Cannabis IM (IMCC) – Get report rose after Alliance Global Partners initiated coverage of the Israel-based company with a buy rating and a $ 10 price target.
Shares of the Tel Aviv company closed the regular session up 2.7% at $ 5.99.
“We see IMCC as an international game on legal cannabis, with the company particularly well positioned to benefit from the growing Israeli medical market and the potential market for adult use in the country,” analyst Aaron Gray said in a research note.
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Changes to Israeli medical laws in April 2019, including the easing of prescription procedures and the sale of cannabis in pharmacies, led to a significant increase in the patient count, more than doubling to 92,000, Gray said.
“While we see that the medical market continues to grow at a healthy rate, the prospects for adult use in the country are encouraging as the recently formed coalition included cannabis reform in the negotiations,” Gray said.
IMCC’s German operations continue to grow, the analyst said, and Gray believes it will be more of a growth engine by 2022. He sees IMCC leveraging distribution partnerships in Germany and other European Union markets as legalization occurs.
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While the COVID-19 pandemic has had an impact on Germany’s medical market, Gray said there is an opportunity for the market to continue to grow, particularly once COVID restrictions ease.
“Meanwhile, recent acquisitions increase the company’s exposure to Canada (through the premium segment),” Gray added, “although we continue to see international opportunities as the main growth drivers in the coming years, with supply constraints due to to GAP / GMP requirements “. potentially presenting some bottlenecks for growth. “
Cannabis stocks last week were mixed, with some stocks rising after Amazon. (AMZN) – Get report He backed a federal bill to legalize marijuana and said he would no longer examine marijuana for any position that is not regulated by the Department of Transportation.
Last month, Aurora Cannabis (ACB) – Get report It failed to meet Wall Street’s third-quarter earnings expectations, prompting several analysts to cut its ratings and price targets.
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