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Will the New Financing Deal Spark Aleafia Health Inc (OTCMKTS:ALEAF) Shares?

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Aleafia Health Inc (OTCMKTS:ALEAF) just announced that the previously announced joint venture and financing transactions with Serruya Private Equity have closed. “We look forward to immediately executing on our shared vision of building and scaling a retail cannabis network with immediate national reach and global expansion plans,” said Aaron Serruya, a principal of SPE. “We are very excited to once again play an early role in developing one of the world’s largest cannabis companies.”

The stock has been pulling back and one wonders if this could be a spark to light a new fire in this high-momentum play. According to the release, the closing formalizes Aleafia’s acquisition of a 51% interest in Flying High Brands Inc., a domestic and international cannabis brands joint-venture and a 9.9% interest in One Plant (Retail) Corp. a Canada-wide cannabis retail joint venture.

Aleafia Health Inc (OTCMKTS:ALEAF) bills itself as a company that owns and operates a healthcare clinic that provides medical cannabis therapy to achieve optimum recovery and minimize illness and injury’s cumulative effects. The company provides medical cannabis therapy, pain management, physiotherapy, chiropractor, osteopathy, registered massage therapy, laser therapy, orthotics, and custom braces and compression socks. It provides consulting and support services for managing cannabis-sensitive cases.

The company assists rehabilitation professionals, case managers, social workers, life care planners, psychologists, family physicians, physiotherapists, litigators, and third-party insurance companies. Aleafia Inc. is based in Concord, Canada.

According to company materials, “Aleafia is a leading, vertically integrated medical cannabis company with a unique focus on delivering quality patient care from “seed” to “sale.” Aleafia is uniquely positioned with a singular focus on the medical cannabis market. The company operates the largest brick and mortar medicinal cannabis clinic network in Canada under the Canabo Medical Clinic brand, which is staffed by licensed, practicing physicians. Aleafia has obtained over 50,000 unique patients and maintains the largest medical cannabis patient data set in Canada. Aleafia’s state of the art production facilities will allow for the production of high-quality strains at low cost. Aleafia’s production will focus on securing the highest-quality medicinal product for its growing patient base.”

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As noted above, ALEAF just announced that the previously announced joint venture and financing transactions with Serruya Private Equity have closed.

Recent action has seen 2% tacked on to share pricing for the listing in the past week. In addition, the name has registered increased average transaction volume recently, with the past month seeing 21% beyond its prior sustained average level.

“Aleafia made a firm commitment to launch a national adult-use cannabis division with global ambitions. With final approvals now in place, we have delivered on that commitment,” said Aleafia CEO Geoffrey Benic. “With commercially proven brands and global retailing expertise, we believe our partnership with Serruya will provide significant value to our shareholders.”

Earning a current market cap value of $236.55M, ALEAF has a significant war chest ($30.3M) of cash on the books, which is balanced by about $2.2M in total current liabilities. One should also note that debt has been growing over recent quarters. ALEAF is pulling in trailing 12-month revenues of $3.1M. However, the company is seeing declines on the top-line on a quarterly y/y basis, with revenues falling at -85.5%. We will update the story again soon as further details emerge. Sign-up for continuing coverage on shares of $ALEAF 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 $ALEAF, either long or short, and we have not been compensated for this article.

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