Wall Street’s first marijuana analyst on her favorite stocks

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Vivien Azer began covering the cannabis industry for Cowen & Co. three years ago

Vivien Azer is a pioneer in the marijuana stock market. The analyst began covering marijuana stocks for Cowen & Co. three years ago, well before Canada legalized recreational marijuana use, and before almost any marijuana company was publicly traded in either Canada or the U.S. With her fingers definitely on the pulse of the marijuana market, Azer believes that there are a couple of companies that stand out from the rest.

Azer explains how she got started covering cannabis for Cowen, stating, “When I was still at Citigroup in 2014, I took a trip to Denver, where they had just opened up to adult-use cannabis. Walking into a dispensary and seeing the reality of legal cannabis was eye-opening. On returning to New York, I sat down again with Cowen and proposed the idea of covering cannabis.”

She adds, “For over two years, I was the sole Wall Street analyst at a major firm covering cannabis. In the spring of 2016, we started to see a lot of ballot measures gaining signatures at the state level. I went back to management and reminded them of their commitment to cannabis two years earlier.”

Going forward, Azer believes that the large Canadian operators stand the best chance of having the edge when it comes to controlling the marijuana market and, ultimately, the marijuana stock market. She singles out the deals between Constellation Brands and Canopy Growth, and Altria Group and Cronos Group as the potential leaders, given the strength and position of each of the four companies involved.

She also points to Aurora as her top pick. She explains, “The company is likely to have positive EBITDA [earnings before interest, taxes, depreciation and amortization] by its June quarter and be free-cash-flow positive [which includes capital spending], the quarter thereafter. That would make it one of the first major licensed producers to be EBITDA positive.”