AYRWF - Cannabis price targets lifted by Echelon Capital off new regulatory outlook

Echelon Capital Markets resets price targets across the cannabis sector after factoring in the results of the Georgia Senate election and increased prospect for federal cannabis reform.Analyst Andrew Semple calls it likely that progress will be made on the MORE Act towards the latter half of 2021 or possibly later if COVID-19 requires additional attention from lawmakers. That leads the firm to take the first step in normalizing valuations across the sector."Across our US cannabis coverage models, we previously used a discount rate of 15%, reflecting the high cost of debt and equity capital for these businesses largely attributable to the current status of federal cannabis regulations. We firmly believe the US cannabis industry will eventually move towards a normalized WACC of 4–6% (in the context of current market conditions) seen in more traditional CPG companies if/when full federal legalization occurs. This has significant implications for long-term valuations across the

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Cannabis price targets lifted by Echelon Capital off new regulatory outlook