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March 4, 2021, 8:02 a.m. EST

Canadian premium cannabis company Rubicon Organics initiated as 'strong buy' by Raymond James

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By Ciara Linnane

Raymond James initiated coverage of Canadian cannabis company Rubicon Organics Inc. /zigman2/quotes/221315289/delayed CA:ROMJ -4.36% /zigman2/quotes/207304811/delayed ROMJF -3.25% with a strong buy rating on Thursday, and said the stock is its "very best micro cap cannabis idea." Analyst Rahul Sarugaser assigned the stock a C$6 price target, that's almost double its current level. Rubicon focuses exclusively on super-premium cannabis and is one of only six licensed producers to offer certified organic cannabis products in Canada, the analyst wrote in a note to clients. "Similar to premium liquor brands affiliated with rarity and prestige-Johnny Walker Blue Label is a favorite example-ROMJ is building distinguished premium brands built on a portfolio of intensely high-quality cannabis products designed to generate the sector's highest gross margins: >50%," said the analyst. Rubicon has its roots in Whistler Medical Marijuana Corp., Canada's first organic-certified LP, which was sold to Aurora Cannabis Corp. /zigman2/quotes/210559470/composite ACB -5.62% /zigman2/quotes/203734337/delayed CA:ACB -6.11% . Whistler was co-founded by Rubicon's current Chief Executive Jesse McConnell. "ROMJ's expanding team comprises a full complement of seasoned CPG industry executives, leveraging experience from iconic companies and brands such as Coca-Cola, Pepsi, Diageo, L'Oreal, and Nestle," said the note. Raymond James is expecting the company to capture 25% of the premium/craft cannabis market, equal to about 20% of the total market, based on comparable industries such as beer and liquor. That suggests revenue of $26.5 million in 2021 to $52.5 million in 2022. The U.S.-listed stock was not active premarket, but has gained 69% in the last 12 months, while the Cannabis ETF /zigman2/quotes/213173823/composite THCX -4.80% has gained 98% and the S&P) 500 /zigman2/quotes/210599714/realtime SPX -1.04% has gained 22%.

/zigman2/quotes/221315289/delayed
CA : Canada: TSX Venture
$ 2.85
-0.13 -4.36%
Volume: 35,214
May 10, 2021 3:49p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$165.31 million
Rev. per Employee
N/A
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/zigman2/quotes/207304811/delayed
US : U.S.: OTC
$ 2.36
-0.08 -3.25%
Volume: 13,451
May 10, 2021 3:56p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$136.02 million
Rev. per Employee
N/A
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/zigman2/quotes/210559470/composite
US : U.S.: NYSE
$ 8.40
-0.50 -5.62%
Volume: 4.14M
May 10, 2021 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$1.76 billion
Rev. per Employee
$76,070
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/zigman2/quotes/203734337/delayed
CA : Canada: Toronto
$ 10.15
-0.66 -6.11%
Volume: 2.01M
May 10, 2021 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$2.14 billion
Rev. per Employee
$102,126
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/zigman2/quotes/213173823/composite
US : U.S.: NYSE Arca
$ 16.85
-0.85 -4.80%
Volume: 113,565
May 10, 2021 4:00p
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/zigman2/quotes/210599714/realtime
US : S&P US
4,188.43
-44.17 -1.04%
Volume: 2.29B
May 10, 2021 4:20p
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