Canopy Growth Corp. (CGC) - Get Report climbed 13.6% on Wednesday after Piper Jaffray analyst Michael Lavery initiated coverage on the Canadian cannabis company and Tilray Inc. (TLRY) - Get Report with overweight ratings.

Shares of Tilray closed 2.7% lower.

Lavery said in a research note to investors that the global cannabis market has the potential to reach $15 billion to $50 billion in the near term and $250 billion to $500 billion on the long term. The industry has potential for significant growth, Lavery said, where illicit trade moves to legal sales, and health and wellness categories transition to cannabidiol-infused products.

Lavery noted that more than 25 countries have legal marijuana use today and he believes federal legalization in the U.S. could potentially come in the next five years. He also expects capital flow into the sector will likely continue.

Cowen analyst Vivien Azer was also bullish on the cannabis market, telling investors Tuesday that the U.S. market for cannabis has a lot of room to grow over the next decade with sales expected to reach $80 billion by 2030 if the federal legislation comes through.

"Our increased confidence reflects the bigger than expected increases that we continue to see for reported cannabis incidence among adults," Azer wrote.

Cowen maintained "outperform" ratings for all three of the publicly traded cannabis stocks that it covers: Tilray, Canopy Growth Corp. and KushCo Holdings Inc. (KSHB) , a Garden Grove, California-based packaging company that provides services and products for several industries including the regulated cannabis and CBD industries.

Shares of KushCo fell 2.5%.