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Cannabis Firm to Enter Colorado Market Via Acquisition

October 28, 2021 (Investorideas.com Newswire) The target company “brings numerous positives to Stem Holdings dba Driven By Stem,” noted a Noble Capital markets report.

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In an Oct. 27 research note, Noble Capital Markets analyst Joe Gomes
reported that Stem Holdings Inc. dba Driven By Stem (STEM:CSE; STMH:OTCQX) agreed to acquire Colorado Harvest Co., a cannabis retailer of edibles, concentrates, and naturally grown flower. The deal terms are still being negotiated.

Gomes described Colorado Harvest and how it will enhance Stem Holdings.

Colorado Harvest operates two dispensaries, one in Denver, the other in Aurora, as well as a pair of cultivation facilities producing 200-plus pounds of cannabis monthly. The company also has two delivery permits.

This year, Colorado Harvest is expected to generate $13 million ($13M) of revenue, for $5.07M of gross profit.

Given Colorado Harvest’s array of verticals, the acquisition will benefit Stem Holdings in various ways. For one, Stem will gain access to the second largest legal cannabis market in the U.S.: Colorado. There, total 2021 cannabis sales are estimated to be $2.5 billion ($2.5B), up from $2.2B last year.

Two is access to a fragmented market, 22% of which is held by the top players. As the market consolidates, it will offer “significant growth opportunity.”

Three, because home delivery is new to the Colorado market, Stem will be able to implement its Budee home delivery service in a new market. Further, the market is concentrated as half of all sales in Colorado occur in Denver and its three surrounding counties.

Four, Gomes noted, “Colorado Harvest also adds additional proprietary, award-winning strains and products to Driven by Stem’s quiver.”

Noble has an Outperform rating and $2 per share target price on Stem Holdings, the current share price of which is about $0.26 at the time of publication.

Disclosures:

1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Stem Holdings Inc. dba Driven By Stem. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with Stem Holdings Inc. dba Driven By Stem. Please click here for more information.

3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.

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5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Stem Holdings Inc. dba Driven By Stem, a company mentioned in this article.

6) This article does not constitute medical advice. Officers, employees and contributors to Streetwise Reports are not licensed medical professionals. Readers should always contact their healthcare professionals for medical advice

Disclosures for Noble, Stem, Oct. 27, 2021

All statements or opinions contained herein that include the words “we”, “us”, or “our” are solely the responsibility of Noble Capital Markets, Inc. (“Noble”) and do not necessarily reflect statements or opinions expressed by any person or party affiliated with the company mentioned in this report. Any opinions expressed herein are subject to change without notice. All information provided herein is based on public and non-public information believed to be accurate and reliable, but is not necessarily complete and cannot be guaranteed. No judgment is hereby expressed or should be implied as to the suitability of any security described herein for any specific investor or any specific investment portfolio. The decision to undertake any investment regarding the security mentioned herein should be made by each reader of this publication based on its own appraisal of the implications and risks of such decision.

This publication is intended for information purposes only and shall not constitute an offer to buy/sell or the solicitation of an offer to buy/sell any security mentioned in this report, nor shall there be any sale of the security herein in any state or domicile in which said offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or domicile. This publication and all information, comments, statements or opinions contained or expressed herein are applicable only as of the date of this publication and subject to change without prior notice. Past performance is not indicative of future results.

Noble accepts no liability for loss arising from the use of the material in this report, except that this exclusion of liability does not apply to the extent that such liability arises under specific statutes or regulations applicable to Noble. This report is not to be relied upon as a substitute for the exercising of independent judgement. Noble may have published, and may in the future publish, other research reports that are inconsistent with, and reach different conclusions from, the information provided in this report. Noble is under no obligation to bring to the attention of any recipient of this report, any past or future reports. Investors should only consider this report as single factor in making an investment decision.

The following disclosures relate to relationships between Noble and the company (the “Company”) covered by the Noble Research Division and referred to in this research report.

The Company in this report is a participant in the Company Sponsored Research Program (“CSRP”); Noble receives compensation from the Company for such participation. No part of the CSRP compensation was, is, or will be directly or indirectly related to any specific recommendations or views expressed by the analyst in this research report.

Noble has provided capital markets advisory services in the last 12 months. Noble has received compensation for non-investment banking services in the past 12 months. The Company has attended Noble investor conference(s) in the last 12 months.

Noble intends to seek compensation for investment banking services and non-investment banking services (securities and non-securities related) within the next 3 months.

Noble is not a market maker in the Company.

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