Expansion plans at CannTrust Holdings (CannTrust Holdings Stock Quote, Chart, News: CSE:TRST) have Echelon Wealth Partners analyst Russell Stanley reiterating his “Top Pick” rating on the stock.

On Monday, CannTrust announced it had received a Health Canada sales licence for the 250,000-square-foot phase 1 of its 46-acre cannabis greenhouse production facility in the Niagara region.

“The expansion of our greenhouse facility together with our Health Canada sales licence will allow Canntrust to meet growing market demand and provide maximum value to our customers, partners and shareholders. Our increased production together with our expanding product lines positions us to continue to build on our strong partnerships in both the Canadian retail recreational market and in the global emerging markets,” CEO Eric Paul said.

Stanley says CannTrust is making clear progress.

“TRST had announced receipt of its cultivation license on October 10th, so this sales license required just four additional months to obtain,” the analyst notes. “We view this compressed licensing time favourably, as it demonstrates the Company’s ability to navigate and efficiently deliver against Health Canada’s requirements. By comparison, the best, recent licensing time we are otherwise aware of belongs to MedReleaf Corp., which obtained its Bradford sales license just 6 months after the cultivation license. We believe the market has become quite focused on cultivation licenses, but in our view, subsequent licensing for sales, as well as the production and sale of other cannabis products, is critical as well. As of this morning, there are 89 facilities for cultivation, but just 37 of those (not quite 42%) are also licensed for sales, so the closing the gap between a cultivation license and actually generating revenue is no ‘slam dunk’. We therefore view the award of a sales license, particularly in such a short time frame, as a positive for CannTrust.”

In a research update to clients today, Stanley maintained his “Speculative Buy” and “Top Pick” rating and one-year price target of $16.75 on CannTrust Holdings, implying a return of 105 per cent at the time of publication.

Stanley thinks CannTrust Holdings will generate Adjusted EBITDA of negative $1.4-million on revenue of $20.7-million in fiscal 2017. He expects those numbers will improve to EBITDA of positive $33.2-million on a topline of $111.3-million the following year.