Mackie resumes coverage of WeedMD; ups PT to $4
Mackie Research Capital resumed coverage of WeedMD (TSXV:WMD) and raised its price target to $4 from $3 after the company completed a $34.5-million offering of units. The stock closed at $2.60 on Jan. 16.
WeedMD is a Health Canada-approved licensed producer involved in cultivating, storing and selling medical marijuana.
Analyst Greg McLeish writes that WeedMD’s pro-forma cash position is now $59-million. “This strong cash position will allow management to continue with its capital expansion plans, pursue strategic acquisitions, and address potential working capital requirements.”
WeedMD intends to use 60% of the net proceeds of the offering to retrofit an additional four acres of greenhouse capacity into cannabis production, increasing production to 35,000 kg per year from 21,000 by late 2019.
Mr. McLeish said WeedMD remains well positioned in the long-term care market. On Dec. 1, the company secured a license from Health Canada to sell cannabis oil.
WeedMD is the first Canadian licensed producer to sign multiple supply contracts for senior resident care and these programs are being rolled out now that the company has the ability to sell cannabis oil, he added. The company recently introduced the Axis line of cannabis oil, specifically formulated for the seniors’ market, including long-term care and assisted living.