Medicine Man Technologies Inc (SHWZ)

[Marillionaire]

Roth Capital
Cannabis remains a compelling secular growth story, macro headwinds and legislative delays are a near-term issue: We remain bullish on the cannabis investment opportunity in the U.S., viewing the $65B+ U.S. illicit market as a material market conversion opportunity. We believe as the industry matures, pricing will compress naturally as access improves, bringing new consumers into the legal channels while cultivation scale offsets margin pressure. We still expect the U.S. to reach over ~$100B in sales at maturity and believe these stocks will trade in-line with CPG peers at ~4.0x NTM EV/sales, with MSOS currently trading at a 50% discount at 2.0x. Cannabis legalization on both a state and federal level should accelerate as more U.S. states legalize (19 adult-use), forcing the eventual federal movement to open up U.S. operators to U.S. exchanges uplistings. We believe the best path forward for cannabis reform is an incremental approach, and we are warming up on the signaling political willingness in the positioning for a potential SAFE+ passage.