MedReleaf Stock Gets a Lift From Second Facility Sales License

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Shares of MedReleaf Corp. (TSE:LEAF) have climbed more than 23% over the past week and currently trade at a comparatively low Price to Sales ratio of 33.95x

SmallCapPower | November 9, 2017: MedReleaf Corp. (TSX:LEAF) shares surged 16% on Monday, gaining more than 23% over the past week to its present price of $16.10, after receiving a sales license at its second facility in Bradford, Ontario. Canada’s first and only ISO 9001 and ICH-GMP certified producer of medical cannabis has received the sales license within six months after getting the cultivation license in April 2017. This development will increase the Company’s total current licensed production and sales capacity by 80% to ~ 12,600 kg per year. Once construction of the Bradford facility is fully completed in the summer of 2018, total licensed production and sales capacity from MedReleaf’s two facilities in Markham and Bradford will be 35,000 kg per year.

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This latest license from Health Canada follows several other recent milestones at the Bradford facility. On October 11, 2017, MedReleaf received its amended license for the use of its Mother Room and Clone Room to support the growing capacity at the Bradford facility. On October 20, 2017, the Company received an amended license for the use of two additional cultivation rooms, effectively doubling annual production capacity to an estimated 5,600 kg at the Bradford facility.

MedReleaf cultivates and produces its cannabis-based pharmaceutical products for direct sale to its patients across Canada. The Company interacts with its patients via its e-commerce platform as well as by phone and email correspondence directed to its patient-care team. Currently, MedReleaf sells dried cannabis, cannabis oils and cannabis oil capsules to its patients from its Markham facility. So, this addition of the Bradford facility will drive revenue going forward.

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Earlier this year, MedReleaf announced that it would provide same-day delivery to patients in the Greater Toronto Area. Patients who order by phone or online before 1pm will receive their medication the same day for a $15 flat fee.

MedReleaf has won Lift Cannabis awards, which included 1st Place for Top Sativa (Luminarium); 1st Place for Top High-CBD (Avidekel); and 3rd Place for Top Hybrid (Midnight). During 2015 and 2016, MedReleaf said it had a quarterly market share of between 16% and 20% of total reported Canadian volume.

Since its IPO in June 2017, MedReleaf‘s shares have surged over 110%, despite the fact that its stock price fell 22% on its first day of trading. MedReleaf currently trades at Price to Sales ratio of 33.95x, which is comparatively low as compared with other players trading at 50x.

Disclosure: Neither the author nor any of the principals at SmallCapPower, or their family members, own shares in the company mentioned above.

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