Cannabis stocks were mostly lower Friday, after Jefferies started coverage of Tilray Inc. with a bearish underperform rating and questions about the stock’s high valuation.

Tilray Inc. shares TLRY, -8.66% fell 7% before paring those losses to trade down about 2%.

“We appreciate it is well placed in medical but future value here will be driven by IP for which (there is) little visibility near term,” Jefferies analyst Owen Bennett wrote in a note. “Its share structure also raises risk of increased volatility.”

With its global ambitions, Tilray needs to be compared with Canopy Growth Corp. CGC, -8.10% WEED, -6.39% and Aurora Cannabis Inc. ACB, -25.95% , ACB, -25.48% the analyst wrote, but there are a number of areas in which it lags those peers.

The company’s share of Canada’s medical market, for example, is not in the top 4 and recent consumer feedback is not inspiring, while the company’s approach to the newly legal recreational market “does not appear as well thought through,” Bennett wrote.

Companies in the cannabis sector that have secured investments from established consumer packaging or big name brands have tended to trade up with little thought on what real value they will bring, said Bennett. Tilray fits into that category with the deals it has agreed with Anheuser-Busch InBev. SA BUD, -2.05% and Authentic Brands Group.

The Budweiser parent reached a deal with Tilray in December to invest $50 million each to research drinks infused with THC, the psychoactive ingredient in cannabis, and CBD, a non-psychoactive ingredient. In January, the company struck a separate revenue-sharing agreement with the owner of brands including Frederick’s of Hollywood, Frye, Jones New York and Herve Leger among others to distribute cannabis-based products worldwide.

Read also: Cannabis stocks tumble as FDA chief’s departure leaves CBD regulation in limbo

“While potentially beneficial, we think the market has overestimated the near-term significance and value creation,” wrote Bennett.

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Cronos Group Inc. shares CRON, -5.27% fell 3%. The company said earlier it has closed the previously announced C$2.4 billion ( $1.8 billion) investment from Altria Group Inc. MO, +0.10% , and that Altria’s Jerry Barbato, most recently senior director of corporate strategy, will become the new Cronos chief financial officer.

Barbato will take the role over from William Hilson, who will serve in the newly created role of chief commercial officer. The Cronos board is expanding to seven members from five, comprising three existing directors, Mike Gorenstein, Jim Rudyk, Chief Financial Officer of Roots Corporation, and Jason Adler, Founder and Managing Partner of Gotham Green Partners GP, as well as four new directors nominated by Altria.

Aleafia Health Inc. shares CA:ALEF CA:ALEF slid 3%. That company said it has received conditional approval from the Toronto Stock Exchange to move its listing there from the smaller Toronto Venture Exchange. The listing is subject to the approval of the company’s acquisition of Emblem Corp.

Supreme Cannabis Co. shares fell 1.1%. The company named Nikhil Handa to the role of chief financial officer, replacing Dimitre Naoumov who will become vice president, finance. Handa was most recently vice president of finance at Well.ca, an online wellness and beauty products site that he sold to McKesson Canada MCK, +0.13% .

He has also done stints at Burger King parent Restaurant Brands International QSR, +0.87% and was on the M&A team at RBC Capital Markets.

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Meanwhile, in the U.S. the bipartisan SAFE Banking Act bill was reintroduced on Thursday after a congressional hearing last month. The bill aims to allow banks work with legal cannabis companies without fear of punishment from federal regulators, who continue to classify the substance as a Schedule I drug, the same category as heroin and cocaine.

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“Members of the legal cannabis industry are already one of the most unfairly taxed and heavily regulated groups in the country. They shouldn’t have to deal with the additional costs and safety concerns that are caused by preventing banks from working with them,” said Aaron Smith, executive director of the National Cannabis Industry Association, in a statement.

Elsewhere in the sector, Aurora Cannabis Inc.’s U.S.-listed shares were up 1.7%, and Canopy was down 0.5%.

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Hexo Corp. HEXO, -5.53% reversed early losses to trade up 1.9%. OrganiGram Holdings Inc. US:OGRMF followed the same pattern and was last up 1.6%. CannTrust Holdings Inc. US:CTST CA:TRST was down 1.6%.

GW Pharmaceuticals PLC GWPH, +1.24% fell 1.9%.

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The Horizons Marijuana Life Sciences ETF HMMJ, -3.89% was down 0.3% and the ETFMG Alternative Harvest ETF MJ, -4.65% was down 0.8%.

The S&P 500 SPX, -0.71% and the Dow Jones Industrial Average DJIA, -0.32% were down about 0.6%.

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