As cannabis company founders in Canada continue to be handed pink slips, it seems the U.S. market is staying strong.

Aurora Cannabis (ACB) founder and CEO Terry Booth resigned on Thursday amid a major restructuring. The company cited slower-than-expected industry growth in Canada. That doesn't seem to the case in the U.S. cannabis market, however.

Canaccord Genuity analyst Bobby Burleson cited two recent reports from Arcview Market Research and BDS Analytics that support the case for companies that are in high-growth American states. In particular, companies with exposure to Massachusetts and Illinois are seen as being the most favorable.

Meanwhile, those companies that had bet on California and Michigan are being hurt by lower-than-expected sales due to the strength of the illicit market and high taxes.

The Arcview/BDS report noted that 2019 U.S. cannabis sales hit $12 billion and jumped 23% year over year. The same duo have forecast that 2020 sales should reach $16.2 billion and by 2024 could be as high as $31.1 billion.

Illinois & Massachusetts

Illinois has been called the "corn state," but it may be changing that to the cannabis state. The Illinois Department of Financial and Professional Regulations reported that the state has sold $40 million in adult-use cannabis in January. The pent-up demand and quick opening of dispensaries helped fuel the firestorm of sales.

While supply interruptions did occur, the Illinois stores seemed to quickly restock with new product. It was the second most successful launch of an adult market, with Nevada being the largest for per-capita sales. The analyst noted that Ascend Wellness has a dispensary at the Illinois-Missouri border that picks up customers crossing state lines.

Massachusetts has seen a less-than-stellar rollout of legal adult-use cannabis dispensaries, but it does seem to be finally getting on its feet. The state took a very cautious and measured approach to store openings frustrating operators and customers alike.

Total cannabis sales in Massachusetts were roughly $670 million in 2019 and are expected to reach $1.5 billion by 2024. Adult-use only cannabis sales reached $420 million for the first full year and this was despite the challenges the operators faced. Operators continue to add more stores and the bottle neck for testing looks to be abating as more labs get licensed.

Opportunities Await

"We believe the macro environment is improving highlighted by the closing of multiple large-scale acquisitions in the past few weeks following prolonged delays, recent news of state expansion legislation progressing and the negative effect of the vape crisis appearing to wane," said Burleson of Cannacord. "We believe the underperformance of stocks last year presents an opportunity for investors at current levels."

Of course, that's no consolation to the thousands of investors who lost most of their investment dollars last year. Burleson said he favors companies with strong cash balances and sizable and defensive existing operations.

2020 Elections

As many as 15 states are expected to have ballot initiatives for cannabis this year. Missouri just legalized medical marijuana and before the program has even gotten off the ground, a push for recreational marijuana as already begun.

Missourians for a New Approach stated that according to Missouri's fiscal estimate, legalizing recreational marijuana could produce $93 million to $155 million to the state every year by 2025. Local governments could get anywhere from $17 million to $27 million annually.

New Mexico, New Hampshire and Rhode Island have all pushed to legalize adult-use cannabis through legislative efforts ahead of the elections. Vermont decriminalized recreational cannabis, but didn't allow sales. The state's legislators attempted to create a sales program in 2019, but it failed and is expected to be taken up again in 2020.

Vape Bottom?

It does seem as if the vape crisis has finally hit a bottom. Reported cases have declined as consumers either quit buying vapes or significantly cut back on purchases.

Educated consumers have also learned to only buy vape products from reputable dispensaries that can protect the purchaser from counterfeit items. These illicit vape producers were the main source of problems in the vape industry.

This could mean a recovery for vape heavy companies such as Slang Worldwide (SLGWF) , KushCo Holdings (KSHB) and even Tilt Holding's (TLLTF) Jupiter brand.