The rest of the media might not pick this up, but this is a big moment for cannabis stocks…
Vivien Azer – the Managing Director of Cowen Inc. (Nasdaq: COWN) – may have started a huge wave of new investments in the cannabis industry.
She’s a formidable analyst who just predicted Cresco Labs Inc. (CSE: CL, OTC: CRLBF), Green Thumb Industries (CSE: GTII, OTC: GTBIF), and Curaleaf Holdings Inc. (CSE: CURA, OTC: CURLF) would outperform the market. She expects Acreage Holdings (CSE: ACRG, OTC: ACRGF) to perform with the market and MedMen Enterprises Inc. (CSE: MMEN, OTC: MMNFF) to underperform.
Anyone should at least read her report, even if they end up disagreeing with her.
But the big news isn’t that she just rated cannabis stocks.
It’s that these are U.S. cannabis companies that “touch the leaf,” and that Cowen was willing to rate them.
As best I can tell, this is the very first time that a major Wall Street firm has rated stocks that are technically in violation of U.S. law.
Previously, Ms. Azer and her counterparts at Merrill Lynch, Jefferies, Piper Jaffrey, and other Wall Street companies only rated “fully” legal companies. That means producers in Canada and U.S. companies that did not touch cannabis directly, like KushCo Holdings Inc. (OTC: KSHB).
I’ve previously written that these Wall Street firms would not begin to cover the U.S. participants until there was some movement by the federal government towards legalization.
Azer and the compliance team at Cowen proved me wrong.
The Importance of Wall Street Accepting Cannabis Stocks
Azer and Cowen showed a lot of courage to do what they did by rating stocks.
Cowen is a highly-regulated investment bank. It has to satisfy federal regulators from multiple agencies, and it has to be completely compliant in all of its dealings. Recommending the purchase of stock in a federally illegal business could upset relationships with regulators.
But the courage from Cowen will spur others to act.
Expect even larger investment firms, like Merrill, to include U.S. companies in their cannabis coverage in the next few weeks.
That’s because when big institutional investors start buying cannabis stocks, they are going to call places like Cowen. Sure, they do their own research, but that often starts with a call to someone like Vivien asking, “Hey, what do you think of Cresco?”
Armed with those analyst reports and with the fact that the investment banks are willing to publish them, portfolio managers will start to go to their boards and explain that they have to get into the cannabis investing area.
They can’t continue to ignore the fastest-growing industry in the world because their peers are no longer ignoring it.
It’s a simple fact that when a new investment opportunity opens up, you don’t want to be the one that gets left behind.
As I’ve written before, it is these big, long-term investors who will provide a lift for cannabis stocks once and for all. When demand for cannabis stocks increases because of the purchasing power of these huge institutions, prices will skyrocket.
The day when that happens may be a little closer now, thanks to Vivien Azer.
Executive Director, National Institute for Cannabis Investors
P.S. In less than six months, the cannabis IPO record has been broken three times. The record-holder to date is Curaleaf, IPO’ing at $4.5 BILLION. That number – combined with Azer’s prediction – may mean you’ve missed your shot at pocketing major cash on Curaleaf, but our experts have identified six companies with the potential to create up to $5 billion each in new wealth for investors. But for a chance to get the kind of returns you could’ve seen on Curaleaf, you need to learn more before these companies IPO.
20 responses to “U.S. Cannabis Companies Receive Crucial Recognition from Cowen”
September 17 2019