The possibilities for CanniMed Therapeutics (TSX:CMED) continue to swirl, but Echelon Wealth Partners analyst Russell Stanley says the stock is still an attractive investment.

On Monday, CanniMed issued a press release urging shareholder to support its bid for Newstrike and reject the hostile takeover from Aurora Cannabis, which it referred to as offering “phantom value”.

“The premium is inadequate and Aurora knows CanniMed shares are worth more. Aurora’s executive-vice president, Cam Battley, recently told BNN (Business News Network) that, “It makes sense for us to grab assets in Canada — at incredibly attractive valuations and they’ll be worth two or three times those valuations in 12 months.”

This implies an expected minimum value of $30 for CanniMed. Aurora is trying to grab CanniMed shares without paying fair value for them,” the press release said. “Aurora has capped CanniMed shareholders’ upside but left them with significant downside risk. The potential value offered has been capped at $24 (based on a formula related to Aurora’s share price and payable in Aurora shares) offering CanniMed shareholders no exposure to market upside nor additional value created by CanniMed or the industry prior to close.

CanniMed shareholders have no downside protection at a time when Aurora has significant cost overruns and delays at Aurora Sky, as well as numerous operational issues, including two product recalls. It is extremely telling that the shareholders who have entered into off-market lock-up agreements have included downside protection on the share price of CanniMed shares at $16 and $18 (based on certain conditions), but no protection is offered to other CanniMed shareholders.”

Stanley notes the noise around the name but says to him, CanniMed looks cheap.

“As of writing, CMED is still trading at a 18% discount to the capped offer price of $24/shr in ACB stock, suggesting uncertainty with respect to the likelihood of this bid succeeding and/or the value of the ACB stock that would be issued,” the analyst says. “With ACB trading at $7.31/shr as of writing, and assuming that share price were to persist and become the reference price for the acquisition, CMED shareholders would receive approximately 3.3 shares of ACB per share of CMED owned.”

In a research update to clients Monday, Stanley maintained his “Speculative Buy” rating and one-year price target of $24.00 on CanniMed Therapeutics, implying a return of 21 per cent at the time of publication.

Stanley thinks CanniMed will generate Adjusted EBITDA of negative $1.9-million on revenue of $16.7-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.