Flower One Holdings has a 226 per cent upside, Mackie Research says

Nevada-based vertically integrated cannabis company Flower One Holdings (Flower One Holdings Stock Quote, Chart CSE:FONE) has announced a slate of new licensing and branding agreements, enough for Mackie Research analyst Greg McLeish to maintain his “Buy” recommendation and C$4.50 target price.

Last week, Flower One announced licensing agreements and brand partnerships with both Flyte Concentrates and Rapid Dose Therapeutics, the former giving FONE a license to manufacture, distribute and sell Flyte’s two signature cannabis products, FlytePen and JetPack, to all 130 cannabis retailers in Nevada, the first for Flyte in the US, whereas the latter gives FONE a license to manufacture, distribute and sell RDT’s QuickStrip, a proprietary cannabis delivery technology.

On Tuesday, Flower One announced an agreement with California-based cannabis lifestyle brand Old Pal, giving FONE the license to produce, manufacture and distribute Old Pal to Nevada’s 130 cannabis retailers. McLeish says that Old Pal has the most affordable legal cannabis in California and the new deal represents its first out-of-state expansion.

“January has been a busy month for Flower One and since the beginning of the month it has signed licensing agreements and brand partnerships with Old Pal, Flyte Concentrates and Rapid Dose Therapeutics. These recent announcements help to underpin our financial forecasts through F2020 and our thesis remains intact,” said McLeish in a research update on Wednesday.

The analyst also notes that Flower One’s construction of the largest cannabis facility in the state of Nevada, capable of producing more than 63,000 kg of cannabis per year, is currently on schedule.

McLeish’s C$4.50 target stems from his 8x EV/EBITDA valuation and represented a projected return of 226 per cent at the time of publication.