A new development for WeedMD (WeedMD Stock Quote, Chart TSXV:WMD) has Mackie Research Capital analyst Greg McLeish maintaining his bullish stance on the stock.
On May 31, WMD announced it had secured Health Canada approval for a 27 acre outdoor cultivation. The company says it plans to immediately plant 20,000 clones and harvest them this fall.
“Our ability to scale, coupled with our team’s proven experience in growing our proprietary genetics outdoors, positions us as a first mover in the industry,” commented Keith Merker, chief executive officer of WeedMD. “We have put together the most compelling outdoor cultivation plan in the industry, and this licence is the final piece of that plan to fall into place.”
McLeish says WeedMD is in rare company.
“Outdoor cannabis cultivation will position the company as one of one of the largest and lowest cost producers in the industry: The company secured the support of the Municipality of Strathroy-Caradoc for its planned outdoor grow expected to be completed in two phases,” the analyst said. “In 2019, Phase I will be brought online, representing more than 25 acres of production. Phase II will commence in 2020 and in April 2019, WeedMD purchased the land adjacent to its Strathroy facility. The purchase included 60 acres of prime land, increasing the workable outdoor land to over 100 acres. The addition of the adjacent property will allow the Phase II expansion to be up to 100 acres of outdoor cultivation. With a combined indoor and outdoor production footprint of over 5.2 million ft² and projected total potential annual output of 150,000 kg of cannabis by 2020, WeedMD is now positioned to be one of the largest and lowest cost cannabis producers in Canada.”
In a research update to clients today, McLeish maintained his “Buy” rating and one-year price target of $4.00 on WeedMD, implying a return of 112.8 per cent at the time of publication.