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WeedMD shares advance as Eight Capital repeats 'buy'

The target price is lifted by the broker slightly to C$2.50 from C$2.25 previously.
WeedMD gets a 'buy' repeated by broker Eight Capital

WeedMD Inc (CVE:WMD) has had its 'buy' rating repeated by broker Eight Capital after last week's bought deal financing, which brought in gross proceeds of C$15mln.

The 15,000 convertible debentures carry an interest rate of 8% and have a maturity date of 24 months from closing.

"The financing capitalizes the company for near term production capacity expansion," says the broker's Daniel Pearlstein.

"WeedMD has plans to expand to around 120,000 sq ft and 15,000 kg per year of capacity, pending proper Health Canada approvals," he says.

"WeedMD currently operates a 25,000 sq ft facility located on a four-acre property with a licensed production capacity of 1,200 kg per year and a built capacity of 1,300 kg per year.

"The previous Imperial Tobacco facility has access to sufficient clean water and power for the expansion. The lease for the facility is for 5 years, with an option to buy for $1.5MM, and options to renew for three extra 5-year terms.

"The company has negotiated purchase options with neighbouring properties that would see total property size double to eight acres if exercised."

The target price is lifted slightly to C$2.50 from C$2.25 previously.

WeedMD shares are currently at C$1.17 each - up 3.54%.

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