Following the record Q4 with € 21m sales, Cantourage should be on track to hit another record high quarter with Q1. During the first two months of the year, the company generated € 14.9m sales, already more than 2x last year’s whole Q1 with € 6.2m (regulatory change not until April of last year). Assuming no supply chain disruptions, Cantourage is seen to reach some € 22m sales in Q1 (eNuW).

This bodes well with our 2025 estimates, which imply 67% yoy sales growth to € 86m (so far no FY25 guidance). While we have factored in some weaker months during the summer and a margin of safety, Cantourage currently looks set to be on track to beat our estimates, especially when assuming positive contributions from an increased supplier depth and successful de-bottlenecking efforts at processing sites. With its top-line further improving, scale effects should begin to kick in. Despite ongoing expansion expenses, the group’s EBITDA margin is seen to grow to 10% (eNuW).

Further capacity expansion announced. To be able to cope with the surging demand across its three core markets, Germany, the UK and Poland, as well as geographical expansion, Cantourage decided to further expand its processing capacity. This comes less than 10 months after the last increase to 14t p.a. (€ 100m at € 7.5 per gram), underpinning the unbroken demand and sales potential way beyond € 100m, in our view. While the company has not announced any detail, we would expect the additional capacities to mainly come from third-party processing plants, keeping the business capital light.

Threats from political uncertainties limited. German elections turned out as expected with Christian Democratic Union (CDU) and Social Democratic Party (SPD) forming the new government. While CDU has historically opposed a broader cannabis legalization, SPD was a driving force behind the changes implemented almost one year ago. While we see the potential of re-regulation on the recreational side, i.e. cannabis clubs and growing own plants, a full return to the “old” model seems unlikely as it would come with a high degree of complexity as well as a wave of lawsuits.

Importantly, Cantourage is only active in the medical space, we hence regard the risks to its business model as limited. Further, as the company has been increasing its operational footprint outside of its home turf, potential implications from any regulatory change are rather decreasing going forward.

BUY with an unchanged € 12.50 PT based on DCF.