Time To Bet On Medicine Man Stock (OTCMKTS:MDCL)

Medicine Man Stock (OTCMKTS:MDCL) appears to be trading at a discount relative to its tremendous potential and long term prospects. After an impressive run in 2019, the stock has pulled lower in what appears to be a consolidation phase.

Medicine Man Stock Catalysts and Price Analysis

The pullback has come hot on the heels of improving underlying fundamentals that point to solid growth metrics as well as positive long-term prospects. For starters, the company has embarked on an aggressive acquisition strategy as it seeks to strengthen and expand its footprint in the broader cannabis sector.

Likewise, improved operational efficiency has helped drive revenue growth. Similarly, the company has seen its cash balance improve significantly in recent quarters, which means the company is well-financed to pursue strategic initiatives.  The strengthening of the leadership has also come into play as Medicine Man Technologies seeks to take advantage of new ideas able to accelerate underlying growth.

Amidst the development, the stock has pulled lower in recent months in line with a bearish wave that has gripped the overall industry. That said, the stock faces immediate support at the $2.40 level as part of the pullback.

Medicine Man stock needs to rise and find support above the $3.20 level should pave the way for the stock to make a run for the $4 resistance level.

About Medicine Man Stock

Medicine Man Technologies casts itself as a leading provider of cannabis consulting services nutrients and supplies. The company boasts of a client portfolio in over 20 states in the U.S and 7 countries. The signing of multiple agreements has allowed the company to become one of the largest vertically integrated seed-to-sale operators in the industry.

Strengthening Executive Leadership

Medicine Man Technologies has sought to position itself for sustainable growth by carrying out changes to its executive leadership. Conversely, the company has confirmed the appointment of Andy Williams as the vice-chair and president with a focus on growth initiatives and Bob DeGabrielle as the Chief Operating Officer. Justin Dye, on the other hand, is to take over as the executive chair and Chief Executive Officer.

While Andy Williams succeeded in scaling the business and taking Medicine Man Technologies public, the new CEO is tasked with the responsibility of spearheading the next phase of growth. With over 25 years of strategic management, operations and finance experience, Dye is tasked with the responsibility of coming up with new initiatives and opportunities across the industry.

“The combination of a world-class executive team, the great people of Medicine Man Technologies and its targeted acquisition partners create a team that is unrivaled in the industry. Our strategy to become one of the largest vertically integrated cannabis operators in North America is a big opportunity for us, and I am excited to work alongside pioneers of the industry,” said Mr. Dye.

Improving Operational Efficiency

The management appointment comes at a time when Medicine Man Technologies is experiencing high levels of operational efficiency.  In the third quarter, the company posted a 14% increase in revenues that came in at $4.67 million. However, the company posted a net loss of $1.8 million compared to a net income of $4.9 million posted a year earlier.

The transformational quarter saw the company’s cash balance improve to $15 million as of September 30, 2019, compared to $529, 674 million as of the previous year. A solid balance sheet has helped the company carry out a number of acquisitions. Likewise, the company has entered into binding agreements to acquire 12 cultivation operations and 7 product manufacturing operations as well as 33 dispensaries and excellent R&D capabilities.

The operations that Medicine Man Technologies is moving to acquire have combined revenues of $170 million. Likewise, the operations should make the company one of the biggest cannabis companies in the industry

Bottom Line

The future is looking bright for Medicine stock as it moves to strengthen its prospects and operations in the industry through acquisitions. A 14% increase in revenues in the third quarter affirms the company’s business model, which should continue generating value going forward.

Likewise, an aggressive acquisition strategy should strengthen the company’s competitive edge in the industry. While the stock has pulled lower in recent months, the pullback in our view presents an opportunity to buy the stock at a discount, given the tremendous potential for Medicine Man stock.

We will be updating our subscribers as soon as we know more. For the latest updates on Medicine Man stock, sign up below!

Disclosure: We have no position in Medicine Man stock and have not been compensated for this article.