Paradigm starts CannTrust Holdings at buy; PT $18

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Paradigm Capital launched coverage of CannTrust Holdings (TSX:TRST) with a “buy” rating and $18 price target. The stock closed at $8.35 on Jan.18.

“CannTrust brings to the cannabis space a practice of professionalism and manufacturing rigor rarely seen in the industry,” writes analyst Rahul Sarugaser.

He said the company emphasizes “standardization among its products and the development of gold-standard clinical evidence to support its products’ safety and efficacy treating specific indications: an approach with more similarities to Pharma than most of its contemporaries throughout the cannabis industry.”

According to Mr. Sarugaser, one important aspect that distinguishes CannTrust from its peers in the cannabis space is the company’s focus on developing indication-specific clinical evidence.

While CannTrust is running an impressive industrial cannabis operation, he said the company’s two clinical programs, including a Phase 2 study in chronic pain and a Phase 3 program in ALS, “bear high intrinsic value that have, ostensibly, been missed by the market.”

Mr. Sarugaser said the company’s continued commitment to clinical development could unlock a “future that not only has patients viewing CannTrust as a trusted source of medical cannabis, but will also have physicians viewing CannTrust as a trusted source of clinical data.”

Michelle Carr