Record revenues representing a 168% year-over-year increase explain why Medicine Man Technologies Inc. (OTCMKTS:MDCL) shares are flying high. The confirmation that the acquisition of MedPharm Holdings and Medicine Man Denver will take the company’s annual run rate to over $40 million is another development that continues to ramp up the stock’s market sentiments.
Medicine Man Technologies Price Analysis
Just as was the case in the first quarter, Medicine Man Technologies has continued to edge higher as investors sentiments continue to inch higher. The stock is already up by more than 150% for the year after succumbing to bearish pressure in 2018.
A spike to two-year highs has reaffirmed the stock’s breakout credentials as it continues to outperform the overall cannabis market. A minor correction from the $4 a share handle to the $3 a share level appears to have paved the way for the stock to edge higher as a pullback play.
Standing in the way of the stock registering a new higher high is the $4 a share resistance level. Failure to breach the resistance level could see the stock resorting to trading sideways in a $3 to $4 trading range.
Conversely, a sell-off followed by a close below the $3 a share mark could result in the acceleration of the sell-off back to the $2.30 support level.
What Does Medicine Man Technologies Do?
Medicine Man Technologies casts itself as an integrated operator in the cannabis sector. The company offers consulting cultivation supplies and equipment to licensed cannabis producers, processors, and retailers.
Why is Medicine Man Technologies Surging?
Medicine Man Technologies is flying high after delivering an impressive financial export for FY2018. Revenues for the 12-month ended December 31, 2018, increased 168% to $3.5 million. The company attributes the increase to an increase in new clients as well as expansion into new states that adopted cannabis legalization initiatives.
Gross profit for the year increased 208% to $6.9 million from $2.2 million reported a year earlier. Net income, on the other hand, skyrocketed to $2.2 million compared to a net loss of $5.2 million reported in 2017.
According to Chief Executive Officer, Andy Williams, 2019 is a pivotal year as they work on the next phase of growth.
“Our focus now is to leverage the entire management and leadership experience as we continue to further develop our growth strategies with the two pending acquisitions of Medicine Man Denver and MedPharm Holdings, LLC, expected to close in late 2019 or Q1 2020, in which post-acquisition is expected to generate a minimum of a $40+ million-a-year run rate,” explained Mr. Williams.
MedPharm and Medicine Man Denver Acquisition
The MedPharm acquisition is a big achievement as the company comes with a cannabis research license that will allow Medicine Man Technologies to come up with pharmaceutical grade products. In addition, the company’s two licensees MX LLC and MedPharm Iowa should help strengthen Medicine Man Technologies’ brand.
With the acquisition of Medicine Man Denver, Medicine Man Technologies will gain access to 4 Colorado retail locations as well as a 40,000 sq. ft. cultivation operation. The acquisition is poised to add $25 million of annual revenue.
Medicine Man Denver acquisition would expose the parent company to industry-best harvesting operation and expertise that currently stands at 650 grams per square foot.
“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,” explained Mr. Williams.
Separately Medicine Man Technologies has confirmed that one of its investors, Tigran Muradyan has joined the management team as a director of products. Under the role, the new director will work with the executive management team on the development and execution of an array of products and services in the effort of furthering the company’s revenue growth.
Muradyan has since invested $1 million into the company, on the purchase of 600,000 shares previously owned by Joshua Haupt.
What Next For Medicine Man Technologies
Medicine Man Technologies remains well positioned to continue edging higher as investors react to a string of positive developments that underscore underlying growth. After a minor correction, the stock is likely to power through the immediate resistance level, on its way to registering higher highs.
For early movers, the stock should be an exciting pull back play once it powers through the $4 resistance level.
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Disclosure: We have no position in MDCL and have not been compensated for this article.
Forget APHA and ACB, Buy GTBIF and TCNNF
There are a lot of misconceptions going on when it comes to US legalization. Many investors are buying Aphria (APHA) and Aurora Cannabis (ACB) hoping to bank on what’s happening in the US. However, they are Canadian Licensed Producers and have no business in the US. Investors are buying them because they trade on the major exchanges, but that is the wrong move. The correct move is to buy the US multi-state operators like Green Thumb Industries (GTBIF) and Trulieve Cannabis (TCNNF).
On Election Day voters in New Jersey, Arizona, Montana and South Dakota voted to legalize recreational marijuana. South Dakota and Mississippi voters also approved measures to legalize medical marijuana.
There’s also the prospect of a more pot-friendly White House with President-elect Joe Biden. Vice Presidential Candidate Kamala Harris said at the debate a Biden administration would decriminalize marijuana at a federal level and expunge criminal records of people with marijuana-related offenses.
Green Thumb Industries Inc. (“Green Thumb”), a national cannabis consumer packaged goods company and retailer, promotes well-being through the power of cannabis while giving back to the communities in which it serves.
Green Thumb manufactures and distributes a portfolio of branded cannabis products including Beboe, Dogwalkers, Dr. Solomon’s, incredibles, Rythm and The Feel Collection.
The company also owns and operates rapidly growing national retail cannabis stores called Rise™ and Essence. Headquartered in Chicago, Illinois, Green Thumb has 13 manufacturing facilities, licenses for 96…
What Do Investors See In Medical Marijuana Stock (OTCMKTS:MJNA)?
Medical Marijuana Stock (OTCMKTS:MJNA) has emerged as one of many investor’s favorite pot stocks in the legal cannabis universe in 2020. The stock is already up about 10% in 2020, demonstrating how investors have warmed up to the stock early on in the New Year.
Following a disastrous 2019, cannabis investors lost money but have also learned that their best bets are stocks with strong fundamentals. They are looking for companies that have positioned themselves well in the cannabis industry and have what it takes to go for the opportunities. That is why MJNA stock is catching a lot of investor attention in 2020 because of how it has positioned itself in the cannabis market.
Robust revenue growth and strong financial position have also helped put MJNA on the radar of investors hunting for quality cannabis stocks. Revenue at MJNA more than doubled from $26.5 million in 2017 to $60 million in 2018. MJNA is also not in financial distress as may be the case with other cannabis companies out there. The company finished the third quarter, the most recent reported period, with $5.5 million in cash reserves.
Moreover, MJNA has recently taken steps to expand into new international markets and invest in companies that are leaders in their segments. These prudent actions are helping lift Medical Marijuana stock as more investors learn about them.
About Medical Marijuana stock
Is Tilray Inc (NASDAQ:TLRY) A Buy Or Sell?
For Tilray Inc (NASDAQ:TLRY) and the rest of cannabis stocks, 2019 was no doubt a bad year. But 2020 is shaping up to be a promising year for the stock. To start with, Tilray stock has already gained 8.35% year-to-date. If that says anything, it shows following the broad selloff in Tilray stock last year, we’ve got to a point where sellers are giving way to buyers in the stock.
There are several catalysts that should continue driving NASDAQ:TLRY as you’re about to see. First, below is a brief profile of the company we’re discussing.
Tilray is a Canada-headquartered global cannabis company. It is engaged in activities of cannabis cultivation and processing as well as marketing and distribution of cannabis products. Tilray already has several cannabis products brands to its portfolio. It operates across five continents through subsidiaries in Canada, Australia, Germany, and Portugal.
Following the broad collapse of cannabis stocks in 2019, investors are looking for cannabis stocks that can make a positive impact on their portfolios in 2020. Tilray stands out as an attractive cannabis stock pick in 2020. Here are some of the exciting things about the company.
Tilray CEO sees a bright future for the cannabis industry
On January 25, Tilray CEO Brendan Kennedy spoke on Bloomberg. In that interview, Kennedy framed a rosy outlook for the…