ATB Capital Markets analyst Kenric Tyghe is holding the line on Harborside\u00a0\u00a0(Harborside Stock Quote, Chart, News, Analysts, Financials CSE:HBOR), maintaining a \u201cSpeculative Buy\u201d rating and target price of C$3.50\/share in an August 31 update to clients. Founded in 2006 and headquartered in Toronto, Harborside engages in the cultivation, manufacture, distribution, wholesale and retail of cannabis and cannabis products for the adult-use and medical markets in California, with retail locations in Oakland, San Jose and San Leandro, as well as a dispensary in Desert Hot Springs. The company also operates 47 acres of cultivation and production facilities in Salinas, approximately 60 miles of San Jose. Tyghe\u2019s updated analysis comes after Harborside released its second quarter financial results, which Tyghe noted to be below expectations. Harborside reported net revenue of $15.3 million (all report figures in US dollars) in the second quarter, marking 23.4 per cent sequential growth despite being relatively flat (0.5 per cent) from a year-to-year comparison, with Tyghe noting the figure came in well below his projected $19.8 million figure and the consensus $19.7 million. Prior to cultivation excise taxes, retail revenue accounted for $11 million in the quarter, with the other $5.2 million coming from wholesale revenues. Meanwhile, the company reported its sixth consecutive positive EBITDA at $1.1 million for a 7.2 per cent margin, though Tyghe indicated the figure was a significant miss on both the ATB projection of $2.8 million, as well as the Street expectation of $3.4 million. \u201cThe weaker than expected adjusted EBITDA print largely reflected the revenue miss and weaker than expected gross margin profile,\u201d Tyghe noted. Despite the relatively flat annual growth, Harborside executives are encouraged by the quarterly shifts the company has made. "I'm thrilled with the strong sequential growth we drove in our second quarter while continuing to make solid improvements to our gross margins and profitability," said Matt Hawkins, Chairman and Interim CEO of Harborside in the company\u2019s August 30 press release. "We continue to build a robust business, supported by our high-quality cultivation, leading consumer brands, and best-in-class retail experience. Our continued focus on improvement has allowed us to become a leader in the California cannabis market and we expect our business to continue to advance as we begin to integrate the synergies afforded by the Sublime Acquisition that closed in July." \u201cAs we move into the second half of the year, our focus remains on further scaling our reach through accretive M&A opportunities and building our leadership team, including our goal to bring in a new CEO, which together with our strong foundation will position Harborside for long-term growth," Hawkins added. The company was busy in the second quarter, completing cultivation upgrades to a 45,000 square foot greenhouse in its Salinas operations to install blackout curtains, supplemental LED grow lights and a new environmental control system. Harborside also made a move on the M&A front, completing the previously-announced acquisition of Oakland-based cannabis manufacturer Sublimation for $43.8 million. As part of the acquisition, former Sublimation CEO Ahmer Iqbal joined Harborside as its new Chief Operating Officer. Most recently, the company finalized the acquisition of its store in Desert Hot Springs, located approximately 110 miles east of Los Angeles, after having acquired 100 per cent of the issued and outstanding equity interest of Accucanna LLC; Harborside has operated the location under a management services agreement since December 2019. "As one of only two drive-through retail locations permitted in the state, and with our strategic location in the Coachella valley near the freeway, we are well-positioned to continue to service the local community and support the robust year-round tourism industry," Hawkins said in a press release. Tyghe projects improved revenue for the third quarter ($18.4 million) before dropping to a projected $12.6 million in the final quarter and $12.4 million in the first quarter of 2022. Overall, Tyghe projects total revenue for 2021 to be $84.4 million for a 33.1 per cent potential year-over-year increase, followed by a potential 13.4 per cent jump to $116.3 million in 2022. Tyghe forecasts the company\u2019s EBITDA to follow a similar track with a solid third quarter ($4.5 million projection) before falling off to $700,000 in the fourth quarter and $1 million for the opening quarter of 2022. From an annual perspective, Tyghe projects $12.6 million in adjusted EBITDA for 2021 (14.9 per cent margin), with an increase to $24.7 million (21.2 per cent margin) forecasted for 2022. The company\u2019s valuation data also appears to be coming into focus, with Tyghe projecting the EV\/Sales multiple to drop from 1.6x in 2020 to a projected 1.2x for 2021, then to 0.9x for 2022, and the EV\/EBITDA multiple to drop from 13.7x in 2020 to a projected 8x in 2021, then to 4.1x for 2022. Price-earnings data also comes into focus in 2021, with a projection of 196.9x in place for 2021, then dropping to a projected 40.4x for 2022. Harborside\u2019s stock price has dropped by 48.8 per cent over the course of 2021, reaching a high point of C$3.08\/share on February 10 and bottoming out at C$1.02\/share on September 2. At press time, Tyghe's C$3.50 target represented a projected one-year return of 224 per cent.