WeedMD rated a Buy after securing $39M financing for Strathroy expansion
WeedMD Inc (CVE:WMD)’s nearly $40 million financing has garnered the cannabis company a ‘buy’ rating from research firms Eight Capital and Haywood Securities.
Eight Capital set a target price of C$4.50 for the stock, while Haywood set its estimate at $3.50. Shares of WeedMD closed Thursday in Canada at $2.
READ: WeedMD enters into C$39M debt facility with Bank of Montreal, acquires 98-acre licensed Strathroy property
“We view the announcement that WeedMD has secured a debt facility with BMO as positive, both raising the profile of the Company but also providing it with non-dilutive funds; enabling the purchase of the 98-acre property and leaving additional funds to be used strategically,” wrote Haywood’s analysts.
The Toronto-based company recently announced a credit facility for up to $39 million in secured debt financing to expand its Strathroy, Ontario land package to include outdoor cultivation.
The new outdoor grow operation is expected to increase the company’s production footprint by around 50,000 kilograms per year.
“Outdoor grow could provide the company with a low-cost source of supply to complement its greenhouse facility,” Eight Captial analysts wrote in its report.
Although the company has secured the support of the Strathroy municipality, analysts did not include the expanded production capacity when calculating their estimates due to uncertainty surrounding licensing, construction and cultivation yield, according to Eight Capital.
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Story by ProactiveInvestors
Source: https://www.proactiveinvestors.com/companies/news/218006/weedmd-rated-a-buy-after-securing-39m-financing-for-strathroy-expansion-218006.html
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