MedReleaf Corp. (TSE:$LEAF), which is a licensed producer of marijuana-based pharmaceutical products, will begin trading following its Initial Public Offering (IPO) on Wednesday, June 7, 2017. After trading commences, MedReleaf is predicted to become Canada’s second-largest publicly traded marijuana company, with a market capitalization of C$859. This means that MedReleaf will only be trailing behind Canopy Growth Corporation (TSX:$WEED), which is, as of right now, Canada’s biggest marijuana stock by market capitalization.
MedReleaf’s initial public offering and secondary offering will total 10.6 million shares at C$9.50 per share for gross proceeds of C$100.7 million. It’s important to note that $80.7 million of which will come from MedReleaf’s treasury while another C$20 million will come from current shareholders. According to representatives at MedReleaf, the company plans to use $40 million to build its Bradford, Ontario institution, $15 million will be used to extend its current institution in Markham, Ontario, which, as of right now, is able to produce 7,000 kilograms of marijuana each year. Plus, MedReleaf plans on using $2 million to support clinical research and the development of products.
Noteworthy Facts.
For a period of nine months ending on December 31, 2016, MedReleaf documented $30.0 million in revenue. This was a 141% increase from 2015. Adjusted EBITDA, on the other hand, grew 358% to $12.2 million during the same period.
Based on MedReleaf’s beliefs, their competitive advantage stems from its patient-centric approach, quality assurance, and through the production of premium marijuana. With a seed bank of over 200 different kinds of cannabis and over 15,000 seeds from around the world, MedReleaf takes pride in the fact that they plan to breed new types of marijuana plants in an attempt to meet specific patients’ needs.
In early 2017, MedReleaf reported that they would be doing same-day delivery for patients living in the Greater Toronto area. If patients order through the phone or online before 1 pm, they will receive their medication on the same day for a fee of $15.
MedReleaf has won a number of Lift Cannabis awards, such as 1st Place for Top Sativa (Luminarium); 1st Place for Top High-CBD (Avidekel); and 3rd place for Top Hybrid (Midnight). MedReleaf stated that, in 2015 and 2016, their quarterly market share was between 16% and 20% of total reported Canadian volume.
It’s important to note that once MedReleaf stocks start trading on Wednesday, investors who are looking to start making marijuana investments will flood to MedReleaf. That said, based on recent history, the share price could slowly decrease during the coming months. One example of this would be Canopy Growth. On February 13, 2017, shares of Canopy Growth reached a high of $13 and since then, shares have dropped 48% to its current price of $6.82.
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