Greenlane Inks Deal to Buy DaVinci; Shares Drop

Greenlane Holdings, Inc. (GNLN), a global house of brands, has inked a deal to snap up DaVinci, a developer and manufacturer of premium portable vaporizers. The financial terms of the deal have been kept under wraps.

Following the news, shares of the provider of premium cannabis accessories, child-resistant packaging and specialty vaporization products declined 1.3% to close at $2.23 on Tuesday.

The acquisition, which is subject to customary closing conditions, is likely to close in the fourth quarter of 2021. Greenlane expects the acquisition to be immediately accretive to its revenue and earnings upon completion.

Markedly, since the launch of DaVinci’s award-winning IQ vaporizer in 2016, its product line has grown significantly. Notably, the company’s new innovative models include the MIQRO, the world’s smallest premium loose-leaf vaporizer, IQ2, the world’s first on-device dosage control, and the IQC, equipped with a patented ShareSafe mouthpiece created from an FDA-approved antimicrobial polymer, Greenlane said.

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The CEO of Greenlane, Nick Kovacevich, said, “DaVinci leads the way in innovative portable vaporizers and we are thrilled to bring them into our owned brand portfolio. This acquisition perfectly illustrates our mission of elevating all elements of the consumption experience, and we look forward to building on our recent success of acquiring strategic and accretive brands.” (See Greenlane stock charts on TipRanks)

“As we continue to execute on our robust pipeline of acquisition targets, we aim to ensure our customers have a best-in-class product selection, while driving profitability and shareholder value by increasing our higher-margin owned brand offerings,” Kovacevich added.

Recently, Jefferies analyst Owen Bennett initiated coverage of Greenlane with a Buy rating and a price target of $6.30 (182.51% upside potential).

In a note to investors, Bennett said that for cannabis operators’ business, Greenlane provides a number of additional products and services, including vape hardware, packaging, and extraction gases, and therefore “plays a critical role in the cannabis ecosystem”.

The analyst expects Greenlane to record 38% growth in FY23 sales in “a realistic upside scenario, which includes expansion into hemp CBD”.

Consensus among analysts is a Strong Buy based on 3 unanimous Buys. The average Greenlane price target of $5.77 implies 158.74% upside potential from current levels.

TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on Greenlane, with 2.3% of investors maintaining portfolios on TipRanks increasing their exposure to GNLN stock over the past 30 days.