We’ll start with Columbia Care, a small-cap player in the medical, pharmaceutical, and health and wellness cannabis sector. The company operates is based in New York and operates in over a quarter of the US states plus the EU. Columbia Care has built up its operations on a state-by-state basis, taking advantage of local legalization regimes. The company boasts 54 facilities and 35 operating licenses, giving it insight into regulation, compliance, cultivation, quality control, and the myriad customer issues required for success in a rapidly growing industry.
Columbia Care’s revenues have been showing strong growth despite the coronavirus pandemic. On the top line, the company recorded $26 million in 1Q20 and $28 million in 2Q20. Share price has moved in-line with the revenues, growing 48% year-to-date. The performance reflects growing demand in the medical marijuana sector and among non-prescription CBD wellness products.
In early September, Columbia Care signed off on a $69 million deal to acquire the smaller California-based company Project Cannabis. The move adds significantly to Columbia’s presence in southern California, including an additional 100 dispensaries to the company’s network.
Link Title price target on Columbia Care shares suggests a huge upside of 167% for the coming year – and fully supports his Buy rating.)
Overall, Wall Street agrees with Bottomley – Columbia has a Strong Buy from the analyst consensus, based on 3 Buys and 1 Hold set in recent weeks. The stock is selling for just $3.68 (C$4.87), and the average price target of US$7.39 suggests a one-year upside of nearly 101%.