Shares of Aleafia Health Inc (TSE:ALEF) have gotten hammered ever since the stock was listed on the Toronto Stock Exchange. Now, after the recent selloff, we here at Insider Financial view ALEF as a discount entry opportunity. As we will discuss further, now that Aleafia has completed its merger with Emblem Corp, the combined company is a first-class cannabis player with huge potential. There’s a lot to like with the new Aleafia Health.
First up, a little background info for those that are not familiar with ALEF.
Aleafia Health is a leading, vertically integrated cannabis health and wellness company with four primary business units: Cannabis Cultivation & Products, Health & Wellness Clinics, Cannabis Education, and Consumer Experience with e-commerce, retail distribution and provincial supply.
Aleafia Health owns three major cannabis product & cultivation facilities where it produces a diverse portfolio of commercially proven, high-margin derivative products including oils, capsules, and sprays. Aleafia Health operates the largest national network of medical cannabis clinics and education centers staffed by MDs, nurse practitioners, and educators.
Aleafia Health maintains a medical cannabis dataset with over 10 million data points to inform proprietary illness specific product development and treatment best practices.
The combination of Aleafia and Emblem created a cannabis giant. Key highlights include:
- The leading Canadian medical cannabis clinic and education center network with 60,000 patients seen to date
- A high-value, highly differentiated product portfolio of oils, capsules, and sprays
- Scaled production capacity and leading supply with three dedicated cultivation and product innovation facilities and the industry’s largest LP to LP cannabis supply agreement
- A national and global distribution platform with provincial supply agreements, retail partnerships, and a global expansion
- Improved capital markets profile and liquidity, including up-listing to the TSX
- A combined entity with a robust cash position
CEO Geoffrey Benic said:
“The acquisition of Emblem rapidly accelerates the execution of Aleafia Health’s strategy and positioning as a vertically integrated, diversified cannabis company with an integrated, highly differentiated consumer ecosystem. Emblem’s product leadership in the medical and adult-use sectors and highly coveted supply agreements will perfectly complement our cannabis production and clinic operations. This is a transformative transaction that positions Aleafia Health as a global cannabis leader.”
Aleafia just hired Keith White as the Company’s new President of Clinic Operations. His job will be to integrate Aleafia Health’s wholly owned Canabo Medical Clinics and Emblem’s GrowWise Health. White’s hiring will accelerate Aleafia Health’s global initiative to build an integrated, scalable cannabis consumer experience, leveraging the Company’s in-house, executive leadership background at multi-billion-dollar eCommerce and IT companies. Over the next three months, the Company will launch unique, highly differentiated cannabis education and e-commerce platforms, utilizing its proprietary 10-million-point medical cannabis dataset, and Emblem’s robust product portfolio of high-margin capsules, oils and sprays. Aleafia Health CEO Geoffrey Benic said:
“Aleafia Health will enable patients to navigate seamlessly through cannabis education, illness-specific questionnaires, medical cannabis script product purchasing, order subscription management and treatment/titration monitoring within an integrated, globally scalable platform. White will, in conjunction with our marketing and technology team, oversee Aleafia Health applying the best practices of global e-commerce and healthcare companies for the benefit of our patients and shareholders.”
Currently trading with a market cap of US$427 million, ALEF is one of the most undervalued opportunities among cannabis stocks right now. It’s very hard to find a compelling cannabis play trading under US$1 billion in total market cap. ALEF is one of those prime opportunities and its merger with Emblem is a game changer for the company. ALEF is a discount entry opportunity for savvy investors right now.
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Disclosure: We have no position in ALEF and have not been compensated for this article.