Melius Research Initiates Coverage of Cannabis Sector

News provided by

Mar 04, 2019, 08:33 ET

NEW YORK, March 4, 2019 /PRNewswire/ -- Melius Research (Melius), today announced that it has initiated coverage of the Cannabis sector, led by top-ranked analyst Rob Wertheimer, Head of Research for Melius.

Wertheimer's coverage includes companies emerging in Cannabis, with ratings on Aurora Cannabis, Canopy Growth Corporation, Cronos Group Inc. and Tilray, Inc. The initiation expands Melius coverage into a new sector, complimenting existing coverage across industrial tech, industrials, consumer and data.

"The trend towards legalization is broad and becoming unstoppable. Cannabis will affect, then disrupt the beverage industry. Its wide range of potential medicinal uses holds potential to take share in the over-the-counter and pharmaceutical industries over time. As the industry surges in growth, Canadian cannabis companies have a window, opened by that country's lead in legalization, which they can use to develop product, intellectual property, brand and distribution, reaching out into other, larger markets as legalization progresses. Our current view is that early leads are important in an industry that will develop and change quickly. As yet, most of that portfolio needed to capture sustained margin is in early stages or non-existent, making for a dynamic market with multiple layers of interacting uncertainties."

Highlights from the report include:

Expectation that the cannabis market can grow to US$100 billion in the Americas and Europe without further progress on legalization, which nonetheless remains likely. That market estimate builds up from consumer and academic usage surveys, pricing studies in legal and black markets, frequency of medical conditions addressable by cannabis across the US and EU member countries, and state-by-state and country-by-country legal frameworks. As legalization progresses, the market opportunity will expand beyond US$200 billion.
Overweight rating on Aurora Cannabis shares, reflecting the potential of initial lead in building out a network of production, distribution and alliances.
Neutral rating on Canopy Growth. Canopy's aggressive management, years in the industry, early capacity and distribution, along with a funding lead, all position the company well versus peers, with that position well recognized by investors.
Neutral rating on Cronos, with the recent Altria investment potentially kick-starting a web of growth and alliances.
Underweight rating on Tilray shares, with less clarity on future growth outside of Canada.

Rob Wertheimer will lead coverage of the cannabis sector. He brings more than a decade of research experience to Melius and has been recognized as a top machinery analyst by Institutional Investor at both Barclays and Morgan Stanley. Rob started his career covering beverage and retail across Latin America, working on a consumer team ranked by investors in both beverage and retail.

About Melius Research
Based in New York City, Melius Research was founded in October 2017 as an independent content firm focused on the industrials sector, consumer/industrials data analytics and corporate consulting.

The team of fifteen professionals includes top-ranked Multi-Industry analyst Scott Davis, Global Aerospace and Defense analyst Carter Copeland and Global Machinery analyst Rob Wertheimer. Melius' research offering is based on extensive cycle experience, differentiated and dedicated corporate access and a data-centric approach. Melius utilizes vast data sets and leading-edge analytics in their process in the journey to help clients make better-informed investment decisions.

For more information about Melius Research visit www.meliusresearch.com or follow the firm on Twitter at www.twitter.com/@meliusresearch.

Institutional Sales Contact:
Scott Weiss, Head of Sales
212.503.6203
[email protected]

Media Contact:
Christine Collins, Corporate/Media Relations
212.503.6204
[email protected]

SOURCE Melius Research