The Canadian MJ Index has been in correction mode after reaching all-time highs in mid January 2018. Since then almost every major stock in the sector has seen a sharp drop in valuation.
Often times it’s when things seem the worst that the best opportunities present themselves. Like the old saying goes “it’s always darkest before dawn”
Investors are now starting to scan the markets looking for strong companies trading at a deep discount to their previous highs.
In our opinion we believe we may have found one of the most undervalued MJ stocks in Canada. We are making Aleafia Health Inc. (TSXV: ALEF) our top undervalued pick for 2018.
Markets can exaggerate prices in either direction and in the case of ALEF we feel the market has under-priced their stock.
In recent news ALEF announced the closing of a business combination with Canabo Medical Inc. Before the combination Canabo Medical (previously CMM.V) closed trading at $0.69 per share on December 22, 2017 before a nearly 3 month long halt.
During the halt, ALEF announced it raised $30,213,750 via private placement at $1.25 per share. The stock is currently trading at $0.60 per share. That’s a 52% discount to the $1.25 private placement. The investors in these private placements are typically very wealthy accredited investors. Having the opportunity for the average investor to buy into the same stock at half the price is not a common occurrence. This is a rare situation and a great opportunity for our followers/investors.
With $30m+ in the bank and the stock trading below CCM’s valuation before the business combination we see this as a great value play for investors.
Aleafia is the only Licensed producer with a large network of MMJ-expert Doctor-manned clinics— a downstream place to showcase their premier medical strains to patients in a one stop shop— a vertical integration strategy effectively rendering them unaffected from the demand issue soon to be facing most other competitors.
They are turning the typical Canadian LP model on its head.
In the coming months with the focus switching to recreational sales, other LP’s will struggle, in our opinion, to get their product into consumer’s hands unless they have a downstream distribution solution. Deals with drug store pharmacies are only a temporary solution, in our opinion.
As Aleafia’s fully funded 150,000 square foot greenhouse is constructed near the 6 million people in the greater Toronto area over the coming months, ALEF can slowly migrate ALL their thousands of patients to their world-class strains, growing the income statement in the process.
They also plan on increasing their clinic count from the current 22 from coast to coast, as well as increase their patient count at their existing locations. This could provide a sustainable increase in demand and an obvious increase in revenues.
ALEF’s ultimate goal is a 1.2 million square foot greenhouse grow, which by comparable standards could produce over 100,000,000 grams yearly. With the right clinic and patient growth, there could be a home for all of this supply under the ALEF umbrella.
The value is in the patients!
Technical Analysis 📈
Taking a quick look at the ALEF chart we can clearly see the stock has been unfairly beaten down over the past 2 weeks.
With the RSI and slow stochastics in oversold territory and beginning to turn upward it’s easy to see ALEF is overdue for a strong bounce and possibly a full on reversal.
ALEF closed trading yesterday at $0.60 per share, up 15.4% on strong afternoon buying. ALEF was one of the top performing stocks in the entire sector. The large green candle and a new higher low is exactly what we want to see when a stock is trying to form a bottom and eventually reverse to the upside.
All things considered we love ALEF’s vertically integrated business model and feel the early struggles with the stock could ultimately end up being a blessing in disguise for our followers.
Take some time this evening to do your full due diligence and read up on everything ALEF is working on. We think you will be very impressed. To get you started we have included some DD links below.
Best of luck and happy trading.
ALEF Technical Chart:
Investment Highlights 📊
Canada’s premier vertically integrated MMJ company
Existing licensed producer with 150,000 sq. ft. facility in 2018 and plans for 1,200,000 sq. ft. on 76 acres in Ontario
22 operating clinics nationwide. Expanding to 40 clinics in 2018.
40,000 patients to date. Adding 1,500 new patients per month and expected to exceed 2,000 per month by end of Q1 2018.
In house patients provides for higher gross margins when LP production comes on stream.
Largest research database for MMJ studies provides competitive advantage. (Access to data on efficacy of various strains, MJ derivatives, delivery and dosage).
Multiple revenue streams from: Patients, MMJ, research, and big data monetization.
Negotiating multiple large scale research projects for MMJ.
Seasoned management team and board of directors with decades of experience in regulatory affairs, science & technology, and lifestyle branding.
About Aleafia Health Inc:
Aleafia Health is dedicated to bringing Canadians medical cannabis care through nation-wide medical cannabis clinics, a world-class processing and distribution facility, and innovative research. Aleafia Health Inc. is one of Canada’s leading, vertically integrated medical cannabis company with a unique patient-focused, medical cannabis healthcare solution. Led by a distinguished and experienced corporate leadership team, Aleafia Health Inc. is pioneering a patient-centric experience that includes personalized services before, during and after treatment. Aleafia’s 23 cannabis clinics are staffed by licensed, practicing physicians with more than 80 trained physicians. Aleafia Health Inc. has realized sustained patient acquisition growth and retention, underscoring the success of Canada’s first “patient-centric” cannabis-based health network.
135,944,461 common shares
6,689,000 stock options
DD Links 📝
ALEF Corporate website: https://aleafiainc.com/
ALEF Recent news: https://aleafiainc.com/news/
ALEF BNN Video Interview: https://bit.ly/2uXWv67
ALEF Facebook: https://www.facebook.com/AleafiaInc/
ALEF Twitter: https://twitter.com/aleafiahealth
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This report/release/profile is a commercial advertisement and is for general information purposes only. We are engaged in the business of marketing and advertising companies for monetary compensation unless otherwise stated below. The Wealthy Venture Capitalist and its employees are not a Registered Investment Advisors, Broker Dealers or a member of any association for other research providers in any jurisdiction whatsoever and we are not qualified to give financial advice. The information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of the available data. Sometimes human error can attribute to honest mistakes in reporting on issues regarding public companies and overall capital markets, and as such we are not responsible for the complete accuracy in these reports as the reader is required to verify all statements to ensure they are completely accurate. The Wealthy Venture Capitalist’s controlling parent company has been compensated $17,500 per month for 12 months by Aleafia Health Inc. (ALEF). The Wealthy Venture Capitalist’s controlling parent company hold 100,000 purchase options in Aleafia Health Inc. (ALEF). The Wealthy Venture Capitalist encourages readers and investors to supplement the information in these reports with independent research and other professional advice. All information on featured companies is provided by the companies profiled through their website, news releases, and corporate filings, or is available from public sources and The Wealthy Venture Capitalist makes no representations, warranties or guarantees as to the accuracy or completeness of the disclosure by the profiled companies. The Private Securities Litigation Reform Act of 1995 provides investors a ‘safe harbor’ in regard to forward-looking statements. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, goals, assumptions or future events or performance are not statements of historical fact may be “forward looking statements”. Forward looking statements are based on expectations, estimates, and projections at the time the statements are made that involve a number of risks and uncertainties which could cause actual results or events to differ materially from those presently anticipated. Forward looking statements in this action may be identified through use of words such as “projects,” “foresee,” “expects,” “will,” “anticipates,” “estimates,” “believes,” “understands,” or that by statements indicating certain actions “may,” “could,” or “might” occur. Understand there is no guarantee past performance will be indicative of future results. Past Performance is based on the security’s previous day closing price and the high of day price during our promotional coverage. Readers must visit our website at www.