Shopify (SHOP), Canada's home-grown e-commerce firm, could become a hot marijuana stock owing to the country's legalization of recreational cannabis, says an analyst.

Recreational cannabis becomes legal in Canada Oct. 17. As it does, the Shopify(SHOP) platform could help drive merchandise volume and revenue, KeyBanc Capital Markets analyst Monika Garg said in a note to clients. The company's headquarters is in Ottawa, Canada's capital.

"Shopify has been selected by several Canadian provinces, including Ontario and British Columbia, to run their e-commerce websites and in-store point of sale solutions," Garg said. "Shopify has also signed deals with the largest private cannabis producers and distributors, including Canopy Growth and Aurora. We estimate that cannabis sales in Canada could top $10 billion in (gross merchandise volume) annually."

Shopify stock closed up 1.4% to 164.60 on the stock market today.

Shopify sets up e-commerce websites for small businesses, and partners with others to handle digital payments and shipping. It also offers customer relationship management software so businesses can do targeted marketing to their clients.

Salesforce.com May Compete More With Shopify

Shopify stock has formed a cup chart pattern, with a buy point of 176.70. The stock is trading above its 50-day-moving-average, a positive trend. Shopify stock has gained nearly 30% from a year ago.

Shopify could face more competition from Salesforce.com (CRM), said William Blair analyst Justin Furby. Furby attended the annual Shop.org conference last week.

"While Shopify Plus and Demandware serve two different markets, our conversations at the event suggest that the overlap between the two might be growing, as Demandware has started to push a bit more down market (to smaller customers)," Furby said in a note to clients.

Shopify on Tuesday rolled out a new augmented reality app for Apple iPhones and iPads. The tools make online purchases look more lifelike for users.