A marijuana growth facility in Maryland. Photo: Michael Robinson Chavez/The Washington Post/Getty Images

Marijuana stocks have fallen hard in 2019 and short sellers have been increasing their positions, betting the sector is overvalued and primed for further losses. Despite the passage of the SAFE Act through the House last week, Wall Street remains bearish on companies dealing in the drug.

The latest: Bank of America Merrill Lynch analysts Christopher Carey and Lisa Lewandowski downgraded Canada's Canopy Growth, the world's largest marijuana company, to neutral from buy, saying Wall Street expectations are "far too high."

What they're saying: While Carey and Lewandowski said they still see future growth ahead for both the company and the Canadian cannabis market, it's not enough to justify significant further price gains, they wrote in a note to clients.

  • "Canada industry growth is set to pause in the second half, potentially flattening, a trend we think could also be the case with Canopy; and yet the Street is modeling strong double-digit sales growth quarter-on-quarter."
  • They expect the slowdown in near-term industry growth in part because of the negative impact of vaping legislation.

Why it matters to the market: The tide looks to have turned on pot stocks this year, with 2 major ETFs that track the marijuana industry — the Horizons Marijuana Life Sciences ETF and ETFMG Alternative Harvest — losing about half their value since October 2018.

  • Cannabis short sellers, who had gotten smoked betting against the industry in 2018, are seeing their luck change, with the top 20 shorts in the sector up $336 million in the second quarter and $1.76 billion in Q3, data from S3 Partners shows.
  • Since the BAML note was published on Friday, short sellers have seen more than $200 million in mark-to-market profits, according to S3's data.

Go deeper: The future of cannabis is mainstream retail

Go deeper

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Coronavirus dashboard

Illustration: Sarah Grillo/Axios

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What they're saying: Trump nominates Amy Coney Barrett for Supreme Court

Judge Amy Coney Barrett in the Rose Garden of the White House on Sept. 26. Photo: Oliver Douliery/AFP via Getty Images

Democratic and Republican lawmakers along with other leading political figures reacted to President Trump's Saturday afternoon nomination of federal appeals court Judge Amy Coney Barrett to succeed Justice Ruth Bader Ginsburg on the Supreme Court.

What they're saying: "President Trump could not have made a better decision," Senate Majority Leader Mitch McConnell said in a statement. "Judge Amy Coney Barrett is an exceptionally impressive jurist and an exceedingly well-qualified nominee to the Supreme Court of the United States."

Amy Coney Barrett: "Should I be confirmed, I will be mindful of who came before me"

Trump introduces Amy Coney Barrett as nominee to replace Ruth Bader Ginsburg. Photo: Olivier Douleiry/Getty Images

In speaking after President Trump announced her as the Supreme Court nominee to replaced Ruth Bader Ginsburg, Circuit Court Judge Amy Coney Barrett said on Saturday she will be "mindful" of those who came before her on the court if confirmed.

What she's saying: Barrett touched on Ginsburg's legacy, as well as her own judicial philosophy and family values. "I love the United States and I love the United States Constitution," she said. "I'm truly humbled at the prospect of serving on the  Supreme Court."