Cannabis sector analyst Doug Cooper of Beacon Securities says assessments of Origin House’s (Origin House Stock Quote, Chart CSE:OH) value seem to have overlooked one piece of the company’s puzzle that may prove more significant as time goes by.

In a deal announced last September and still to be closed, OH is paying $25 million for 180 Smoke, which has 17 stores, mostly within the Greater Toronto Area, and nine lease commitments in other favourable communities. But last week, 180 Smoke became a licensed distributor in Canada for JUUL, the world’s leading e-cigarette/vape company and one which has about three per cent of the US$100 billion cigarette market in the United States.

The move could be a big deal for Origin House, Cooper says.

“In Canada, the cigarette market is ~$14 billion (excluding taxes) based on 27 billion cigarettes sold in 2017. A 3 per cent share of the vape market would represent a current $500 million market with a strong growth rate. If JUUL were to have a 75 per cent share in Canada, that would be a $375 million revenue market in Canada,” writes Cooper in a client update on Wednesday.

Cooper says the market has yet to fully account for 180 Smoke’s value for OH, saying that if the projected outcome vis a vis JUUL comes to fruition, then OH would be acquiring 180 Smoke “at a very good price.”

“At the current price, we do not believe much attention nor value accretion has been assigned to 180 Smoke. This could change dramatically with the addition of JUUL,” he says.

Cooper sees OH generating 2019 EBITDA of $13.5 million on revenue of $198.8 million and 2020 EBITDA of $50.2 million on a top line of $425.0 million. He is reiterating his “Buy” rating and $13.00 target price for OH, which represents a projected 12-month return of 38 per cent at the time of publication.