The exit of CFO Jeremy Blumer took him a little off-guard, but Canaccord Genuity analyst Neil Maruoka thinks Maricann Group (CSE:MARI) is a buy regardless.
On August 4, Maricann Group announced that CFO Jeremy Blumer had left the company and would be replaced on an interim basis by CEO Ben Ward.
“On behalf of the company, I want to thank Jeremy for his work and wish him success in his future endeavours,” Ward said. “Maricann is continuing to evolve as a company and we look forward to announcing exciting developments in the near future.”
Maruoka says shareholders should not worry about this development.
“Although this announcement took us a little off-guard, we do not believe that it should have a significant negative impact,” the analyst says. “We believe that Mr. Blumer performed the function of financial controller well, but that much of the strategic decisions were handled by CEO Ben Ward; Mr. Ward has assumed the role of acting CFO until a replacement can be identified. While we did have some reservations given the complexity of financial reporting for cannabis companies, following a discussion with management, we are confident that Mr. Ward has sufficient external support from experienced cannabis executives. Further, we believe that Maricann’s leadership team remains strong with COO Terry Fretz, CSO Dr. Stephen Bennett, and a seasoned executive team in Europe. We continue to await news on Maricann’s licensing status in Germany, which is expected in coming months and could provide a significant catalyst for the stock.”
In a research update to clients today, Maruoka maintained his “Speculative Buy” rating and one-year price target of $5.00 on Maricann Group, implying a return of 194.1 per cent at the time of publication.
Maruoka thinks Maricann will generate EBITDA of negative $5.3-million on revenue of $6-million in fiscal 2017. He expects those numbers will improve to EBITDA of positive $4.9-million on a topline of $23-million the following year.