BofA Merrill Lynch analyst Christopher Carey noted that Mexico's Supreme Court has granted an extension until April 30, 2020 for Congress to legalize all forms of cannabis, writing in its decision that considering the complexity of the issue it grants the extension "exceptionally and for one time only." He views this as an important development for the industry since, in addition to opening a potentially large market, it will put even more pressure on U.S. federal action as the country will potentially "place the US between 2 of only 3 countries in the world to have legalized cannabis for recreational use." 9% of Mexico's population of 131M is estimated to have consumed cannabis in 2018 and the legal market could be worth $1B by 2024, according to BDS Analytics, noted Carey. Publicly traded companies in the cannabis space include Aphria (APHA), Aurora Cannabis (ACB), CV Sciences (CVSI), CannTrust Holdings (CNTTF), Canopy Growth (CGC), Cronos Group (CRON), General Cannabis (CANN), India Globalization Capital (IGC), Tilray (TLRY) and Trulieve Cannabis (TCNNF).

MKM Partners analyst Bill Kirk kept his Neutral rating on Canopy Growth (CGC) while lowering its price target to CAD30 from CAD33 and also kept his Sell rating with an unchanged CAD3.50 price target on Aurora Cannabis (ACB) ahead of their earnings reports this Thursday. The analyst says that neither company is expected to show much improvement on the top line, with inventory held at provinces weighing on shipments, pricing coming down, and the price premium relative to "illicit channels" widening. Kirk adds that the likely earnings disappointment may result in the bulls "revisiting the industry's path and pace toward profitability."