There’s a lot more where that came from. That’s Beacon Securities analyst Doug Cooper’s takeaway from first quarter results released by Village Farms International (Village Farms Stock Quote, Chart TSX:VFF). The analyst is holding steady on his “Buy” recommendation and $60.00 target price, which represented a projected return of 254 per cent at the time of publication.

Produce turned cannabis grower Village Farms reported its Q1 ended March 31, 2019, last week, with the company generating a top line of $31.9 million, $14.4 million of which came from its cannabis joint venture Pure Sun Farms. Cooper says the better-than-expected cannabis revenue came with a 69 per cent gross margin and a 60 per cent EBITDA margin, tops in the industry, says Cooper, who sees even better results in upcoming quarters.

“While the Q1 results should be creating significant awareness that PSF could be the largest and most profitable cannabis company operating in the Canadian marketplace and the Q2 results should further enforce such a notion, it is perhaps the Q3 results that should cement PSF/VFF as a major North American player,” Cooper said in a Monday update to clients.

The analyst says the outlook for Q2 is “extremely positive,” pointing to the fact that PSF was able to generate its Q1 results with only about a quarter of its Delta 3 greenhouse’s capacity being used. Cooper notes that by Q3, the company expects to be at full capacity at an annual run-rate of about 75,000 kg, which would represent five times its Q1 results.

Cooper also points out that PSF expects to get its packaging license by the end of June, which would result in a 20-per-cent bump in its price per gram. Further, he says VFF’s hemp operations in the US, with first harvest by the fall, will add roughly US$15.6 million in revenue, with further production to come in 2020.

“While it should be very apparent now, but before the end of the year, we believe it will be well appreciated by the broader investment community that VFF/PSF is a ‘best in class’ Canadian operator and that it has the potential to be a major player in the burgeoning hemp/CBD business in the United States,” says Cooper. “One can get all of this for less than 6x our FY21 EBITDA (D3 + D2) and potentially much less given we have not included any hemp/CBD revenue in our forecasts. Such a multiple is a fraction of its Canadian peers.”

Cooper is calling for fiscal 2019 revenue and Adjusted EBITDA of $295.0 million and $38.4 million and fiscal 2020 revenue and Adjusted EBITDA of $430.0 million and $149.1 million.