Jefferies has high hopes for the cannabis sector and five stocks in particular.

In a 250-page research note, reported on by Barron’s and MarketWatch, the brokerage weighed up the prospects of pot producers for the first time. Analyst Owen Bennett analyzed nine stocks, rating Aurora Cannabis Inc. (ACB), The Green Organic Dutchman Holdings Ltd. (TGOD), CannTrust Holdings Inc. (TRST), OrganiGram Holdings Inc. (OGRMF) and Flowr Corp. (FLWPF) as buys with price targets of C$12, C$6.10, C$15, C$10 and C$5.70, respectively.

Like many of his peers, Bennett is confident that the cannabis sector has plenty of potential to grow. In the note, the analyst played down concerns that “weed is just another agricultural commodity” and that prices will drop once supply is ramped up. “[I]f you can deliver a top quality experience you will be able to charge a premium,” he said.

Bennett predicted that the industry could generate annual sales of $50 billion over the next decade, or $130 billion if it lives up to its potential, up from $17 billion in 2019. He added that the biggest winners will be those companies that are leaders in the medical and recreational space and those who have a strong position in the U.S., the world’s biggest cannabis market.

Jefferies identified Aurora and Canopy Growth Corp. (CGC) as the “best placed to dominate on a global basis in the years ahead,” but only slapped a buy rating on one of them. Canopy was rated a hold because Bennett believes the market has already priced in its strong potential. Aurora, on the other hand, still represents good value, according to the analyst.

Bennett, who also rated Emerald Health Therapeutics Inc. (EMHTF) as a hold, picked out stocks to avoid as well. Cronos Group Inc. (CRON) and Hexo Corp. (HEXO) were both predicted to underperform in the note.

Cronos’ shares fell 7.6% after Bennett questioned the company’s early performance in the Canadian recreational market and described the stock as overvalued.

His criticism of Hexo was even harsher. The analyst claimed that the Gatineau, Canada-based company’s deal with Molson Coors Brewing Co. (TAP) had been overappreciated by investors, leading the shares to fall 3.5%.

“We think there’s a tendency by the market, due to limited financial metrics/industry data, to take any CPG/brand partnership as a validation of a superior business; the deal Hexo signed with Molson is an example,” Bennett wrote. “The reality is Molson didn’t put any capital in, we don’t actually know if Hexo have superior patented water soluble applications to commercialize near term, no current bottling infrastructure appears in place, and we’ve no idea about their extraction capacity to supply the beverages.”