Haywood Capital Markets has reiterated a Buy rating and $3.50 target price on WeedMD Inc (CVE:WMD) (OTCMKTS:WDDMF) shares following a recent site visit, saying it views the firm “as undervalued when compared to its peer group”.
In a note to clients, Haywood’s analysts recommended buying the shares at current levels, adding: “We believe that WeedMD is well-positioned to report strong quarterly growth in sales as its inventory builds.”
The analysts pointed out that their recent site visit to WeedMD’s Strathroy facility has left them remaining positive on the company’s story and they look for meaningful developments over the second half of 2019.
They said: “The outdoor growth appears to be progressing well to-date while the Company continues to cultivate in its ten rooms that have been licensed in the greenhouse.”
The analysts noted that WeedMD is awaiting approval from Health Canada on a license amendment for 10 additional 10,000 square feet greenhouse rooms at the Strathroy facility.
They pointed out that this would more than double the company’s greenhouse cultivation capacity and management is optimistic it will be granted an amendment in the near future.
The company is likely to submit an amendment for a sales and packaging license at the facility immediately after the approval of the additional rooms, the Haywood analysts added.
They said WeedMD will be harvesting near the end of October and is expecting to yield over 45,000 kilogrammes of cannabis, and anticipates roughly 25% of which will be Grade A dried flower, 35% Grade B, and the balance to be used solely for extraction purposes.