As Canopy Growth (Canopy Growth Corp. Stock Quote, Chart, News: TSX:WEED, NYSE:CGC) prepares for the launch of recreational adult use cannabis, the company reported its quarterly financials on Wednesday.

Analyst Jason Zandberg of PI Financial says investors will have to wait one more quarter before the licensed producer reports any sales attached to Canada’s rec market. In an update to clients, Zandberg reiterated his “Buy” rating and $45.00 target for Canopy.

Smiths Falls, Ontario’s Canopy Growth reported a net loss attributable to shareholders of $61.5 million, compared to a $12 million loss over Q4/FY17. The company’s revenue of $22.8 million was up 56 per cent from the same period last year, while it reported an EBITDA loss of $22.9 million.

“With the recent launch of our Spectrum Softgels, strong sales in Canada and Germany and the expansion of our global footprint into Africa and further into Europe and Australia, we continue to drive our global leadership position in medical cannabis forward,” said Bruce Linton, CEO, in a press release.

“For many months, provincial and territorial agencies have thoroughly evaluated our business, including our product inventory, operational capabilities, IT systems as well as our cannabis retail and education programs. Being the only company selected by all provinces and territories with announced supply and retail partners, speaks to our readiness for the adult recreational cannabis market that is expected to open in less than three months,” he said.

Zandberg highlighted the fact that exported sales were $2.3 million, up from just $1.0 million during the previous quarter and evidence that Canopy’s international markets are expanding quickly.

But the main news is still to come, says Zandberg, who maintains that Canopy’s valuation —28x his FY21 EV/EBITDA estimate— is reflective of the company’s “significant market potential” in Canada and internationally.

“Management indicated that Q2 FY19 (ending September 30) will report significant sales as Provinces stock their shelves for the October 17 launch of recreational sales in Canada,” says Zandberg. “We are assuming that WEED will recognize sales of ~17,600kg of cannabis at an average price of $5.45/gram. The re-order rate will depend on initial sales volume but we expect the first year of recreational sales to be slow before ramping up in the following years. The initial weakness depends on the market in Ontario who have only committed to 40 retail stores in a Province that represents 37 per cent of the Canadian population.”