February 21, 2024, ST. PETERSBURG, FL – Water Tower Research (www.watertowerresearch.com) has published an Initiation of Coverage Report on LEEF Brands, Inc. (OTC: LEEEF) titled, “One of California's Largest Vertical Contract Manufacturing and Supply Chain Companies”. The report can be accessed here.
LEEF Brands, Inc. is a single-state operator focused on the world’s largest cannabis market. It is a company with deep roots in California cannabis. Upon legalization in California, some companies sprouted up with unknown players and new brands fueled by fancy financing. LEEF is different—it is owned and operated by some of the most proven legacy operators in the industry. From top leadership down, LEEF is built with respect for the past and a passion for cannabis.
LEEF is vertically integrated and added retail with its January 2023 acquisition of The Leaf dispensary in Palm Desert. It also has a land-use permit for a 187-acre cannabis canopy in Santa Barbara County at a location called Salisbury Canyon Ranch. The site is being planted in spring of 2024 and the first harvest will be this fall. In addition to offering in-house brands, LEEF is an incubator and service provider to California’s largest brands.
LEEF has spent six years developing manufacturing processes in the largest and one of the most difficult markets to operate. It has continued to grow internally and built an impressive client base of the top California brands. Part of the company’s strategy is to include these brands in out-of-state expansion, which should help build nationwide brand recognition for its manufacturing business, LEEF Labs.
On a valuation basis, LEEF is cheap relative to most stocks outside of cannabis and its peer group. To evaluate LEEF, we compared it with a basket that includes California companies and other similar-sized single-state operators. Enterprise value to LTM sales estimates is an important perspective. At just 1.18x LTM sales, LEEF is below the 1.39x average for the basket.
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