Cannara Biotech is a buy, this analyst says

Haywood Securities analyst Neal Gilmer says Cannara Biotech’s (Cannara Biotech Stock Quote, Chart, News, Analysts, Financials TSX:LOVE) first international supply agreement supports its growth outlook and accelerates expansion at its Valleyfield facility.

In a July 14 update, Gilmer reiterated his “Buy” rating and $3.00 price target on Cannara.

Cannara announced a two-year international supply agreement with Curaleaf International for the production and supply of bulk cannabis flower for international markets. The agreement begins Aug. 1 and has a potential aggregate value of up to $21-million if all supply volumes and terms are met.

“We view this announcement as a positive for the business and speaks to continued, consistent demand from international markets,” Gilmer said.

The agreement is Cannara’s first long-term international supply commitment. In connection with the deal, the company activated two additional cultivation zones at its Valleyfield facility during fiscal Q3, bringing the total to 14 of 24 zones.

Cannara expects to activate four more cultivation zones by the end of fiscal 2027, bringing total production zones to 18 of 24. Once complete, the expansion will increase annual production capacity to 75,000 kilograms and allow the company to reach its targeted capacity about one year ahead of its original fiscal 2028 timeline.

“We believe today’s announcement exemplifies the competitive advantage Cannara has established by providing quality cannabis at low production costs,” Gilmer said.

Curaleaf will support Cannara’s pursuit of EU-GMP certification at Valleyfield, which could eventually allow the company to export directly to international markets. In the meantime, cannabis supplied under the agreement will be dried and processed at Curaleaf’s EU-GMP facility in Canada before international release.

Cannara is scheduled to report Q3 2026 results on July 15. Gilmer forecasts revenue of $29.1-million, compared with consensus at $31.2-million, and Adjusted EBITDA of $7.9-million, ahead of consensus at $7.6-million.

“Cannara has demonstrated the quality of its brands by obtaining the sixth largest market share domestically,” Gilmer said. “Following the debt reduction transactions earlier this year, the Company is now poised to capture investors’ attention.”

Gilmer expects Cannara to generate Adjusted EBITDA of $31.3-million on revenue of $118.0-million in fiscal 2026, improving to Adjusted EBITDA of $37.4-million on revenue of $136.4-million in fiscal 2027.

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