Vivien Azer, a top cannabis research analyst, recently tripled her initial price forecast for Tilray, one of Canada’s biggest marijuana producers and retailers.
“With cannabis, you’re talking about this massive step change in terms of the addressable market,” Axer told CNBC. “You’re bringing a $7 billion illicit market into the legal market and so it does require a different valuation framework.”
Tilray, which trades on the Nasdaq, was initially given a $62 stock price forecast by Azer, but that has been tripled to $172.
Azer is now estimating that the marijuana market could reach a value of $500 billion.
“Our broader, big picture view of cannabis goes beyond the adult use launch in Canada,” she said. “Rather, we believe this is the first step toward the establishment of cannabis as a key functional ingredient touching multiple consumer categories with four key verticals: adult use, beauty and nutraceuticals, OTC pain and sleep, and pharmaceuticals.”
Tilray’s stock has already experienced 650% growth since July. The company is working with the University of California San Diego Center for Medicinal Cannabis Research in an effort to determine the safety, efficacy and tolerability of the plant on neurological disorders. Promising findings from this study could open the door for more studies of the like to take place.