Piper Jaffray raises target price on Canopy Growth as analysts continue bullish wave with Canada’s number one cannabis company

Analysts continue to be bullish on Canopy Growth Corporation (TSX:WEED) (NYSE:CGC) with Michael Lavery and Jeffrey Kratky of the Minnesota-based Piper Jaffray being the latest to raise its stock price target on Canada’s number one Licensed Producer. The two maintained an Overweight rating on the company, raising the target price from $40 to $60.

Canopy, which has been on a 64 percent run since the beginning of 2019 saw its U.S.-listed shares creep up 2.2 percent in the pre-market hours. In comparison, the S&P 500 has gained 5.4 since the new year began.

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"We believe the long-term growth can be significant — both from transitioning illicit trade to legal sales, medical sales, and from transitioning sales in health & wellness categories to CBD-infused products," Lavery and Kratky wrote in a note to investors.

Canopy Growth continues to rise, beating out the S&P 500

The two focused in on Canopy’s plans to expand in the hemp market. The company recently announced that it had received a legal hemp license in New York, with the two analysts calling it "a tangible first step forward in the U.S. that points to the beginning of a long U.S. growth trajectory."

Canopy Growth plans to invest upwards of $150 million into their new hemp facility in the state.

They continued: “Canopy has hemp-specific IP, cash reserves, and technical expertise that should position it well in the US hemp and CBD market. Though we do not yet have more specifics on its plans, we believe this tangible step into the U.S. is a clear positive and makes us more bullish on its outlook for sustainable growth.”

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Piper called for the global cannabis market to reach anywhere from $250 billion to $500 billion in the long term and $15 billion to $50 billion in the near future.

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