New Price 5.50 GGB | Cannabis , CBD retail done right.Investment recommendation: We are initiating coverage on Green Growth Brands ("GGB") with a SPECULATIVE BUY rating and C$5.50 target price. We like Green Growth Brands for its exposure to the high growth cannabidiol ("CBD") market, its strong retail focused management team, relationship with the Schottenstein family and their retail network, and exposure to the US cannabis market through the companys presence in Nevada. Given the risks and uncertainties surrounding cannabis regulations, and other market factors, we believe a SPECULATIVE BUY rating is appropriate at this time. Investment highlights: Green Growth Brands operates a highly productive dispensary in Las Vegas, called The Source. The company will also soon be rolling out a consumer-focused line of CBD products, initially focused on topicals and balms, which we believe is a key differentiating factor compared to other cannabis producers. Unlike many of its cannabis peers, Green Growth Brands executives have a wealth of retail experience, with CEO Peter Horvath having held senior positions at a number of well-known retailers, including DSW and L Brands. Furthermore, the company's largest shareholder with a 29% stake, the Schottenstein family, has a long history in mass market retail in the United States, a relationship which we believe Green Growth Brands will be able to leverage as it rolls out its consumer-focused CBD product lines. This, in our view, reduces the execution risk of Green Growth Brands getting its product on to mass market retail shelves, providing the company with a key marketing and distribution advantage. We believe Green Growth Brands will build out incremental dispensary locations in Nevada, where it currently has eight outstanding license applications, and enter into new states over time, through both greenfield build-outs and acquisitions. While the company is in the early stages of an ambitious growth plan, Green Growth Brands is exceptionally well capitalized with a pro forma net cash position of $141 million. This should allow it to execute on its growth plans, while lending stability to the company in what has been a volatile cannabis market. We are forecasting EBITDA to grow to $76 million by 2020, from $24 million in 2019, driven by YoY revenue growth of +200% in 2020, with positive free cash flow commencing in 2020. Valuation: Our C$5.50 target price reflects our sum-of-the-parts valuation, which values the company's cannabis business at 9.0x our 2020 EBITDA estimate of $43 million and the CBD business at 12.5x our 2020 EBITDA estimate of $33 million, plus net cash, which we then convert into CAD to account for the CSE-listed share price. We value Green Growth Brands in line with its early stage peers. We believe the company is fully funded to achieve its 2020 EBITDA targets, and boasts a management team with a strong track record of retail success, which we believe will be key to gaining market share in the consumer-focused CBD market. Derek Dley, CFA | Analyst | Canaccord Genuity