A Wall Street bank has officially initiated coverage of cannabis stocks, as high-flying cannabis companies have caught the attention of both the Main Street and Wall Street following a wave of marijuana legalization.
Last year was a historic one for legal-marijuana proponents. Canada and the state of Michigan legalized the recreational use of marijuana, and the US Congress passed the Farm Bill, which legalized hemp, a key source of the ingredient cannabidiol.
Additionally, major marijuana producers such as Cronos Group, Canopy Growth, Tilray, and Aurora Cannabis were listed in the US last year, prompting investors, especially younger ones, to pour money into the industry. On Robinhood, a free-trading app popular among millennials, Aurora has outranked all other stocks including Apple in terms of the number of users who own shares.
As the demand for market insights into marijuana stocks grows, Jefferies analysts Owen Bennett and Ryan Tomkins have started to write sell-side notes on popular weed companies. Jefferies is the second major Wall Street investment bank to cover the industry, after Cowen.