U.S. cannabis producers are gaining Wall Street preference over Canadian pot stocks


Cannabis is a hot topic on Wall Street right now and amid the rise of legislation across North America, the industry is likely to continue attracting investors for the foreseeable future. Interestingly, Wall Street analysts are taking a keen interest in U.S. cannabis producers, as opposed to Canadian cannabis companies.

Following the recent legalization of cannabis in New York State, along with the House approval of a bill that will grant industry businesses access to the U.S. banking system, pot stocks have swooned.

Nonetheless, reform efforts have not changed the fact that the cannabis sector is a highly volatile space for investors to dabble in; particularly since the plant remains illegal at the federal level in the U.S. 

On the other hand, the subject of cannabis reform is gaining serious momentum across the U.S, where states like New York, New Mexico, New Jersey and Virginia all passed adult-use cannabis laws this year.

Currently, according to Marijuana Business Factbook analysts, the value of the U.S. cannabis industry exceeds $18 billion. The Marijuana Policy Project confirms that 18 states have now legalized the plant for recreational purposes and 36 have allowed cannabis for medical reasons.

The U.S. cannabis stock market boasts four major MSOs 

Market sentiment is strong for U.S. producers. According to Wall Street analysts, there are “four big” cannabis multi-state operators (MSOs) that are piquing investor interest at the current time. They are as follows:

  1. Curaleaf Holdings Inc. “CURLF”
  2. Green Thumb Industries Inc. “GTBIF”
  3. Cresco Labs Inc. “CRLBF”
  4. Trulieve Cannabis Corp. “TCNNF”

Check out the favorability of the leading U.S. cannabis MSOs below:

Conversely, Wall Street’s “big five” Canadian producers are as follows:

  1. Canopy Growth Corp. “CGC”
  2. Aphria Inc. “APHA”
  3. Tilray Inc. “TLRY”
  4. Cronos Group Inc. “CRON”
  5. Aurora Cannabis Inc. “ACB”

In comparison with Wall Street’s “big five” Canadian producers, which have limited “buy” ratings, the “four big” cannabis MSOs in the U.S. boast impressive buy ratings and are highly recommended by analysts. 

You can see the ratings roundup for Canada’s five major producers in the image below:

Investors need to be aware of dividing line that separates U.S. cannabis stocks from Canadian pot stocks 

Although cannabis is still federally illegal in the U.S., stocks in this sector are continuously stealing the limelight over Canadian pot stocks. There is good reason for this: many of the most well-known companies in Canada are unable to sell their products in the U.S.

Shares of the five largest Canadian cannabis companies are publicly listed on U.S. exchanges, whereas shares of the four big U.S. cannabis MSOs are featured on Canadian stock exchanges, as well as numerous over-the-counter exchanges. The reason for this is because of the plant’s federally restricted status in the U.S. 

Although Wall Street analysts are more likely to recommend U.S. cannabis stocks, investors ought to consider the fact that the MSOs only maintain free rein only in the states that have legalized adult-use cannabis. Well, that is until federal law changes.