A Tilray grow room Tilray

Wall Street's top cannabis analyst believes U.S. sales of marijuana will rise more than she previously projected to $80 billion by 2030 and told clients to expect major Canadian growers Canopy Growth and Tilray to outperform in 2019. "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," Cowen analyst Vivien Azer wrote Tuesday. "Given our outlook for continued strong growth in North American cannabis in 2019, we remain constructive on all three of our publicly traded cannabis stocks," including Canopy, Tilray and KushCo, an American company that sells packaging for the cannabis industry. Azer is a widely followed analyst of the industry and one of the few from a major firm which covers the industry. Her previous forecast for U.S. cannabis sales by 2030 was $75 billion.

After months of political haggling and legal debate, Canada became the first Group of Seven country to OK recreational use of pot on Oct. 17. But despite the excitement surrounding national legalization, Azer said that the adult-use market got off to a rocky start thanks to a rushed retail framework (e.g., no stores in Ontario) and insufficient supply available. Still, as Canadian legislatures gradually legalize new forms of cannabis consumption, planned production expansion should be enough to ease those early concerns. "With the market set to expand to include novel form factors, and with expanded retail access, we remain encouraged at the market's potential for growth in 2019, where we expect adult use sales (at retail) to total C$3.1 billion (including taxes)," Azer said. Specifically, Tilray and Canopy Growth should finally start to see the positive effect the adult use market will have on sales. Reported revenue at both companies may have disappointed some investors when Canopy and Tilray posted quarterly results last fall, though the true impact of the legalization was not reflected in those results. Though shares of both Tilray and Canopy are up in 2019, the stocks are off by more than 40 percent over the last three months.

Canopy Growth CEO Bruce Linton poses for a photo with Ian Power and Nikki Rose, who were first in line to purchase the first legal recreational marijuana after midnight, at a Tweed retail store in St John's, Newfoundland and Labrador, Canada October 17, 2018. Chris Wattie | Reuters