Shares of Medicine Man Technologies Inc (OTCMKTS:MDCL) have been consolidating around the $2 mark for about a month now. The company has put out some interesting developments since our last coverage back in January. As we take another look at the stock once again, we find that there’s a lot to like with Medicine Man and that new highs could be in the cards very shortly.
First up, a little background info for those that are not familiar with MDCL. Medicine Man Technologies is a fully integrated operator in the cannabis industry, offering consulting, retail pharma-grade products, and turnkey solutions for cannabis cultivators for over a decade. Medicine Man Technologies is leveraging its expertise and intellectual property to vertically integrate retail, cultivation, formulation, and distribution operations. The Company’s client portfolio includes active and past clients in 18 states and seven countries. The Company currently has or has had active clients in California, Iowa, Oregon, Colorado, Nevada, Illinois, Michigan, Arkansas, Pennsylvania, Florida, Ohio, Maryland, New York, Oklahoma, Massachusetts, Puerto Rico, Canada, Australia, Germany, and South Africa.
Medicine Man Technologies is in the process of acquiring MedPharm Holdings, LLC. At the end of January, MedPharm Holdings announced the successful formulation and development of micro-emulsified, cannabis-infused, dissolvable thin strips “Melts,” powered with their proprietary Lipophilic Enhanced Absorption Formulation (LEAF) technology. The oral strip is unique in that it microencapsulates cannabinoids in a water-soluble delivery system.
“Melts” is a dissolvable oral thin strip (similar to Listerine Pocketpaks) that allows for a consistent and exact cannabis dose, which isn’t available through smoking or vaping cannabis directly. When combined with micro-emulsification of cannabinoids into a water-soluble substrate, “Melts” also avoids some issues created by oral cannabis dosing, such as delayed onset, which can lead to users taking too much cannabis. “Melts” will allow consumers to more easily self-regulate their dose. “Melts” will be available as both a microdose and a higher THC dose, with varying ratios of THC, CBD and terpene profiles for consumer needs.
4th Colorado Location
MDCL opened its newest retail dispensary in Longmont, Colorado, on February 20. The store opening comes after Medicine Man’s January announcement of entering a binding agreement that is expected to lead to the near-term acquisition of Medicine Man by Medicine Man Technologies, a leading consulting, intellectual property licensing and products company in the cannabis industry.
Medicine Man is Colorado’s leading cannabis retailer with four locations across the state in Aurora, Denver, Longmont, and Thornton. Medicine Man offers a large variety of cannabis, edibles, concentrates, and CBD products for both medical and recreational patients. Established in 2009, Medicine Man is the city’s largest individual marijuana dispensary, located just minutes from Denver International Airport.
Closing of Acquisitions
The acquisition of Medicine Man Denver and MedPharm Holdings, LLC, expected to close in 2019, transforms the Company from providing services and products in the cannabis industry to a major, vertically integrated cannabis brand servicing domestic and foreign markets. The post-acquisition company will have strong competitive advantages as the first cannabis operator with a state-issued cannabis research license and a pending application for a federal research bulk manufacturer license to provide cannabis and cannabis dosage forms to researchers around the country. The MedPharm transaction is expected to close by the end of the first quarter. Andy Williams, Co-Founder, Chairman and CEO of Medicine Man Technologies said:
“Our shareholder letter addresses our two valuable pending acquisitions of MedPharm Holdings and Medicine Man Denver that will bring Medicine Man Technologies to an annual run rate of over $40 million. These acquisitions will greatly benefit from our existing relationships in 18 states and seven countries. They will also position us to drive revenue through traditional partnerships only reserved for pharmaceutical companies as the only cannabis company with a federal research license. The shareholder letter also details our company processes and resources that will position Medicine Man Technologies to provide turnkey solutions and supplies for cannabis cultivators.”
Currently trading with a market cap of $53 million, MDCL is an exciting name among marijuana stocks. Once the acquisitions close, we believe that’s the catalyst to take the stock to new highs. Considering the company’s current market cap and its expected $40 million run rate, it’s easy to see that MDCL is an undervalued play among pot stocks.
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Disclosure: We have no position in MDCL and have not been compensated for this article.
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