Last Friday, Columbia Care Inc. (CSE: CCHW) closed their acquisition of Green Leaf Medical which was expected to close during the third quarter. The total payment was roughly US$240 million, which is a combination of $45 million cash and $195 million in Columbia Care shares. They reiterate that this deal will be immediately accretive to their gross margins, EBITDA, and cash flows.
Columbia Care has 11 analysts covering the company with a weighted 12-month price target of C$14.17, or a 109% upside. Out of the 11, four have strong buy ratings, six have buy ratings and a single analyst has a hold rating. The street high comes from PI Financial with a C$19 price target, and the lowest sits at Beacon Securities with a C$12 price target.
In Canaccord’s note, Matt Bottomley reiterates his speculative buy rating and C$15 price target and that Columbia Care is their top pick. He says that Green Leaf Medical “should help further strengthen and vertically integrate CCHW’s existing exposure in Maryland, Ohio, Pennsylvania, and Virginia.” He believes that the deal will be immediately accretive due to them picking up the company at a very reasonable 4.8x ’21 EV/EBITDA while Columbia Care shares trade at roughly 19x.
Columbia Care is getting roughly 400,000 sq ft of canopy plus four operational dispensaries and 6 licenses over four different states. Canaccord believes that their combined share in Virginia will position them to take the top spot in the state. They will have 142,000 sq ft of the combined canopy and the ability to open 10 new stores.
In the other states, Columbia Care will get an operational 42,000 sq ft production facility, a processing site, and two dispensaries plus the right to open three more in Maryland. In Ohio, the company gets one operational location. In Pennsylvania, they get a massive 274,000 operational production facility.
Information for this briefing was found via Sedar and Refinitiv. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
