is anticipating the passing of bills — such as the STATES Act — will represent the boom for MSOs. The STATES Act is a proposed federal bill that would permit the states to decide how to openly operate cannabis programs throughout the country.
When it comes to the disparity between US-based cannabis MSOs and the Canadian leaders, which have seen an early lead to senior US exchanges — something still unavailable to MSOs due to the federal illegality of the drug — Pallotta said the business fundamentals of MSOs is strong enough to help close the difference.
Despite these projections, Pallotta is not discounting the Canadian names known to marijuana investors due to the support thrown to Canadian companies by institutional investors looking for legal marijuana exposure.
“There’s institutional money that, because of those rules and whether they like the US players or not, won’t be able to go in,” he said.
“Clearly we are moving now in a period where there was a lot of focus on US marijuana firms,” Jos Schmitt, president and CEO of the Toronto-based NEO Exchange, told INN. “There’s a lot of interest in that space.”
Don’t forget to follow us @INN_Cannabis for real-time news updates!
Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
As investors continue to prioritize cannabis opportunities in the US, market watchers expect mergers and acquisitions (M&A) to play a role in the future for Canadian companies.
A consolidation trend has been expected in the Canadian cannabis space for some time now based on the size of the market compared to the number of operations in the country.
BioHarvest Sciences Inc. Unveils the Unique Polyphenolic Content of Its Upcoming Olive-Based Nutraceutical
The product will include polyphenols known to have significant health benefits.
BioHarvest Sciences Inc. (CSE: BHSC) (“BioHarvest” or the “Company”) has reached an important milestone in its development program of additional Nutraceuticals. The olive-based Nutraceutical product scheduled for market availability in the second half of 2022 will contain the following unique matrix of polyphenols: hydroxytyrosol, trosol, and verbascoside. These compounds are the major polyphenols in naturally grown olives and are responsible for the high antioxidant activity of olives and olive oil. Importantly, the BioHarvest olive-based Nutraceutical product will provide all the benefits of olives and olive oil with a low calorie count per serving.
Cresco Labs (CSE:CL) (OTCQX:CRLBF) (“Cresco” or the “Company”), one of the largest vertically integrated multistate cannabis operators in the United States, announced today that it will report financial results for the fourth quarter and full year ended December 31 st , 2020 on Thursday March 25 th , 2021 before the market opens.
The Company will host a conference call and webcast to discuss its financial results and provide investors with key business highlights on Thursday March 25 th , 2021 at 8:30am Eastern Time (7:30am Central Time).
Canopy Growth to Participate in BofA Securities Virtual Consumer & Retail Technology Conference on March 11, 2021
Canopy Growth Corporation (TSX: WEED) (NASDAQ: CGC) (“Canopy Growth” or “the Corporation”) announced today that EVP & CFO Mike Lee will be participating in a fireside chat at the BofA Securities Virtual Consumer & Retail Technology Conference on Thursday, March 11, 2021 at 9:30am ET .
Hill Street Beverage Company Inc. (TSXV: BEER) (“Hill Street” or the “Company”). The Company announces that further to its press release dated March 2, 2021, it has obtained TSX Venture Exchange approval to extend the closing date of its previously announced private placement of units (“Units”) until April 7, 2021. Each Unit is comprised of one (1) common share and one (1) warrant, exercisable for one common share at price of $0.11 per share, for a period of three (3) years from the date of Closing. The Company applied to extend the date of closing to allow a greater number of interested investors to participate.
For more information regarding the Company or the offering, please contact email@example.com, or