Buy Cannabis Wheaton for 89% upside, says Mackie Research

Continued execution at Cannabis Wheaton Income Corp. (Cannabis Wheaton Income Corp. Stock Quote, Chart, News: TSXV:CBW) has Mackie Research Capital analyst Greg McLeish feeling bullish about the stock.

In a research update to clients today, McLeish maintained his “Buy” rating and one-year price target of $3.00 on CBW, implying a return of 88.7 per cent at the time of publication.

Yesterday, Cannabis Wheaton announced the acquisition of Charlottetwon-based Dosecann, which it described as a “late-stage licensed dealer applicant pursuant to the Narcotic Control Regulations” for up to $38-million, depending on certain milestones.

“The addition of Dosecann to the Cannabis Wheaton platform provides us with a strategic regulatory tool that we believe will be increasingly important under the proposed Cannabis Act,” CEO Hugo Alves said. “We couldn’t be more excited to be working with the high-calibre team Greg Boone has put together to develop Dosecann into a true centre of excellence in the creation of intellectual property, product development and commercialization. We believe the Dosecann team’s proven ability to take pharmaceutical, natural health products and consumer packaged goods from conceptualization to commercialization will be of huge value to the company’s wholly owned subsidiaries and streaming partners as we enter the next leg of growth in the domestic and international markets for cannabis products.”

The analyst says Cannabis Wheaton has made progress on what he calls its “midstream” strategy, noting that Dosecann is a key part of this.

“CBW’s “Midstream” strategy focuses on collaboration with value-adding initiatives such as extraction, processing, branding, manufacturing, and research,” he explains. “The midstream is one of three distinct verticals in the supply chain essential for growth in the cannabis industry.”

McLeish explains that the company’s “Upstream” strategy consists of domestic and international cannabis cultivation assets, the “Midstream” is comprised of value enhancing assets, such as extraction, processing, branding/licensing, product manufacturing, research and development and the “Downstream” segment is made up of the company’s various domestic and international distribution channels.

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