Beacon Securities analyst Doug Cooper is expecting organic and inorganic growth from California-based cannabis company Vibe Growth (Vibe Growth Stock Quote, Chart, News, Analysts, Financials CSE:VIBE), which he calls an overlooked gem in the US cannabis space. Cooper launched coverage of Vibe on Monday with a \u201cBuy\u201d rating and C$2.60 target price, which at the time of publication represented a projected 12-month return of 145 per cent. Sacramento, California-based Vibe Growth is a vertically integrated cannabis company with currently four retail locations (three in northern California and one in Portland, Oregon) and two cultivations, one of which is in the process of expansion. The company operates its Vibe By California retail brand and is set to open two more stores in the summer of 2021. Formerly Vibe Bioscience, the company had a busy 2020, last year having bought its high-quality cultivation facility in Crescent City, California, bought the cannabis assets of Cathedral Asset Holding Corp in September, changed its name to Vibe Growth in October and acquired its Portland store in November. On the name change, Vibe said in a press release last year that it \u201creflects the Company\u2019s progressive growth, expansion plans, and more precisely describes the Company's advancement as a vertically integrated cannabis organization with operations that focus on retail store operations; cannabis greenhouse cultivation.\u201d Like many names in the US cannabis space, VIBE had a good 2020, with its share price going from C$0.075 per share to C$0.60 by the end of December. So far in 2021, the stock is up a further 77 per cent. But Cooper sees more upside, with the analyst basing his argument not only on the merits of the company but on the state of California\u2019s cannabis market, which he says has been neglected for some time but is now set to receive an influx of capital. Cooper said for a number of reasons, investment has shied away from California in favour of markets east of the Mississippi. The knock has been that California\u2019s unlimited license framework is less attractive compared to limited license states like Illinois and Florida, that public companies (e.g., MedMen) have so far fared relatively poorly in California and that the state\u2019s illicit market is still too strong. These circumstances have led to what Cooper called a massive under-investment in California, which coupled with the already huge size of the CA market and its excellent growth prospects as the legal market matures make for a unique opportunity for investors. \u201cEarly indications support our thesis that capital is going to flow into California in 2021 and beyond,\u201d Cooper wrote. \u201cWe point to Planet 13 building a Super Store in Santa Ana (expected opening July), 4Front Holdings building a 185,000 sq ft manufacturing facility in Commerce (outside of Los Angeles with expected opening in April) and Green Thumb Industries opening its first Essence retail store in California (Pasadena).\u201d \u201cSuccess will breed success and if such high profile projects are successful, we would expect the prior pre-conceived notions about California to diminish and more capital will subsequently flow to companies operating in the state,\u201d Cooper wrote. California is also ripe for consolidation, Cooper argued, with there being an opportunity for a well-funded and profitable company to create a \u201cWest Coast MSO\u201d by picking up accretive acquisitions. Cooper said VIBE should be in the mix in that discussion, with now $13 million in cash and an EBITDA margin of 14 per cent, which should expand with higher sales per store and greater vertical integration. \u201cWe believe investors can \u2018win\u2019 under a few different scenarios including a multiple expansion on own fundamentals as the company gains greater investor visibility but also as an acquisition target. In fact, we believe the time is right for the creation of a West Coast MSO, perhaps including California, Nevada and Arizona. As Vibe grows its footprint to 10-12 stores, we believe it could be incredibly strategic as part of such an organization,\u201d Cooper wrote. \u201cThe combination of anticipated strong revenue growth, a high degree of profitability and a significant valuation discount to its peer group leads us to believe the shares of the company represent an excellent risk-return trade-off,\u201d Cooper said. Cooper is projecting VIBE to generate 2021 revenue and adjusted EBITDA of $41.1 million and $11.4 million, respectively, and 2022 revenue and EBITDA of $50.4 million and $17.2 million, respectively. Vibe last reported its financials in January where its preliminary numbers for its fourth quarter 2020 called for revenue exceeding $6.5 million, which would be a record for the company. Cooper estimated that VIBE is trading at a discount to its peers, trading at about 4x his 2022 EBITDA forecast versus its peer group at 12x-16x. \u201cThe combination of anticipated strong revenue growth, a high degree of profitability and a significant valuation discount to its peer group leads us to believe the shares of the company represent an excellent risk-return trade-off,\u201d Cooper wrote.