From Globe & Mail this AM London, Ont.-based Indiva Ltd. (
) is “absolutely dominating” the cannabis-infused edibles market through its “marquee” license agreements with a group of popular U.S. brands, according to Raymond James analyst Rahul Sarugaser.
“Presently, NDVA claims 50-per-cent edibles market share, or 2.5 per cent of the total market, landing this sub-$50-million market cap company in the top-10 LPs by sales,” he said.
“This, folks, is an M&A target if we’ve ever seen one. Some context: In April, Canopy Growth (CGC-NASDAQ, not covered), acquired Supreme Cannabis (FIRE-TSX, not covered) — a company with smaller market share than NDVA, albeit operating in a different category — for $435-million. Again, NDVA’s market cap is $50-million. The asymmetry we see here is stunning.”
Mr. Sarugaser initiated coverage of Indiva with a “strong buy” recommendation and $1.75 target, seeing “compounding market forces” driving its growth. The average target on the Street is 63 cents.
“Benefiting from our conversations with NDVA management, our visits to NDVA’s manufacturing facilities in London, and our study of NDVA’s sales and operating results quarter after quarter, we conclude that NDVA is a top-shelf operator that consistently produces high-quality, fast-selling products that Canadian consumers seem to love,” he said.
GLTA