5 Favorite Pot Stocks From Wall Street's Pioneer Cannabis Analyst

Cowen & Co.'s Vivien Azer is considered Wall Street's first cannabis industry analyst, having started coverage of the smoking hot market just two years before Canada legalized adult recreational use. Today, many major cannabis producers have generated outsized returns for investors and their stocks trade on the New York and Nasdaq exchanges. In that environment, Azer favors stocks that she views as having the greatest upside potential as cannabis use surges as it becomes fully legalized in more jurisdictions worldwide. "Ultimately, I view cannabis as a traditional consumer-staples category," says Azer, per a lengthy Barron’s interview. "The reality of legal cannabis is increasingly apparent with every new country that capitulates in its cannabis policy."

She recommends producers Aurora Cannabis Inc. (ACB), Canopy Growth Corp. (CGC), and Tilray Inc. (TLRY). She also expects two major conglomerates that own big stakes in cannabis producers such as Constellation Brands Inc. (STZ), and legacy tobacco maker Altria Group Inc. (MO) to benefit from the long-term growth of the industry. These companies represent a way to get in on the cannabis boom without directly investing in pot producers.

5 Stocks To Ride The Cannabis Wave

• Aurora Cannabis Inc. (ACB)
• Canopy Growth Corp. (CGC)
• Tilray Inc. (TLRY)
• Constellation Brands Inc. (STZ)
• Altria Group (MO)

Source: Cowen & Co., per Barron’s

Azer and nine other analysts at Cowen published their first comprehensive report on cannabis in September 2016, when she was the sole Wall Street analyst at a major firm covering the space. According to Barron's, she expects legal and illicit sales of marijuana in the U.S. to rise to $80 billion annually by 2030. In Canada, she expects 12 billion Canadian dollars in sales by 2025. And outside North America in the 43 countries that have either already, or are in the process of, legalizing the plant, she foresees a market as big $31 billion by 2025.