A pair of new developments have Echelon Wealth Partners analyst Russell Stanley feeling upbeat about marijuana player CannTrust Holdings (CannTrust Holdings, Chart, News: TSX:TRST).

On Wednesday, CannTrust announced it would launch a range of new cannabis oil vegan-based hard shell capsules.

“We are excited to be moving into this new category of the medicinal cannabis market, one that makes it safe and easy for patients to self-administer the correct dosage in a familiar format. Canntrust opted for the newest encapsulation technology so that we can use vegan-based capsules rather than an animal byproduct gelatin capsule. In addition, our capsules are colour coded for ease of use and patient safety,” said Eric Paul, chief executive officer.

Also today, the company announced it would partner with Grey Wolf Animal Health Inc. to develop cannabis products for pets.

Stanley says he views these developments positively.

“This morning, CannTrust made two product development announcements that we view positively,” the analyst says. “TRST will begin selling vegan hard shell capsules next week, an important product for the medical market as it ensures consistent dosage. TRST also signed a letter of intent (LOI) to develop cannabis-based products for pets, the first such announcement we have seen in Canada. Further potential catalysts include product development news, expansion updates, and improved financial results.”

In a research update to clients today, Stanley maintained his “Speculative Buy” rating and one-year price target of $18.50 on CannTrust, implying a return of 187 per cent at the time of publication.

Stanley says CannTrust is currently trading at a “remarkable discount” that he says is unwarranted given how the company has performed.

“TRST had an exceptional Q118 operationally, which included the receipt of a sales license for its Fenwick facility, a graduation from the CSE to the TSX, and an expansion to the EU through a Denmark JV (see our Q218 Top Pick note). Yet, it fell 14% in Q118, underperforming the adjusted average loss of 7% for our tracking group. TRST now trades at 5.5x EV/C2019E EBITDA based on our estimates, a 60% discount to the broad peer group adjusted average at 13.9x, and a 70% discount to its TSX-listed peers at 18.6x. If we use consensus estimates for TRST, it trades at 9.2x EV/C2019E EBITDA, a 34% discount to the broad peer group, and a 50% discount to its TSX-listed peers.”

Stanley thinks CannTrust will generate EBITDA of $33.6-million on revenue of $111.8-million in fiscal 2018. He expects those numbers will improve to EBITDA of $110.9-million on a topline of $285.6-million the following year.