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WeedMD moving with evolving cannabis industry, says Eight Capital, rating shares a Buy

The investment bank has a target of $4.50 for the cannabis company's stock
WeedMD moving with evolving cannabis industry, says Eight Capital, rating shares a Buy
The company now has licensed production capacity up to a total of 136,000 square feet

Recent initiatives have shown that cannabis group WeedMD Inc (CVE:WMD) (OTCMKTS:WDDMF) is keeping up with changes as the marijuana industry evolves.

That's the view of broker Eight Capital, which rates the shares a Buy and has a target of $4.50, compared with the current price of $1.63.

READ: WeedMD and Blockstrain Technology hail industry-first cannabis validation program

On Tuesday, WeedMD said it had become the first licensed producer in the world to include a cannabis strain authenticity and tracking platform into its sales program.

The firm now has 40 active cannabis strains from its genetics bank that hold the BLOCKStrain Certificate of Authenticity and can be cross-referenced as verifiable strains in BLOCKStrain's database. from genome to sale.

"The program ensures the authenticity of cannabis strains and is a unique differentiator to WMD's large genetics bank,"  Eight Capital's Graeme Kreindler. "As products continue to evolve and become more complex, we see value in this technology in order to ensure customers are in fact purchasing products as advertised."  

The analyst highlighted the recent launch of Pioneer Cannabis Corp, a national retail services provider created in partnership with Pita Pit Canada, which will offer retailers such services as licensing assistance, security and payment systems.

"The relationship established by retailers with Pioneer could help to increase WMD's brand awareness, presence on store shelves and ultimately its distribution footprint across Canada," Kreindler said.

Provincial reach

Meanwhile, WeedMD said last week it had added the Manitoba Liquor and Lotteries Corp to its distribution network, increasing the number of provinces to five including Ontario, Alberta, British Columbia and Nova Scotia.

That's alongside a supply agreement with Canadian pharma group Shoppers Drug Mart.

These all help to expand the company's distribution channels across Canada in both medical and adult-use segments, said Kreindler.

WeedMD now has licensed production capacity up to a total of 136,000 square feet and expects to bolster that to more than 550,000 square feet early this year.

"Licensing remains a bottleneck for producers across the industry; however, we feel that WMD's hybrid-greenhouse as well as a land package of 50 acres that could support outdoor growing presents an attractive and cost-competitive cultivation platform once fully operational," said Eight Capital.

Contact Giles Gwinnett at [email protected]

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