Chicago-based cannabis company Green Thumb Industries (Green Thumb Industries Stock Quote, Chart: CSE:GTII) is getting praise from analyst Russell Stanley of Beacon Securities for its acquisition of Integral Associates, a cultivation and retail operation in the state of Nevada.

Stanley has raised his forecasts for GTII as a result which in turn has pushed up his target price. The analyst now rates Green Thumb a “Buy” with a C$35.00 target (was C$32.00), representing a projected return of 119 per cent at the time of publication. (All figures in US dollars unless otherwise noted.)

The $290-million deal includes two cultivation and production facilities totalling 95,000 sq. ft. and three retail locations in the Las Vegas Valley, one of which is on the Las Vegas Strip and has been rated by Business Insider as Nevada’s #1 dispensary and a top 25 location in the US, Stanley points out.

“Combined with Green Thumb’s existing operations, closing will give GTII a total of three cultivation/production facilities and five dispensaries in a highly coveted market that delivered $425 million in cannabis sales in the first year following legalization of recreational use, exceeding the state’s projections by approximately 60 per cent,” says Stanley in a client update on Wednesday.

The deal, which the company says will be completed during the first half of 2019, brings with it a management change at Green Thumb, as Integral’s CEO and co-founder Armen Yemenidjian, previous Chair and CEO of Tropicana Las Vegas Hotel and Casino, will join as GTII’s President.

Stanley has increased his 2019 EBITDA estimate from $43 million to $55 million and his 2020 EBITDA estimate from $140 million to $175 million. The analyst stresses that at 11x EV/2020 EBITDA, GTII currently trades at a 71 per cent discount to the average amongst its peers with a market cap of over $1 billion.

The analyst says potential catalysts for GTII include its third quarter financials (due on November 27) and closing on an acquisition of a registered organization in New York.