Canadian Cannabis Producer MedReleaf IPO Ahead

MedReleaf IPO

Ontario-based MedReleaf filed its preliminary prospectus ahead of its planned Initial Public Offering and has engaged GMP Securities to lead the deal. Most of the Canadian licensed producers have gone public through reverse-merger, with MedReleaf to become the second LP to go public through the IPO process following the recent offering from CanniMed Therapeutics (TSX: CMED) (OTC: CMMDF) at the end of 2016.

MedReleaf, which operates a 55K sq. ft. facility in Markham, received approval from Health Canada earlier this month to begin cultivating at a second facility in Bradford. The larger Bradford facility is 210K sq. ft. and is projected to have capacity of at least 28mm grams per year after completion of the buildout.  The company produced revenue of $10.43mm in the quarter ending 12/31/16, making it likely the second largest producer behind Canopy Growth (TSX: WEED) (OTC: TWMJF), which had sales of $9.75mm but subsequently acquired Mettrum, which had sales of $5.29mm.

The prospectus lives up to the billing as “preliminary”, with lots of information omitted. It lists ten selling shareholders but not the size of their stakes or the amount they intend to sell, including CEO Neal Closner, the MedMen Opportunity Fund, Tikun Olam, separate entities controlled by Stephen Arbib, Theodore Wine, Vadim Soiref, Tarik Ouass and Raymond Leach.

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Exclusive article by Alan Brochstein, CFA
Alan Brochstein, CFA
Based in Houston, Alan leverages his experience as founder of online communities 420 Investor, the first and still largest due diligence platform focused on the publicly-traded stocks in the cannabis industry. With his extensive network in the cannabis community, Alan continues to find new ways to connect the industry and facilitate its sustainable growth. At New Cannabis Ventures, he is responsible for content development and strategic alliances. Before shifting his focus to the cannabis industry in early 2013, Alan, who began his career on Wall Street in 1986, worked as an independent research analyst following over two decades in research and portfolio management. A prolific writer, with over 650 articles published since 2007 at Seeking Alpha, where he has 70,000 followers, Alan is a frequent speaker at industry conferences and a frequent source to the media, including the NY Times, the Wall Street Journal, Fox Business, and Bloomberg TV. Contact Alan: Twitter | Facebook | LinkedIn | Email

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