MedReleaf Corp (OTCMKTS:MEDFF) has been diving over recent weeks. MEDFF was one of the most dramatic outperformers into year-end, jumping from the $6/share area to around $25/share in just a few months close out 2017. However, 2018 hasn’t been particularly kind to MEDFF investors, with shares diving back down in short order to test the $12/share area, sharply undercutting the 50-day simple moving average. However, we are starting to potentially see the makings of a bounce, spurred in part by the introduction of a new product line.
Specifically, the company just announced the introduction of its first adult-use recreational brand: San Rafael ’71, “inspired by and designed to celebrate the spirit of classic cannabis culture.” According to the release, “San Rafael ’71 has been designed with the classic consumer in mind, one of the largest segments of the Canadian cannabis market. San Rafael ’71 is for adults who are discerning and knowledgeable about cannabis products and those who value quality and an authentic experience.”
MedReleaf Corp (OTCMKTS:MEDFF) promulgates itself as a company that “sets The Medical Grade Standard & trade for cannabis in Canada and around the world.”
The first and only ICH-GMP and ISO 9001 certified cannabis producer in North America, MedReleaf is an R&D driven company dedicated to patient care, scientific innovation, research and advancing the understanding of the therapeutic benefits of cannabis.
Sourced from around the world and perfected in one of two state-of-the-art facilities in Ontario, MedReleaf delivers a variety of premium products to patients seeking safe, consistent and effective medical cannabis.
According to company materials, “MedReleaf sets The Medical Grade Standard™ for cannabis in Canada and around the world. The first and only ICH-GMP and ISO 9001 certified cannabis producer in North America, MedReleaf is a R&D-driven company dedicated to patient care, scientific innovation, research and advancing the understanding of the therapeutic benefits of cannabis. Sourced from around the world and perfected in one of two state of the art facilities in Ontario, MedReleaf delivers a variety of premium products to patients seeking safe, consistent and effective medical cannabis.”
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The gimmick here should be obvious: With recreational legalization nearing in Canada, the company is looking to capitalize on the cultural moment.
“While cannabis aficionados eagerly anticipate the day they can buy legal products, we thought we’d offer the San Rafael ’71 4:20 Pale Ale for them to enjoy while they wait,” noted Darren Karasiuk, VP Strategy at MedReleaf. “San Rafael ’71 4:20 Pale Ale does not contain any cannabis, but it will take you back to where it all began and introduce Canadians to the spirit of adventure, exploration and freedom at the heart of 4:20.”
“Our award-winning team created a flavor profile using a unique blend of citrus and summit hops and specialty malts that gives a nod to the cannabis experience with peach and pine aromas giving way to spice and mild bitterness,” noted Jeff Carefoote, CEO of Amsterdam Brewing. “In a further nod to 4:20, San Rafael ’71 4:20 Pale Ale contains 4.20% alcohol by volume and 42 IBUs.”
Recent action has seen 12% tacked on to share pricing for the company in the past week, but this action is running counter to the larger trend in the name. That said, MEDFF is a stock with a past that has featured a litany of sudden rips to the upside. Furthermore, the company has benefitted from a jump in recent trading volume to the tune of 72% above its longer-run average levels.
At this time, carrying a capital value in the market of $1.29B, MEDFF has a significant war chest ($74M) of cash on the books, which must be weighed relative to about $9.7M in total current liabilities. One should also note that debt has been growing over recent quarters. MEDFF is pulling in trailing 12-month revenues of $41.1M. However, the company is seeing recent declines on the top-line on a sequential quarterly basis, with revenues falling at -6.1% as of its latest reporting period. We will update the story again soon as further details emerge. Sign-up for continuing coverage on shares of $MEDFF stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $MEDFF, either long or short, and we have not been compensated for this article.