BioTuesdays

Cantor starts Fire & Flower at OW; PT $1.30 (Canadian)

Fire & Flower Holdings

Cantor Fitzgerald launched coverage of Fire & Flower Holdings (TSX:FAF) with an “overweight” rating and price target of $1.30 (Canadian). The stock closed at 67 cents on Nov. 23.

“Canada’s cannabis retailers are undervalued, in our view, industry challenges notwithstanding,” writes analyst Pablo Zuanic. 

“We prefer Fire & Flower over High Tide (TSX-V, NASDAQ:HITI), and would make use of the stock drop in the last month – Fire & Flower down 19%, High Tide up 8% –  following High Tide announcing a shift to a discount model,” Mr. Zuanic said. 

“We are more comfortable with Fire & Flower’s holistic strategy, tech upside, partnership with Alimentation Couche-Tard, and upcoming NASDAQ listing,” expected in early 2022, he added. 

Mr. Zuanic said in the case of Fire & Flower –  a “technology-powered cannabis retailer,” according to management –  its suite of “technology solutions could potentially rival any of the other major cannabis tech plays out there.”

Convenience store company, Alimentation Couche-Tard, currently owns about 22% of Fire & Flower’s stock and with warrants could take its stake up to 50.1%. New stores within Couche-Tard’s Circle-K stores will “further expand the Fire & Flower footprint in a strategic and asset-light basis in Canada first, and elsewhere when legal,” Mr. Zuanic said.

Sign up for the BioTuesdays weekly newsletter

Get the latest news on the healthcare industry’s corporate and clinical developments, executive moves, and market updates. Every Tuesday, in your inbox.