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Pro Analysis

Buy cannabis-play GW Pharmaceuticals, Goldman says

A cannibanoid medecine manufactured by GW Pharmaceuticals.
BSIP | UIG | Getty Images
A cannibanoid medecine manufactured by GW Pharmaceuticals.

Investors should buy shares of GW Pharmaceuticals on its promising cannabis-based drug pipeline, according to Goldman Sachs, which started coverage of the company with a buy rating.

"We initiate coverage on GWPH, a pre-commercial-stage biopharmaceutical company focused on cannabis-based therapies in central nervous system (CNS) disorders," Goldman's Salveen Richter wrote in a note to clients Friday. "GWPH [is] set to fly high. ... A barrage of pipeline catalysts should drive shares higher in 4Q16."

Richter's picks have a 31.5 percent one-year average return with a 70 percent success rate, according to analyst ranking service TipRanks, placing him in the top 2 percent of all Wall Street analysts covering any industry.