Cannabis is a $200B market cap industry, Pablo Zuanic says at SA Investing Summit

Cannabis can one day become an industry with a $200B market capitalization, but taking a longer-term perspective will be the key, former Cantor Fitzgerald analyst Pablo Zuanic said during Seeking Alpha’s inaugural investing summit on Tuesday.

His comments coincide with a recent decline in cannabis stocks as initial market interest over a potential marijuana rescheduling decision from the U.S. Drug Enforcement Administration (DEA) wanes.

AdvisorShares Pure US Cannabis ETF (NYSEARCA:MSOS), which represents U.S. multi-state operators, and other cannabis-related ETFs such as AdvisorShares Pure Cannabis (NYSEARCA:YOLO), ETFMG Alternative Harvest ETF (NYSEARCA:MJ), and Amplify Seymour Cannabis ETF (NYSEARCA:CNBS) have all sold off sharply over the past few weeks.

“This is a very volatile sector,” said Zuanic, who currently serves as a managing partner of cannabis consulting firm Zuanic & Associates.

“I do care about fundamentals,” even as we look at a more macro outlook for the cannabis sector over a much more extended period, he said, adding, “I believe one day this is a $200B market cap industry.”

In late April, cannabis stocks rallied after media reports indicated that the DEA was set to reclassify marijuana from a high-risk category to a low-risk category known as Schedule III, where medications such as ketamine are categorized under the Controlled Substances Act (CSA).

The decision, currently subject to public comments, is likely to bring significant tax benefits to marijuana companies and promote cannabis-related research.

“I take the view that this industry is going to change,” said Timothy Seymour, founder and chief investment officer of Seymour Asset Management, as part of a panel discussion moderated by Seeking Alpha’s Rena Sherbill at the event. “The addressable market continues to grow,” he added.

—SA Editor Jason Capul contributed to this article