As Ohio begins recreational cannabis sales on August 6, Pablo Zuanic, senior analyst at Zuanic & Associates has initiated coverage of Vext Science (OTC:VEXTF) with an Overweight rating, highlighting the company's significant growth potential.
Zuanic calculates that Vext has the most EBITDA torque among the 12 public multi-state operators (MSOs) in Ohio, projecting Vext's EBITDA could grow six-fold by CY26, taking CY23 as the base year.
Ohio Market Projections: $2.36B In 2026
- The Ohio market is expected to grow substantially with the start of recreational sales, potentially expanding 3-4 times the current medical market size.
- Zuanic projects the Ohio market to reach a $1.85 billion annual run rate by the end of 2025 and $2.36 billion by the end of 2026.
- This growth trajectory is based on conservative estimates, with per capita spending expected to reach $150 by the end of the first year of recreational sales and $200 by 4Q26.
Valuation And Market Performance
Despite trading mostly in line with the MSO average, Vext's stock valuation does not yet reflect the expected EBITDA ramp. "The stock valuation does not reflect the EBITDA ramp," notes Zuanic. The report underscores that Vext's current valuation is compelling, particularly when considering the projected upside.
Zuanic's analysis shows that Vext could experience a 471% increase in value creation, compared to other MSOs like Acreage (OTCQX:ACRHF) at 275%, Cannabist (CSE:CCHW) at 185%, and Ascend (OTC:AAWH) at 62%.
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Strategic Operations And Expansion
Vext operates a 25K sq ft cultivation facility and two dispensaries in Ohio, with plans to acquire two more dispensaries by the end of 2024. The company's aggressive expansion in Ohio positions it well to capitalize on the anticipated market growth.
Zuanic points out, "Vext has garnered pretty good value in Ohio, being agile in acquiring licenses and independent operators."
In this analysis, Pablo Zuanic extrapolates total sales upside based on store percentage share, acknowledging that this doesn't account for location or execution. He notes that not all retailers own cultivation facilities, which could affect wholesale market share.
Additionally, MSOs like Ascend (OTC:AAWH), Cresco (OTC:CRLBF), Green Thumb (OTCQX:GTBIF), and MariMed (OTCQB:MRMD) consistently outperform in other states and might do the same in Ohio, with potential expansions through M&A deals.
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Photo: AI-generated image.