The Globe and Mail reports in its Wednesday edition that Fundamental Research analyst Sid Rajeev began coverage of Delta 9 Cannabis (58 cents) with a "buy" rating. The Globe's David Leeder writes in the Eye On Equities column that Mr. Rajeev calls the company "a leader in Manitoba's recreational cannabis market." Mr. Rajeev has a $1.34 target on the shares, which is 16 cents under the consensus. Seeing its retail operations as its second-largest revenue driver behind its cultivation and wholesale division moving forward, Mr. Rajeev feels Delta 9 has built a 35-per-cent market share in the province due to its five retail stores being situated in favourable locations. Mr. Rajeev says in a note: "Furthermore, their retail cannabis stores, in aggregate, are highly rated. The company operates its stores at a lower than industry average margin, which is part of their overall strategy to be a lower priced player and gain market share. We checked prices on-line to compare whether the company is actually selling its products at a lower price, and found it to be true." The Globe reported on May 21 that Canaccord had boosted its rating on Delta 9 to "speculative buy" from "hold." The shares were then worth 47 cents.
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