U.S. investment banks are increasingly devoting resources to covering the cannabis industry, including American operators. Today, independent investment bank, capital advisory and research firm Seaport Global, with offices in New York and New Orleans, released a 208-page report that included a primer as well as initiation reports on a dozen cannabis companies. Analysts Brett Hundley, CFA, and Luke Perda issued reports on both Canadian and American companies.
We are formally launching coverage of the global cannabis space. This exciting market area is evolving quickly, with hundreds of public companies coming to market in recent years. There is clear momentum behind the legalization of cannabis, around the world. 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.
Brett Hundley, equity research analyst, and Luke Perda, equity research associate, at Seaport Global
From a little over $12B in global value today, we see the market ultimately evolving to almost $630B in due time. We expect the market to largely bifurcate into (1) a retail dispensary model built around recreational use, and (2) CPG/pharma products offered for therapeutic use in traditional channels. Ultimately, we see the greatest potential for cannabis as a value-added ingredient.
The firm initiated coverage on Aurora Cannabis (TSX: ACB) (NYSE: ACB), Canopy Growth (TSX: WEED) (NYSE: CGC) and Tilray (NASDAQ: TLRY) with “neutral” ratings and no price targets, with the balance of its coverage receiving “buy” ratings. The other companies included Acreage Holdings (CSE:ACRG) (OTC: ACRGF), Aphria (TSX: APHA (NYSE: APHA), Curaleaf Holdings (CSE: CURA) (OTC: CURLF), Green Organic Dutchman (TSX: TGOD) (OTC: TGODF), Green Thumb Industries (CSE: GTII) (OTC: GTBIF), HEXO Corp (TSX: HEXO) (NYSE American: HEXO), iAnthus Capital (CSE: IAN) (OTC: ITHUF), KushCo Holdings (OTC: KSHB) and MedMen Enterprises (CSE: MMEN) (OTC: MMNFF).
The analysts have also compiled state profiles for all 50 states and projected market size for 106 countries. They also segmented over 100 public companies by various market verticals and have studied the hemp-CBD market and the U.S FDA approval process for ingredients. The report is available to clients of Seaport Global.
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