Wall Street Analyst-Led Research Firm Gives Up On Cannabis, Here's Why

Cowen Group has discontinued coverage of the cannabis sector following its acquisition by TD Bank Group TD TD on Wednesday.

"Post Cowen's acquisition by TD, we are no longer covering securities relating to US multi-state operators in the cannabis sector a spokesman for TD Bank," said Dan Gagnier, a spokesperson for TD Bank.

For years, Cowen has been providing in-depth, actionable research and investing strategies for those seeking to invest in cannabis as well as other equity markets.

Cowen's senior research analyst Vivien Azer, who specialized in beverages and tobacco, ventured into the burgeoning cannabis sector nearly a decade ago, becoming the first senior Wall Street analyst to cover this emerging industry in 2014.

Under her guidance, the company has grown to cover over 30 companies with a stake in the cannabis industry.

The star marijuana analyst even shared her valuable insight on the state of the industry on several occasions at Benzinga's Cannabis Capital Conference in 2020, 2021 and 2022. The extraordinary cannabis event is returning in April to Miami for its 16th edition at the Fontainebleau Miami Beach Hotel in Florida.

Azer will continue to cover consumer staples and support the policy/consumer macro views on cannabis. TD's Gagnier said the bank will reevaluate the sector as changes occur. 

“Cowen has been a leader for in-depth, actionable research across equity markets, including emerging growth sectors like cannabis. Post Cowen’s acquisition by TD, we are no longer covering securities relating to US multi-state-operators in the cannabis sector but would reevaluate if the SAFE Act is passed or Federal regulatory posture changes," Gagnier told Benzinga via email. "Our team will continue to provide macro trends based on our consumer data and insights. We will also continue to provide US policy and regulatory insight for the cannabis sector through Cowen’s Washington Research Group.”

SAFE Banking Act & Recent Developments

Under existing federal law, financial institutions are still prohibited from providing their services to marijuana businesses, even in states with legal programs. 

The Secure and Fair Enforcement Banking Act of 2021 (SAFE Banking Act) seeks to resolve this issue of cannabis companies being compelled to rely on cash to operate, which makes them ideal targets for robbery.

In addition, the lack of financial services makes it difficult for smaller operators to enter the burgeoning industry.

Unfortunately, in December, lawmakers chose not to put cannabis banking reform in the National Defense Authorization Act (NDAA) to secure its approval.

However, Senate Democrats seem not to be giving up on cannabis banking reform. Majority Leader Chuck Schumer (D-NY) convened with both Democratic senators and their GOP chamber colleagues to come up with a way to push cannabis legislation toward approval in this Congress.

Benzinga Cannabis Capital Conference

The most successful cannabis business event in the world, the Benzinga Cannabis Capital Conference, returns to Miami for its 16th edition.
This is the place where DEALS GET DONE, where money is raised, M&A starts, and companies meet investors and key partners. Join us at the Fontainebleau Miami Beach Hotel in Florida on April 11-12. Don’t miss out.

Photo: Beniznga edit of images by lo lo and Paul Einerhand on Unsplash