Not long ago, Aurora Cannabis (NYSE:ACB) ranked as the darling of Wall Street analysts. But analysts can be quite fickle. Bank of America Merrill Lynch's Christopher Carey downgraded Aurora from buy to neutral in July. Now another top analyst has expressed a lack of confidence in Aurora's prospects.

Earlier this week, Piper Jaffray initiated coverage on Aurora with a neutral rating. However, the investment firm hasn't given up on the cannabis sector. Although Piper Jaffray doesn't recommend buying Aurora Cannabis, there are five pot stocks the firm does like right now.

Down on Aurora

Why doesn't Piper Jaffray like Aurora? Lead analyst Michael Lavery expressed concern about Aurora's "premium valuation relative to peers." He acknowledged that the company leads the industry in production capacity but thinks that "oversupply looks likely in 2020."

Lavery wasn't especially bullish about Aurora's prospects in the European medical cannabis market, either. He noted that certification of production facilities in Europe "is a slow, opaque process and still pending." Lavery also is uncertain about when and how Aurora plans to enter the U.S. cannabis or hemp cannabidiol (CBD) markets.

Are these valid concerns? I think so -- at least over the near term.

Aurora's market cap of more than $6 billion certainly looks pricey compared to most of its peers. It's only a matter of time before there is a supply glut in Canada, even if Lavery's projection that it will happen in 2020 is too early. Expansion of European medical cannabis markets could also go more slowly than anticipated.

While several of its rivals have announced their strategies to enter the U.S. market, Aurora is really dragging its heels. The company did bring billionaire investor Nelson Peltz on board in March to help line up partners from outside the cannabis industry. Although this seemed to be a good step toward entering the U.S. market, there hasn't been any visible progress on landing a partner so far.

Piper Jaffray's high five

So which pot stocks does Piper Jaffray prefer over Aurora Cannabis? The only Canadian cannabis stock on the list is Cronos Group (NASDAQ:CRON).

Lavery wrote to investors that Piper Jaffray really likes Cronos' partnership with tobacco giant Altria. Thanks to Altria's $1.8 billion investment earlier this year, Cronos has plenty of cash on hand. Piper Jaffray also thinks that Altria can help open doors to retailers in the U.S. for CBD products and brings plenty of regulatory and vape expertise to the table.

All of the other cannabis stocks with buy recommendations from Piper Jaffray are based in the U.S. Two of them are hemp CBD companies -- Charlotte's Web Holdings (OTC:CWBHF) and CV Sciences (OTC:CVSI). Piper Jaffray projects that the U.S. CBD market could be between $8 billion and $15 billion within the next five years. Lavery noted that Charlotte's Web, in particular, "appears to have an early lead and a strong e-commerce platform."

The remaining two stocks among Piper Jaffray's "high five" are Cresco Labs (OTC:CRLBF) and Green Thumb Industries (OTC:GTBIF). Both companies are U.S. cannabis operators with rapidly expanding operations.

Analyzing the analyst's picks

I don't always agree with Wall Street analysts, but Piper Jaffray appears to be on solid footing with its picks. My view is that U.S. cannabis stocks offer a lot more to investors because of their relatively lower valuations. I like Piper Jaffray's buy recommendations for Charlotte's Web, CV Sciences, Cresco Labs, and Green Thumb Industries.

My personal favorite in that group is Charlotte's Web. The company has a terrific new CEO in Deanie Elsner. It's building up production capacity and has more than doubled its retail distribution network so far this year. I've also been a fan of Origin House, which will soon be gobbled up by Cresco. I think this addition will make Cresco an even more attractive stock.

While there are plenty of skeptics of Cronos Group, I think that Lavery is right in highlighting the importance of the company's relationship with Altria. My view is that Cronos' acquisition of the Lord Jones line of upscale CBD products is a smart move into the U.S. market.

The only quibble I have is about Aurora. Although all of the reasons why Piper Jaffrey doesn't recommend the stock are valid, I still think that Aurora is likely to be a big winner over the long run. And if the company lands a major partner or two, don't be surprised if Aurora regains its status as a Wall Street darling.