The firm downgraded the stock to neutral from buy and also slashed its price target to $27 from $46. The price target is only a slight upside from the stock's closing price Thursday of $27.74.
Bank of America analyst Christopher Carey said he sees a swoon in Canopy's stock that will match a second half pause in Canada's cannabis industry growth.
Carey said there is too much risk in Canopy shares as long as estimates are at their current levels.
Finally, the backlash against vaping also could hurt cannabis stocks in the near-term as recent bad press could bleed into the cannabis industry.
Canopy shares were down 1.06% to $24.48.
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