Investors looking for a cannabis penny stock should consider Grown Rogue International (Grown Rogue International Stock Quote, Chart CSE:GRIN), says M Partners analyst Damian Karp. On February 25, Grown Rogue announced it had signed a binding agreement to acquire cannabis licenses in the Michigan market. "With the second-highest total number of medical cannabis card holders in the United States, Michigan's legalization of cannabis for adult use presents a very large cannabis market opportunity. Significant barriers to entry at the local level add meaningful value to the limited number of municipal licences approved," CEO Obie Strickler said. "We are very diligent in our expansion strategy and in finding the right partners to take the proven Grown Rogue platform into the state. Combining our expertise enables us to efficiently navigate and comply with the regional regulatory environment and rapidly expand the Grown Rogue footprint and brand." The analyst thinks this development will contribute materially to GRIN's top and bottom lines. "We believe the Michigan news is positive for Grown Rogue as the two dispensaries and the production from the cultivation and processing facility will provide a strong boost to revenues beginning in 2020. In our forecast the Michigan segment will contribute US$6.9M to 2020 revenue (24% of total revenue) and US$1.7M to 2020 EBITDA (25% of total EBITDA)," Karp says. "We value the Michigan segment and the Company at 12.0x 2020 EV/EBITDA, approximately in line with its Multi-State Operator peers." In a research update to clients today, Karp maintained his "Buy" rating and one-year price target of $1.00 on Grown Rogue, implying a return of 264 per cent at the time of publication. Karp thinks GRIN will post Adjusted EBITDA of (All figures USD) negative $3.8-million oon revenue of $9.0-million in fiscal 2019. He expects those numbers will improve to EBITDA of positive $7.0-million on a topline of $29.3-million the following year. "We believe premium, high-quality branded, organic cannabis and its derivatives will continue to differentiate Grown Rogue in the ultracompetitive Oregon market and in markets which it enters in the continental United States," Karp adds. "Grown Rogue’s indoor and outdoor organic growing platform is ideal for growing high quality, terpene-rich cannabis. The team's depth of cultivation experience has resulted in a consistent and high quality product available in Oregon and California."