Cannabis company Green Thumb Industries (TSX:GTII) is expanding its territory with

the closure of a previously-announced acquisition of Florida-based medical marijuana treatment centre KSGNF, one of just 14 such centres in the state. The move should be viewed as a positive, says analyst Russell Stanley of Beacon Securities, who sees GTII now possessing an early-entrant advantage in Florida, which legalized medical pot in 2016.

The acquisition — which comes with a purchase price of $46 million plus 32,596 multiple voting shares for a total cost of $58 million — gives Green Thumb authorization to operate a cultivation and processing facility as well as up to 30 dispensaries in the state, with management saying they have signed nine leases for retail stores throughout the state.

“The team continues to execute on our business plan to methodically build scale across the country, and closing on the Florida acquisition is an important milestone,” said GTII Founder and CEO Ben Kovler in a press release . “We are committed to disciplined capital allocation to optimize shareholder value and believe that serving the 21 million people across Florida communities with expanded options is firmly aligned with that strategy.”

Stanley says Florida has a lot going for it as far as medical cannabis goes, namely, that it’s the third most populous state in the country with 21 million people and currently more than 143,000 qualified patients but also that it has a significant barrier to entry, as the state has put limitations on the number of potential licensees (currently at 14).

“We have already included this transaction in our model, so we are not making material changes to our estimates at this time,” says Stanley in a client update on Thursday. “We nonetheless view the transaction positively, as it represents continued execution of the company’s growth strategy and firmly entrenches it in one of the largest markets in the United States.”

The analyst thinks GTII will produce revenue and Adj. EBITDA in 2018 of $59.1 million and $0.0 million and revenue and Adj. EBITDA in 2019 of $175.8 million and $43.1 million. For 2020, he projects revenue of $392.5 million and Adj. EBITDA of $140.0 million.

Stanley reiterates his “Buy” rating and C$32.00 target for GTII, representing a projected 12-month return of 68 per cent at the time of publication. (All figures in US dollars unless noted otherwise.)