Analyst Believes Curaleaf Still Has Room to Grow

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In a recent update from Beacon Securities, equity research analyst Russell Stanley expects Curaleaf’s (CURA)(CURLF) share value to soar in the next 12 months. The analyst reemphasized his “buy” recommendation for the stock, and his target price stands at 25 Canadian dollars.

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Russell Stanley’s recommendation

Beacon Securities equity research analyst Russell Stanley expects Curaleaf stock to grow 255% in the next 12 months. Curaleaf stock closed at 7.13 Canadian dollars on Tuesday. Stanley’s target price of 25 Canadian dollars implies 3.5x the current trading price.

Due to its Acres Cannabis acquisition, Curaleaf expands its presence in one of the hot cannabis markets in the US. The company plans to add a new dispensary in Las Vegas to its existing one. Stanley expects multiple short-term catalysts such as the conclusion of its acquisition deals with Acres Cannabis, Select, ATG, and Grassroots.

Stanley also expects Curaleaf to report $261 million in managed revenue for fiscal 2019. In addition, he expects the company to report $21 million in EBITDA. Further, his forecasts for fiscal 2020 stand at $1.118 billion of managed revenue and $360 million of EBITDA.

In a recent report, Stanley said, “We view CURA’s news positively, as the acquisition strengthens the company’s presence in Nevada, one of the most highly coveted markets in the United States, while demonstrating execution against timeline guidance.”

Curaleaf’s 2020 outlook

Established in Massachusetts, Curaleaf is a cannabis giant with a presence in 19 states. In addition to its 77 retail outlets, the company also has licenses to open 54 more. The company also has 20 sites for cultivation and 26 facilities for processing.

Curaleaf is entering the Nevada cannabis market with its Acres Cannabis acquisition. The company has already acquired its processing and cultivation facilities. The company also obtained all the regulatory approvals required to acquire retail assets from Acres Cannabis. The acquisition deal was initially announced in the first quarter of 2019 for $70 million. The transaction price would be paid in a combination of $45 million in stock and $25 million in cash.

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The company expects to close the deal on January 1, 2020, which would add two dispensaries for Curaleaf in Las Vegas and Ely, Nevada. The dispensary in Las Vegas is a 19,000-square-feet flagship store for Acres Cannabis. The construction of the Ely dispensary is expected to be completed in the second quarter of 2020.

Management’s take on Curaleaf’s acquisition

Curaleaf’s management believes that Nevada is one of the best cannabis markets in the country. Curaleaf CEO Joseph Lusardi considers this deal to be a milestone in its expansion strategy.

Lusardi noted in a press release, “This acquisition solidifies our vertically integrated operations in Nevada, complementing our existing assets, and providing a platform to grow our retail and wholesale businesses in the state.”

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