The US cannabis space has been depressed for over a year now but Beacon Securities analyst Russell Stanley still likes the progress of Harborside Inc. (Harborside Stock Quote, Chart, News, Analysts, Financials CSE:HBOR), maintaining a “Buy” rating and C$2.25/share target price for a potential one-year return of 379 per cent in an update to clients on Wednesday. Harborside is one of the largest vertically integrated publicly traded cannabis companies in California, with a retail footprint encompassing 13 operating sites with another two in development, with a 230,000 square foot cultivation footprint being supported by another 100,000 square feet of potential near-term expansion capacity. Stanley’s updated analysis arrives after Harborside provided an update on its integration efforts after completing the acquisitions of Urbn Leaf in March, followed by Loudpack in April. “Management noted that it is on track to complete the first phase of integration by the end of this month, which is expected to produce more than $10 million in annualized cost savings,” Stanley said. “While we are maintaining our estimates/current PT, we view the progress and the associated granularity by management, as positives.” In working toward identifying best processes across its various companies in the integration process, Harborside has consolidated Urbn Leaf’s manufacturing/distribution operations at Loudpack’s facility, and has consolidated cultivation operations at the legacy Harborside campus in Salinas, where yields have improved 250 per cent year-over-year, reaching levels company management believes to be sustainable, according to Stanley. Stanley also noted that the company has initiated meaningful headcount reductions at both the senior management and facility level, with Harborside management now expecting its retail gross margin to exceed 60 per cent by the end of the year. "We are making outstanding progress to date in putting these four companies together," said Ed Schmults, Chief Executive Officer of Harborside in the company’s May 31 press release. "The annualized cost savings of $10.3 million achieved to date will substantially strengthen our financial performance, and we are pleased to be realizing the synergies so quickly.” In the same release, Schmults also indicated the company would be changing its name to StateHouse Holdings Inc in the coming weeks, with an expectation of heading into the second phase of its integration, which will be focused on continued cost reductions and gross margin enhancement. Looking ahead, Stanley forecasts Harborside to bring in $176 million in revenue in 2022 for a potential year-over-year increase of 193.3 per cent, followed by another projected bump to $242 million for a potential year-over-year increase of 37.5 per cent. Meanwhile, Stanley forecasts an EV/Revenue multiple of 1.5x in 2022, then dropping to a projected 1.1x in 2023. (All figures in US dollars except where noted otherwise.) On the margins, Stanley forecasts adjusted EBITDA of $11 million in 2022 for an implied margin of 6.3 per cent, which he projects to widen to a 22.3 per cent margin ($54 million adjusted EBITDA) in 2023. In terms of valuation, Stanley projects an EV/adjusted EBITDA multiple of 22.8x in 2022, with a drop to a projected 4.7x in 2023. Harborside has seen its share price hurled off a cliff with an 85 per cent loss since the start of 2022, though the figure increases to 91 per cent following its 2022 peak of C$4.80/share, which was achieved on February 15. Its most pronounced drop came on April 27, when it dropped 83 per cent in one day before hitting a 2022 low of C$0.34/share on May 9.