May 29, 2019 / 10:21 AM / 6 months ago

BUZZ-Eight Capital initiates Cannabis retailers with 'buy' recommendation

** Eight Capital initiates coverage on three Cannabis retailers - Alcanna Inc (“buy,” PT: C$9.50), Fire & Flower Inc (“buy,” PT: C$2.75) and Westleaf Inc (“buy,” PT: C$1.10)

** Says the cannabis retail sector could gain increasing traction in 2019

** Supply of cannabis begins to ease, leading to additional licenses and store openings - Eight Capital

** Says commoditization of cannabis could compress wholesale prices and increase margins for cannabis retailers

** Alcanna is transitioning into a growth-oriented liquor and cannabis retailer, recovering from a declining liquor business and unsuccessful U.S. expansion - Eight Capital

** Says co could see top-line and EBITDA growth with the expansion of Wine and Beyond store locations

** Brokerage says Fire and Flower is well positioned to build a leading retail brand

** Says co well-funded to reach 71 stores in total by FY 2020 with ~$26 mln of cash in hand and $63 mln of proceeds from the potential exercise of warrants and options

** Westleaf has cultivation and processing facilities in pipeline and currently three retail stores are in operations - Eight Capital

** Brokerage believes continued roll-out of stores should generate meaningful revenues and EBITDA in FY 2019 and 2020 (Reporting By Aniruddha Chakrabarty)

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