By Ciara Linnane, MarketWatch
Both states are also being hurt by a lack of legal dispensaries in some markets due to license challenges and local pushback, he wrote.
But Canaccord remains upbeat on the U.S. sector, noting that two recent industry reports from ArcView Research and BDS Analytics had actually raised their estimates for 2020 to 2024 sales growth. The reports found U.S. cannabis sales totaled more than $12 billion in 2019, up 23% from 2018 despite all the challenges.
The steep selloff in stocks now offers an investment opportunity, he wrote, with the macro environment improving, state expansion legislation progressing and the negative headlines from last year’s vaping illness beginning to fade.
“We continue to expect the upcoming election to be a potential catalyst for cannabis stocks with as many as 15 states expected to have ballot initiatives related to cannabis program expansion in one form or another,” said Burleson. “With the average stock in the space currently trading at a significant discount to the levels of 2019, we believe the underperformance for stocks last year presents an opportunity for investors at current levels (average EV/EBITDA multiple is 5.5x 2021 CG estimates and EV/revenue multiple is 1.5x 2021E).”
Will Investors Turn to Cannabis for a Spark?
On "MarketBrief," Caroline Woods speaks with Canopy Growth founder Bruce Linton about the intersection of Wall Street and the cannabis industry.
Elsewhere in the sector, Cronos /zigman2/quotes/206842762/composite CRON -1.90% was down 2%, Aphria was down 3%, Hexo /zigman2/quotes/206508254/composite HEXO -2.77% /zigman2/quotes/200008967/delayed CA:HEXO -2.05% was down 0.9% and Organigram /zigman2/quotes/209289540/composite OGI +0.64% was down 5%.
The ETFMG Alternative Harvest ETF /zigman2/quotes/204332491/composite MJ -1.39% was last down 0.2% and the Horizons Marijuana Life Sciences ETF /zigman2/quotes/208856346/delayed CA:HMMJ -2.25% was down 0.3%.
For all of MarketWatch’s cannabis coverage, click: Cannabis Watch