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Tuesday, November 24, 2020

Rumors Swirl Around MedReleaf Corp (OTCMKTS:MEDFF) and Aurora Cannabis Inc (OTCMKTS:ACBFF)

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As we have stated in the past, it’s important to keep tabs on MedReleaf Corp (OTCMKTS:MEDFF), one of the most interesting stocks in the extraordinarily compelling Canadian cannabis space. That’s suddenly even more the case now that we are starting to see clear whispers of a potential deal in the making between MEDFF and Aurora Cannabis, a giant in the same space.

Why might we suggest that some sort of deal could be in the works here? Simple: because the company is coyly denying it. In its most recent press release, the company noted that it is “aware of a recent news article speculating as to a potential transaction involving Aurora Cannabis. As a general policy, MedReleaf does not publicly comment on unusual market activity, rumors or speculation in the marketplace or any potential transaction unless, and until, a binding legal agreement to effect that transaction has been signed.”

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.

The company was voted Top Licensed Producer at the Lift Canadian Cannabis Awards.

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. MedReleaf has an extensive list of cannabis varieties reported to help with numerous medical conditions. Many of these are exclusive to MedReleaf, including the well-researched and highly regarded Avidekel and Midnight from our partners in Israel, Tikun Olam. With an extensive research and plant breeding program, and regular patient monitoring and data analysis, MedReleaf is focused on accelerating our understanding of the numerous benefits of medical cannabis, and on validating new treatment options for patients. “

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As noted in the release, “In response to a request by Investment Industry Regulatory Organization of Canada, the Company confirms that it engages from time to time in discussions with other industry players, including Aurora Cannabis, regarding various alternatives. The Company has not entered into an agreement to effect any particular transaction, and there can be no assurance that such discussions will result in any such agreement.”

The fact that management is communicating such a between-the-lines “maybe” tone in these remarks is awfully telling. And so is the action in the stock. In a recent piece, we noted that we thought there was quite a bit of momentum going on under the surface here. That momentum is likely something attached to this deal narrative, and perhaps represents the work of those with some kind of inside sense of the real story.

Time will tell.

At this time, carrying a capital value in the market of $1.47B, MEDFF has a significant war chest ($114.6M) of cash on the books, which stands against about $1M in total current liabilities. MEDFF is pulling in trailing 12-month revenues of $42M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 8.9%. This may be a very interesting story and we will look forward to updating it again soon. 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.

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