Cowen: Cannabis could become $80 Billion Industry by 2030

10:54 01/09/2019

The marijuana market may be bigger than first thought. Analysts at Cowen believe U.S. cannabis sales alone could hit $80 billion by 2030 – an $5 billion increase from earlier estimates. "We expect continued growth in newly established U.S. states, and more robust growth in Canada as more supply comes online and new form factors hit the market," analysts at Cowen noted. Among the likely beneficiaries, will be Tilray Inc. and Canopy Growth, which it believes will “finally start to see the true benefits of adult use sales and the lapping of upfront investments made in calendar 2018 to scale up ahead of adult use.” Such growth could give way to further M&A activity, too. Cowen analysts also argue that increased cannabis use could threaten to cannibalize consumption of other products, such alcoholic beverages. It’s why alcohol companies like Constellation Brands invested $4 billion in Canopy Growth. Molson Coors even listed legal cannabis among the biggest possible risks to its business in its annual shareholder report. Anheuser-Busch InBev (BUD) looks to be jumping on the bandwagon, too. In fact, it just partnered with cannabis company, Tilray Inc. in a $100 million deal to research cannabis-infused drinks for the Canadian market. Tilray Inc. also just announced a global partnership with Sandoz AG, a division of Novartis to develop and distribute medical marijuana around the globe. With sizable cannabis growth in store, and a higher likelihood of falling alcohol sales, we’re likely to see further investments from major companies. “Hypothetically you take a consumer that on a beer occasion would have three or four beers and then add cannabis to the mix, well now that’s one or two beers plus cannabis,” Cowen analysts noted. “As we think ahead to 2019, we are increasingly cautious again on beer. I would expect all of the large global alcohol players are paying attention to this.” In short, cannabis stocks could be one of the smartest trades you make all year. To make money from the boom, we'd recommend buying Tilray Inc. (TLRY) and Canopy Growth (CGC) at market prices.

This article has been provided by a Chasing Markets contributor. All content submitted by this author represent their personal opinions, and should be considered as such for entertainment purpose only. All opinions expressed are those of the writer, and may not necessarily represent fact, opinions, or bias of Chasing Markets.
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