MEDRELEAF CORP (OTCMKTS:MEDFF) The Newest Billionaire In Cannabis Town

Cannabis!The one word that has been the cause of hype throughout the Canadian Stock Exchange.The CSE has seen companies within this sector continue to go up and up making this seem like a period of significant boom for the industry.No company or group of shareholders know this better than MEDRELEAF CORP (OTCMKTS:MEDFF).The company’s share price has been trending since inception with their price increasing by over 46% since our last review which, for first time readers, can be read here, to close at $13.13. Moreover, with the price finally having gone past the $10 mark, we are now looking at a billion-dollar company going forward, no mean feat for the cannabis player.The price trend described above can be viewed in the chart below: MEDFF Daily ChartWith the legalization of recreational cannabis coming closer for the Canadian market, players within this industry seem to be attaching huge valuations to companies such as MEDFF which have significant grounding and strong future prospects.As such, we will focus this piece on trying to understand how Medreleaf is working out it’s math on matters growth as well as how strong their fundamentals currently are: can they support the growth of the company within Canada or fulfil their plan to venture outside Canada like their competitors have?This piece will therefore be an interesting read for players within the cannabis space. However, before getting into the details, let’s first introduce the company to first time readers.MEDFF: About UsBeing the first and only ICH-GMP and ISO 9001 certified cannabis producer in North America, Medreleaf Corp prides itself in being an R&D company providing a wide range of research initiatives within the cannabis space.The company which was incorporated in Markham, Canada in 2013 has stuck to its initial plan and objectives to ensure cannabis is delivered to health institutions through their investment in medicinal cannabis. Through their many years of data collection, they have built a strong profile of clients that enables them tailor their services to specific clients: the reason behind their near 90% client satisfaction, one of the highest in the industry.Their strategic goal, despite dried cannabis being their main revenue driver, is to get into the beverage and consumer products arms of cannabis as they work towards increasing product lines, diversifying their revenue streams and expanding into international waters.Is Value Addition Taking Place?Initially, MEDFF served Canada from one main facility which is located at Markham.This was a 55,000 square-foot facility with 23,500 square feet under cultivation and limited to 7,000 kilograms of produce per annum.This is a thing of the past now.The company has worked its way up to a new facility at New Bradford: a 210,000 square-foot facility with adequate space to house their R&D labs, industrial kitchen and pharmaceutical manufacturing divisions. Moreover, the facility will boost their production capacity four times over to 28,000 kilograms per annum.This is not even the best part yet.Two days ago, they received an amended license from Health Canada to permit sales of medical cannabis under the Access to Cannabis for Medical Purposes Regulations ("ACMPR") at this facility, boosting their total current licensed production and sales capacity by 80% to 12,600 kilograms per annum.The facility, which is expected to be completed by the summer of 2018, will add onto the portfolio an additional 15,400 kilograms upon reaching 100% capacity. This will not only enable MEDFF grow locally but also expand into international markets, being able to target Brazil, Germany and Australia as presented to their shareholders.Our views on this investment couldn’t have better been articulated than were by their CEO, Neil Closner, who said:

"Just 6 months after receiving our cultivation license at Bradford, we are among the fastest producers to receive a sales license and have completed multiple harvests at best-in-class cultivation yields of 300 grams per square foot. As our industry grows, our proven ability to execute large scale projects while maintaining the highest quality standards further solidifies MedReleaf as a trusted leader amongst licensed producers."

Source:Growth is imminent for MEDFF.The revenue implications of this move are enormous, the value creation for shareholders amazing, the growth potential bewildering and their impact on the industry unmatched. MEDFF is working at maximizing on its production space and this is bound to pay off quite soon for them going forward.Such a futuristic outlook speaks to the strength of their managers’ vision and the value creation premise ingrained in the company’s strategic focus. We therefore are of the opinion that investors are yet to see the highs of MEDFF’s share price and that it is bound to go even higher as we move into the future.FinancialsThe rise of the company to a $1 billion entity must have been driven partly by their financial position and as we will see below, this must be a significant driver.The company has been growing significantly over the past; their revenue base having grown about 109% between March 2016 and 2017 to close the year at $40.3 million. Moreover, a quarter by quarter assessment showed a 19% jump in the same from a similar period last year to close this period at $10.4 million.This came in a period when the company had issued over $75 million in shares through an IPO, the first for a marijuana company, meant to finance their new facility located in New Bradford.The company, in anticipation of higher demand, had been boosting their inventory. Such a significant investment coupled with an increase in sales could only mean one thing, anticipation of higher demand. Their inventory figures rose by over $3 million to end the second quarter at $12.7 million.Finally, MEDFF is cash flow positive.MEDFF made $395,000 in operating cash flows and $73 million in net positive cash flows over the second quarter, adequate amounts to finance both their capital expenditure as well as their working capital.Throughout this piece, we can see that MEDFF merits the high valuation it has gotten from the market. Its growth figures border bewildering, their trajectory inclined upwards and management focused on maintaining the latter and former as stated.With such strong objectives, vision and company fundamentals, MEDFF is bound to keep growing in leaps way beyond our expectations.ConclusionMEDFF represents one of the success stories in the market. The entity has invested heavily in a lucrative sector and is poised for success. With such an outlook and such structured investments, the future can only be greener for them as well as its shareholders.For the full story, check out our complete coverage on MEDFF.We will be updating our subscribers as soon as we know more. For the latest updates on MEDFF, sign up below!Disclosure: We have no position in MEDFF and have not been compensated for this article.