U.S. cannabis stocks jumped on Wednesday after an analyst at Jefferies called them “a generational wealth opportunity.”
Analyst Owen Bennett launched coverage on seven U.S. growers with Buy ratings: Curaleaf (CURLF), Green Thumb Industries (GTBIF), Trulieve Cannabis (TCNNF), Cresco Labs (CRLBF), Columbia Care (CCHWF), TerrAscend (TRSSF), and Ayr Wellness (AYRWF).
Columbia Care stock popped 5.6% on Wednesday, Cresco shares were up 2.7%, Trulieve stock was up 1.7%, and Ayr Wellness stock closed up 1.2%. Curaleaf stock was up 0.3%, while Green Thumb shares were up 0.1%. Of the group, TerrAscend stock was the only one that fell, closing down 5.8%. The AdvisorShares Pure US Cannabis exchange-traded fund (MSOS), which provides exposure to U.S. growers, was up 0.6%.
Bennett thinks U.S. industry annual retail sales of $17.2 billion in 2020 will reach $36 billion by 2025, and $64 billion by 2030. He thinks growth will be driven by conversion from the illicit market to the legal market, the increasing normalization of cannabis use, and the disruption of the alcohol and pharmaceuticals industries. He assumes national penetration can hit 30%, with annual spending per user at $1,750—compared to Colorado at $2,683 and alcohol at $1,378. Such assumptions equate to a market of $172 billion, according to Bennett.
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Known for solutions that yield results, Seth Yakatan has completed or advised on acquisitions and corporate finance transactions totaling over $3 billion. He is CEO of Katan Associates International—a financial strategy and merchant banking firm specializing in commercialization and asset monetization—especially those within life-science and e-commerce sectors.