Medicine Man Technologies Inc (OTCMKTS:MDCL): The Costco Wholesale Corporation (NASDAQ:COST) Of Cannabis

Medicine Man Technologies Inc (OTCMKTS:MDCL) has enjoyed a boost in its market capitalization, just have the vast majority of entities in the space, across the last couple of months. It's really been a case of struggling more to find a company with ties to cannabis that hasn’t gained than it is to find one that has. The dust is settling a little bit now, however, and we're seeing a pretty much across-the-board correction. Traders are starting to take profits on the table, and it's now time to load up again, but the pickings are slightly slimmer.We're on the lookout for companies that we think have the potential to advance beyond their current hype-driven market capitalizations, and one of the most attractive available is Medicine Man.For those not yet familiar with the company, it's a cannabis retailer, distributor, and consultancy firm based out of Denver. That description doesn’t really do it justice, however. The company kicked off back in 2009 when a couple of brothers got together to execute on a long term plan of creating the Costco Wholesale Corporation (NASDAQ:COST) of cannabis. A few years later, the company was a $17 million dispensary and grow facility, has expanded to become one of the leading names in marijuana in Colorado and out of state. Fast forward a year or two, and the two brothers teamed up with a guy called Brett Roper (co-founder and COO of MDCL) to create a cannabis consulting firm, on top of the Costco type strategy, and Medicine Man Technologies (in its current form) was born.Now, the company is executing on its strategy to become the above mentioned Costco. What do we mean by this? Well, it's looking to set up a sort of brand warehouse model. Companies like Costco, or Procter & Gamble Co (NYSE:PG), acquire brands not with the goal of rebranding them under their own monikers, but with the goal of taking advantage of the already established brand name and retailing as is.That's what Medicine Man Technologies is trying to do here, and that's where we think the forward growth is going to come from. Yes, there's potential in the consulting service (in fact the company has just started touting a service called MAX which aims to improve the efficiency and output of growth facilities) but we think this is going to provide bread and butter revenues while providing an opportunity for networking within the space and generating clients. The best of these clients are then going to be converted into acquisition targets, and Medicine Man is going to bring their respective brands under its wing.We're seeing this strategy unfold as we speak.The company announced back in August that it had agreed to acquire Pono Publications Ltd. and Success Nutrients, Inc. both Colorado corporations, by way of a 7 million shares common issue. Both of these companies give Medicine Man access to retail brands, and when the deal closes (as yet it's subject to DD and the usual closing type process), Medicine Man will have a nice portfolio with which to kick off its Costco aspirations. The two companies' brands are synergistic (they both work together to improve yields) and so will also offer the company something with which to boost its consultancy services, and underpin its MAX cultivation offering.The bottom line here is that the company has a solid background, a strong management team and – and here's the most important thing – an identifiable business model that generates revenues and stands up to DD. Revenues for the first half of 2016 hit $350K, and while cash is low, the acquisitions should improve generation potential without too much capital spend. Of course, these acquisitions are likely to be dilutive, and that's something early holders will have to bear, but there's so much growth potential that any early-stage dilution can probably be quickly offset by value add.We will be updating our subscribers as soon as we know more. For the latest updates on MDCL, sign up below!Disclosure: We have no position in MDCL and have not been compensated for this article.