Jefferies Group, one of Wall Street’s quieter investment powerhouses, made some big noise this week according to MJ Biz Daily. MJBD reports that the New York-based investment bank has initiated coverage of the cannabis industry. For those not in the investment world, “initiated coverage” means that an investment group has begun to follow and report on a given stock/portfolio/industry.

While there have been cracks in the wall surrounding the moratorium on financing for cannabis since last summer –when Bank of America helped to partially fund Constellation’s massive investment in Canopy Growth– the Jefferies Group announcement is a marked escalation in both interest and investment from a major player on Wall Street. If the fact that Jefferies Group initiating coverage wasn’t enough of a green light to invest in the plant-touching business, their accompanying report on the state of the cannabis industry should be. Let’s have a gander at what they said about the industry and the companies they’re looking at.

Cannabis Industry Valuation of “Base-Case Conservative” $50 Billion in Next Decade

Similar to RBC’s valuation of $47 billion for the US cannabis market last summer, Jefferies Group anticipates a “base-case conservative” valuation of $50B in the next decade. Mind you, that’s their (conservative) baseline and in the same report the group made clear that a “realistic upside” of $130 billion was possible with wider industry disruption. For some point of reference, according to Jefferies Group, these numbers suggest that our cannabis industry is today worth $17 billion.

“Global Winners” Will Lead in MMJ, Rec-Use, and Have Major U.S. Foothold

Additionally the report stated that, much as we suggested late last year, consolidation will continue apace, and that investors, the market, and businesses will all begin to move beyond splashy headlines and begin to expect performance in the marketplace. Notably, the report also called for “global winners” in the cannabis space to have “a strong position in the U.S.” No argument here, but it leads one to wonder about the impending collision course that some companies are on.

While no one is naive enough to not acknowledge there will be clear “winners” and “losers” in the high-stakes claim grab we’re witnessing in this contemporary gold rush, a $130 billion valuation (best-case scenario) leaves a lot of room for the “non-winners” to still stake a decent claim. That being said, a strong base in MMJ, rec-use and the U.S. would certainly put anyone in a good place.

Room For Everyone At The Cannabis Table? Maybe!

There’s a large range from the low end of $50 billion to the high end of the spectrum at $130 billion, there will be winners and losers and consolidation is becoming more and more prevalent as the harsh realities of financing come to roost for many small cannabis outfits. Legalization has brought opportunity, but also high costs in the form of applications, taxes, regulations, and especially non-compliance. But at the same time, those companies who are savvy enough to anticipate changes and to meet rapidly evolving regulations and licensing requirements will be fine down the road and find room at the table. Additionally, as we have seen in Canada and legalized states alike, employment and investment opportunities are only growing as the plant-touching business continues to flourish.