September 29, 2021 (Investorideas.com Newswire) “The expansion is expected to drive topline sales with greater efficiency,” noted a Noble Capital Markets report.
Times have dramatically changed since the Controlled Substances Act was passed under Richard Nixon in 1970, making consumption of cannabis illegal in the U.S. Now fully legal in 18 states and only totally illegal in four, cannabis is now lawfully enjoyed in many forms, from candies to oils.
In a Sept. 28 research note, Noble Capital Markets analyst Joe Gomes reported that Stem Holdings Inc. dba Driven By Stem (STEM:CSE; STMH:OTCQX) received a license to open a cannabis distribution center in the city of Mendota in Central California, and plans to debut a 2,000-square-foot facility of this type there in October. Also, the company intends to target a newly opened, nearby market for retail cannabis sales: the city of Fresno.
Gomes highlighted that with this new distribution hub, the Florida-based cannabis products and technology company will be able to better serve its customers, via its Budee e-commerce platform, in four California counties.
“The expansion is expected to drive topline sales with greater efficiency, as the company anticipates savings of up to $1 million in operating expenses, with significant savings in gross receipt taxes,” Gomes commented.
California as a whole is the country’s largest cannabis market, Gomes pointed out. Current adult use sales there are estimated to be between $4.7 and $5.5 billion and projected to increase to $6.5 billion in the next two years.
In other news, another California city, Fresno, just allowed retail sales of cannabis, creating a new market on which Stem Holdings can capitalize.
“We expect the Fresno market to quickly grow with the new approval and be an attractive market for Driven by Stem,” Gomes wrote.
He noted that even though the company’s revenue ramp-up has been slower than expected, Noble maintains its Outperform rating on Stem.
“We believe the company’s merger with Driven Deliveries has established Stem as the first cannabis cultivator and technology omnichannel retailer with e-commerce ordering and express and next-day delivery, providing Stem with not only a first mover advantage but [also] a defensible moat,” he wrote.
Noble’s 12-month price target on Stem is $2 per share, four times the current share price of about $0.25.
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Stem Holdings Inc. dba Driven By Stem. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with Stem Holdings Inc. dba Driven By Stem. Please click here for more information. An affiliate of Streetwise Reports is conducting a digital media marketing campaign for this article on behalf of Stem Holdings Inc. dba Driven By Stem. Please click here for more information.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Stem Holdings Inc. dba Driven By Stem, a company mentioned in this article.
6) This article does not constitute medical advice. Officers, employees and contributors to Streetwise Reports are not licensed medical professionals. Readers should always contact their healthcare professionals for medical advice.
Disclosures from Noble Capital Markets, Inc., Stem Holdings Inc. dba Driven By Stem, Sept. 28, 2021
All statements or opinions contained herein that include the words “we”, “us”, or “our” are solely the responsibility of Noble Capital Markets, Inc. (“Noble”) and do not necessarily reflect statements or opinions expressed by any person or party affiliated with the company mentioned in this report. Any opinions expressed herein are subject to change without notice. All information provided herein is based on public and non-public information believed to be accurate and reliable, but is not necessarily complete and cannot be guaranteed. No judgment is hereby expressed or should be implied as to the suitability of any security described herein for any specific investor or any specific investment portfolio. The decision to undertake any investment regarding the security mentioned herein should be made by each reader of this publication based on its own appraisal of the implications and risks of such decision.
This publication is intended for information purposes only and shall not constitute an offer to buy/sell or the solicitation of an offer to buy/sell any security mentioned in this report, nor shall there be any sale of the security herein in any state or domicile in which said offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or domicile. This publication and all information, comments, statements or opinions contained or expressed herein are applicable only as of the date of this publication and subject to change without prior notice. Past performance is not indicative of future results.
Noble accepts no liability for loss arising from the use of the material in this report, except that this exclusion of liability does not apply to the extent that such liability arises under specific statutes or regulations applicable to Noble. This report is not to be relied upon as a substitute for the exercising of independent judgement. Noble may have published, and may in the future publish, other research reports that are inconsistent with, and reach different conclusions from, the information provided in this report. Noble is under no obligation to bring to the attention of any recipient of this report, any past or future reports. Investors should only consider this report as single factor in making an investment decision.
Noble professionals including traders, salespeople and investment bankers may provide written or oral market commentary, or discuss trading strategies to Noble clients and the Noble proprietary trading desk that reflect opinions that are contrary to the opinions expressed in this research report.
The majority of companies that Noble follows are emerging growth companies. Securities in these companies involve a higher degree of risk and more volatility than the securities of more established companies. The securities discussed in Noble research reports may not be suitable for some investors and as such, investors must take extra care and make their own determination of the appropriateness of an investment based upon risk tolerance, investment objectives and financial status.
Company Specific Disclosures:
The Company in this report is a participant in the Company Sponsored Research Program (“CSRP”); Noble receives compensation from the Company for such participation. No part of the CSRP compensation was, is, or will be directly or indirectly related to any specific recommendations or views expressed by the analyst in this research report.
Noble has provided capital markets advisory services in the last 12 months. Noble has received compensation for non-investment banking services in the past 12 months. The Company has attended Noble investor conference(s) in the last 12 months.
Noble intends to seek compensation for investment banking services and non-investment banking services (securities and non-securities related) within the next 3 months.
Noble is not a market maker in the Company.
Disclaimer/Disclosure: Investorideas.com is a digital publisher of third party sourced news, articles and equity research as well as creates original content, including video, interviews and articles. Original content created by investorideas is protected by copyright laws other than syndication rights. Our site does not make recommendations for purchases or sale of stocks, services or products. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. All investing involves risk and possible losses. This site is currently compensated for news publication and distribution, social media and marketing, content creation and more. Disclosure is posted for each compensated news release, content published /created if required but otherwise the news was not compensated for and was published for the sole interest of our readers and followers. Contact management and IR of each company directly regarding specific questions.
More disclaimer info: https://www.investorideas.com/About/Disclaimer.asp Learn more about publishing your news release and our other news services on the Investorideas.com newswire https://www.investorideas.com/News-Upload/ and tickertagstocknews.com