He’s not yet ready to recommend the stock, but recent developments have Canaccord Genuity analyst Matt Bottomley raising his price target on Cronos Group (TSXV:MJN).

On Monday, Cronos Group announced it had been granted two medicinal cannabis cultivation and research licences in Australia and will launch a new concern called Cronos Australia Pty. Ltd. to do business in that country.

“The launch of Cronos Australia as our newest international hub marks an important milestone for the company. Cronos is focused on providing pharmaceutical-grade medicine to patients in need, and we are excited that our Australian team shares this vision and commitment,” said Mike Gorenstein, chief executive officer of Cronos Group.

Bottomley says he sees upside in the international efforts from Cronos Group.

“With international markets continuing to develop (along with Cronos’ international strategy), we have elected to add incremental value into our SOTP (sum-of-the-parts) analysis to account for Cronos’ increasing international reach,” the analyst says. “As a result, we have added in ~15,000 kg of international sales into our long-term forecasts (to account for Germany, Israel export, and Australia optionality) that we believe are fully funded via Cronos’ most recent equity raise….)”

But the analyst says he currently sees the stock as fully valued.

“Although we continue to believe that Cronos has an attractive differentiated strategy versus many of its peers (including ownership of multiple LPs and an increasingly robust international strategy), the company currently trades at a two-year fwd EV/EBITDA multiple of ~21.0x, versus its peers at ~14.0x. In our view, a premium is justified, but as the top four Canadian LPs by market cap (with greater invested capital, production capacity and strong international positioning) now trade at <20.0x their two-year fwd EV/EBITDA, we would remain on the sidelines at current levels," Bottomley says. In a research update to clients today, Bottomley maintained his "Hold" rating, but raised his one-year price target on Cronos Group from $4.15 to $6.00, implying a return of negative 18.5 per cent at the time of publication. Bottomley thinks Cronos Group will generate Adjusted EBITDA of negative $2.9-million on revenue of $6.0-million in fiscal 2017. He expects those numbers will improve to EBITDA of positive $13.0-million on a topline of $44.0-million the following year.