The launch of a new “premium” brand at MedReleaf Corp. (MedReleaf Stock Quote, Chart, News: TSX:LEAF) is getting the thumbs up from Echelon Wealth Partners analyst Russell Stanley.

On Tuesday, MedReleaf announced the launch of AltaVie, which management described as the company’s premium recreational cannabis brand.

“With the launch of AltaVie, Medreleaf reinforces its position as a leader in the industry, adding to a portfolio of brands to meet the diverse needs of Canadians,” CEO Neil Closner said. “With AltaVie, we now have a premium wellness line that complements our recreational and medical brands, all of which lever the company’s award-winning products, leading quality and production standards.”

Stanley says this move is consistent with the company’s vision.

“LEAF has focused its medical products on premium product positioning and on high lifetime value customer segments, and we view AltaVie as a continuation of this strategy in the recreational market, he says. “There will be a full suite of cannabis products eventually offered under the AltaVie brand, utilizing strains that should resonate with premium/wellness conscious consumers. LEAF has already launched a cannabis-free product under the AltaVie brand called Cannabis Crunch, which we understand is cannabis flavoured chocolate toffee and is currently available in 200 stores across Canada.”

In a research update to clients today, Stanley maintained his “Speculative Buy” rating and one-year price target of $32.50 on MedReleaf, implying a return of 92 per cent at the time of publication.

Stanley thinks MedReleaf will generate Adjusted EBITDA of $1.9-million on revenue of $43.9-million in fiscal 2018. He expects those numbers will improve to EBITDA of $45.1-million on a topline of $137.4-million the following year.

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