Aleafia Health Moves Another Step Closer

In this market news, Aleafia Health Inc. (TSX:ALEF), (OTC:ALEAF) one of the Canadian marijuana stocks, said Phase I of its Niagara Greenhouse facility is done

SmallCapPower | January 9, 2019: Aleafia Health Inc. (TSX:ALEF) (OTC:ALEAF), one of the Canadian cannabis stocks, announced Monday the completion of Phase I construction and retrofitting of its 60,000 sq.ft. Niagara Greenhouse facility located in Grimsby, Ontario. Phase II, representing 160,000 sq.ft. of the Niagara facility, is expected to be completed by late Q1 or early Q2 2019.

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Its Niagara Greenhouse facility is constructed using the Dutch Hybrid design, located strategically to take advantage of Niagara Region micro-climate to significantly reduce electricity expenses and accelerate the seed-to-harvest period. The facility would increase the Company’s production capacity and allow it to explore multiple distribution avenues, including its 15,000 kg 2019 supply agreement with CannTrust Holdings Inc. (TSX:TRST).

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Aleafia Health Chairman Julian Fantino said, “Bringing the Niagara Greenhouse to a plant-ready state on time and on budget speaks to our team’s executional capabilities. Realizing our vision means securing the highest quality cannabis for our partners and growing base of medical patients.”

Aleafia completed the $9.6 million acquisition of the greenhouse in July 2018. The facility has a moving container bench system, which should lead to low-cost per gram yields and a perpetual, year-round harvest. The Company has made up-front capital investments in modern cannabis cultivation design and engineering. These investments enable production of standardized, pharmaceutical-grade cannabis.

Aleafia Health has submitted the facility’s Evidence Package to Health Canada, marking the final stage in the Cultivation License application process. Pending Health Canada approval, the first Niagara crop is expected to begin in the next 60 days. Aleafia CEO Geoffrey Benic stated, “This milestone and projected growth in Aleafia’s production capacity, represents a game-changer for Aleafia. With an emerging national retail network via Serruya Private Equity, our 15,000 kg supply agreement with CannTrust and the pending acquisition of Emblem, the demand for Aleafia’s high-quality cannabis has never been stronger.”

Additionally, Aleafia Health would leverage Emblem Corp. production capabilities once the terms and conditions of the acquisition are met by both parties. It is expected that capsules, oils and oral sprays produced with Aleafia cannabis will be ultimately processed, extracted, labelled and shipped from the Paris, Ontario Product Innovation Center, for use by medical cannabis patients including Aleafia’s more 50,000 patients.

Aleafia Health stock trades at a market capitalization of C$216.2 million with a price-to-book multiple of 2.8x.

Disclosure: Neither the author nor his family own shares in the company mentioned above.

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