Benchmark downgraded the shares of Californian cannabis company KuschCo Holdings Inc. /zigman2/quotes/209165034/composite KSHB -12.33% to speculative buy from buy on Friday, and said it expects the still unexplained vape-related lung illness that has killed at least 33 people and sickened 1,479 more to weigh on financial performance. Analyst Mike Hickey cut his stock price target to $5 from $7 and said "elevated regulatory risk" is another potential pressure for the maker of vapes, packaging and other accessories. The stock has fallen 75% in 2019, while the ETFMG Alternative Harvest ETF /zigman2/quotes/204332491/composite MJ -2.77% has fallen 20% and the S&P 500 /zigman2/quotes/210599714/realtime SPX -1.40% has gained 19.6%. "We are positive longer term, as we note the vast majority of the THC related vape illness has come from black market; which could accelerate legal cannabis market regulation," the analyst wrote in a note to clients. "Near term, we are cautious over potential bans on the sale of vaping products, as was the view from Massachusetts that has enacted a 4-month block of all sales of e-cigarettes and supplies, including those for nicotine and cannabis." KushCo shares were down 0.8% in early trade.
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