A “significant export opportunity” is helping to confirm Echelon Wealth Partners analyst Russell Stanley’s bullish take on CanniMed Therapeutics (CanniMed Therapeutics Stock Quote, Chart, News: TSX:CMED).

This morning, CanniMed announced it had signed a deal with South Africa’s Akula Trading 2 Pty. Ltd to explore the sale of CanniMed oil products in that country.

“Today’s announcement marks another very significant milestone in the company’s international expansion plans,” said CanniMed CEO Brent Zettl. “We look forward to working in collaboration with our new partners to provide not only our industry-leading medical cannabis products, but also the educational support that medical professionals need in relation to this important treatment option.”

Stanley notes that the South African market is still in its early days, but points out that thousands of patients already use cannabis oils in South Africa, despite a limited supply of the product.

“We view this development positively, as it represents another significant export market opportunity for CMED,” the analyst says. “Further potential catalysts include expansion updates, additional contract wins and improved financial results.”

In a research update to clients today, Stanley maintained his “Speculative Buy” rating and one-year price target of $14.00 on CanniMed, implying a return of 42 per cent at the time of publication.

Stanley thinks CanniMed will generate EBITDA of negative $3.9-million on revenue of $16.0-million in fiscal 2017. He expects those numbers will improve to EBITDA of positive $5.8-million on a topline of $42.1-million the following year.

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