In the volatile world of U.S. cannabis stocks, retailer Curaleaf Holdings Inc.'s (CURA) shares are worth buying, according to one analyst.

Wakefield, Massachusetts-based Curaleaf raised $400 million, the biggest equity raising in Canada's marijuana industry, when it listed its shares in Toronto on Oct. 29. The company’s higher than expected $4 billion IPO valuation raised some eyebrows, particularly as its business of cultivating and selling weed in the U.S. violates the country’s federal law, although those concerns failed to deter GMP Securities from initiating coverage on the stock with a bullish outlook.

In a research note, reported on by Cantech Letter, analyst Robert Fagan said there’s lots to like about the company’s vertically integrated business model and wide reach. The analyst pointed out that Curaleaf, which grows weed, processes it and then sells it across its 28 own-branded stores spread out across 12 different states, has much more visibility than its peers, unrivaled production facilities and a greater platform to prosper in states where marijuana is expected to be legalized for recreational use, such as Massachusetts, New York and New Jersey. 

“We believe CURA has emerged as the new industry leader amongst public U.S. cannabis operators, with a multi-state retail footprint and production base which is double the size of its peer group average,” said Fagan. “We believe CURA’s industry leading operating platform argues for the highest valuation metrics in the sector.”

The analyst is also excited about the amount of capital that Curaleaf has to spend. In an interview with Cheddar, the company’s CEO Joe Lusardi said $80 million of the $400 million raised from the IPO will be invested in Curaleaf’s current operations. The rest he intends to use to pursue acquisitions.

Fagan estimates that about $200 million will be spent on M&A activity and that this should result in $5 per share upside. Those prospects, together with the anticipated legalization of cannabis in New York and New Jersey, led him to slap a price target of $20 Canadian dollars on the shares, an increase of 133% on their current price of $8.57 Canadian dollars.