Cannabis Weekly Round-Up: Cowen Analyst Gives Top Pick

One major cannabis analyst gave her top stock pick this week as industry attention continues to converge on the path ahead for the US market.

Also this week, the CEO of Aphria (NASDAQ:APHA,TSX:APHA) gave an update on a critical merger and spoke about who holds the edge in the US in terms of American and Canadian cannabis operators.

Keep reading to find out more cannabis highlights from the past five days.

Analyst gives top pick as US market gains momentum

Vivien Azer, a managing director at Cowen (NASDAQ:COWN) who covers the cannabis space, told the Street she sees Green Thumb Industries (CSE:GTII,OTCQX:GTBIF) as the top cannabis stock right now.

“We think that Green Thumb has a really nice geographic mix and an attractive profitability margin,” Azer said, while also crediting Green Thumb with holding a license in New York, a market that is soon set to legalize recreational cannabis.

In the past, Azer has called for the cannabis industry to be worth US$40 billion.

When asked about the potential for legalization in the US, Azer pumped the breaks on any kind of sweeping policy taking over in the near future.

“We’re not calling for (legalization) in the 117th Congress, but we do think there is an opportunity to find bipartisan support for some improvement in the federal landscape,” she said.

Azer believes this type of policy change would allow cannabis companies in the US to obtain commercial banking and insurance services, and for these firms to secure listings on US-based senior exchanges.

Aphria CEO gives Tilray merger update

Aphria CEO Iriwn Simon went on CNBC’s Squawk on the Street show during 420 on Tuesday (April 20) to discuss all aspects of the cannabis business.

When asked about the recent voting delay from Tilray (NASDAQ:TLRY) shareholders, who need to make a decision on the company’s proposed merger with Aphria, the executive pushed back on the idea that the move is punt by investors, instead suggesting it is a necessary motivational manoeuver.

“Today with retail shareholders out there and apathy in voting it’s going to take a little longer in regards to getting the vote done,” said Simon. “We will get the vote done, I’m very confident of that.”

Simon also pushed back against the idea that US-based multi-state operators have the advantage over Canadian producers when it comes to US market domination.

“When legalization does happen, the new Tilray will be ready to make a major entry into the US markets,” Simon told the Squawk on the Street audience.

While the US doesn’t have a federal legalization framework in place, multi-state operators have been able to capture market share by going after states with cannabis programs that allow for the sale of medical or even recreational products.

Cannabis company news

• Neptune Wellness Solutions (NASDAQ:NEPT,TSX:NEPT)issued an update to investors, confirming its business transition into an integrated consumer packaged goods company with plans for new CBD product development for the US market. “Neptune’s future will be focused on brand creation, accelerated organic growth complemented by new acquisitions with operational excellence as our foundation,” the company said.

• TerrAscend (CSE:TER,OTCQX:TRSSF)confirmed an acquisition deal for three dispensaries in Pennsylvania at a value of US$70 million. Jason Wild, executive chairman of the firm, identified Pennsylvania as a “key focus” for TerrAscend.

• Charlotte’s Web Holdings (TSX:CWEB,OTCQX:CWBHF)obtained Health Canada approval to use its proprietary hemp cultivars for outdoor cultivation. This move will help make Charlotte’s Web products more readily available in Canada.

• Bhang (CSE:BHNG,OTCQX:BHNGF)announced a delay in its financial report for the year ended December 31, 2020. The delay is being caused by the illness of an auditor, and the company now expects to file its report by the end of May.

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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.