As the still unknown date for Canadian legalization draws nearer, GMP Securities analyst Martin Landry has turned part of his focus to Canopy Growth Corp’s (TSX:WEED) international prospects.

On February 14, Canopy Growith Corp. reported its Q3, 2018 results. The company earned $11.01-million on revenue of $21.7-million.

“The company’s record revenues in the quarter were driven by a significant increase in domestic sales across all product formats as well as sales in the German medical market, which is beginning to show impressive growth,” CEO Bruce Linton said. “Success in future global medical markets and the recreational cannabis market in Canada will depend not only on capacity, but on strong execution and securing supply agreements with the provinces today. I believe our success on both these fronts is evident as you look at our accomplishments this past quarter. With the sector’s largest inventory of diversified, high-quality cannabis products, demonstrated distribution capabilities, robust IT infrastructure, a vast production footprint, investments in seven provinces across the country, and a proven record of leadership and execution, we are now excelling into the anticipated recreational sector with unparalleled opportunity. With millions of square feet of production expansion under way across the country and around the world, as well as capacity offtake from our expanding roster of CraftGrow partners and through Canopy Rivers Corp., we will ensure a sufficient and timely flow of supply to serve our lineup of unparalleled premium brands.”

Landry says this was a mixed quarter from his perspective, with revenue higher than expected but EBITDA missing the target.

The analyst notes the company’s recent efforts on the domestic front, including a deal to provide Quebec’s SAQ with twelve tonnes of cannabis. But Landry says a management mention of interational pricing caught his attention as well.

“International pricing of ~€8.00 per gram. Management mentioned it obtained €8 per gram for international sales, higher than the Canadian average price of $8 per gram,” the analyst notes. “This offers a valuable arbitrage opportunity to export cannabis for the next 3-4 years before each market develops its own domestic production.”

In a research update to clients Thursday, Landry maintained his “Buy” rating and one-year price target of $40.00 on Canopy Growth Corp., implying a return of 47.3 per cent at the time of publication.

Landry thinks Canopy will generate EBITDA of negative $20.7-million on a topline of $78.1-million in fiscal 2018. He expects those numbers will improve to EBITDA of positive $69.3-million on revenue of $376.9-million the following year.