Investors might be high on marijuana stocks these days, but a notable analyst isn't exactly bullish on one of the top names in the sector. 

On Friday, Piper Sandler's Michael Lavery cut his recommendation on industry bellwether Canopy Growth (CGC -1.71%) from overweight to neutral. He is maintaining his price target of $27 per share, meaning that he believes the stock could fall by nearly 40% from its current level.

A hand gripping a marijuana plant.

Image source: Getty Images.

Lavery pointed out that Canopy Growth has risen by 215% since October, a rise that's due to the likelihood that marijuana will soon be legalized throughout the U.S. He tempered enthusiasm for that prospect, opining that such a change in status is still two to four years away. Many marijuana investors, cheered by recent pronouncements from powerful senators, believe it could occur this year.

Although Canopy Growth is based in Canada, it has struck deals to purchase stakes in U.S.-based Acreage Holdings and Canadian peer TerrAscend (which has operations in New Jersey and California). These deals, however, are contingent upon the U.S. changing the legal status of marijuana.

Meanwhile, the prognosticator pointed out that Canopy Growth shares trade at 21 times the company's estimated full-year 2022 sales, making the company extremely pricey on that basis. He does not feel the company's fundamentals justify such a lofty figure.

Investors will get a glimpse of how accurate Lavery's moves are on Tuesday, when Canopy Growth reports its third quarter of fiscal 2021 results before the market open.

Some are likely expecting the company to post encouraging numbers. On Monday, Canopy Growth stock closed 2.2% higher, eclipsing the 0.7% increase of the S&P 500 index.