This Marijuana Stock Is Worth Watching
Christmas may be over but for one marijuana company, the party has just begun. A Canadian medical marijuana company, MedReleaf Corp (OTCMKTS: MEDFF), (TSE: LEAF) is on a tear after closing a major deal in the industry. MedReleaf stock popped 35% last week, leaving investors in awe.
MedReleaf is not just another marijuana company. If you recall, it was the largest marijuana IPO of 2017, earning a staggering valuation of $900.0 million even before going public in May.
However, in the month following its IPO, the naysayers came pounding at it. MedReleaf was called a dud just as its stock crashed below its IPO price.
But guess what; LEAF stock not only reversed that drop, it has more than doubled from there, proving all bearish estimates to be completely off the mark.
The stock, which went public at a price of $9.50 just seven months ago, was trading over $20.50 at the time of writing. So had you bought it when it went public, you would have earned an impressive triple-digit return on your investment by now. A solid 115%!
Chart courtesy of TradingView.com
Returns like these may be unusual in other industries but investors of marijuana stocks are accustomed to seeing these numbers.
That’s because marijuana stocks have been some of the best-performing investments of 2017 and 2018 is expected to be an even better year for them.
I know, I know. You’ve been listening to this broken record over and over again. Canada is legalizing recreational marijuana by July 2018. It’s going to be a joy ride for marijuana stocks. Marijuana stocks will double, triple, quadruple from here. Blah blah blah!
Except, I hate to break it to you, not all marijuana stocks are poised for a big win. Only a handful will make the cut. And here’s why MedReleaf marijuana stock may be one of them.
MedReleaf Seals the Deal
Why do I say that? Because MedReleaf has just sealed a major sales deal with Canada’s biggest drugstore chain, Shoppers Drug Mart.
As part of the deal, MedReleaf has become an official supplier of medicinal marijuana to the Canadian pharmacy chain. (Source: “MedReleaf signs supplier agreement with Shoppers Drug Mart,” NewsWire, December 21, 2017.)
For now, Shoppers Drug Mart will be selling MedReleaf’s marijuana products online, until full legalization paves the way for legal sales at retail stores.
This is a great victory for MedReleaf, which puts it one step ahead of the pack.
MedReleaf is the second marijuana company to have struck such a deal. Earlier in December, Aphria Inc (OTCMKTS:APHQF, TSE:APH) became the first medical cannabis seller to close a similar deal with the pharmacy chain.
I recently shared my bullish thesis on Aphria where I discussed ubiquity as a formula for success. The “everywhere” factor has allowed many average businesses to become household names. On the same premise, this marijuana company has taken off on the right foot.
Just so you know, Shoppers Drug Mart has more than 1,200 pharmacies across Canada. Getting shelf space on its retail outlets would mean MedReleaf products would be selling “everywhere” across the country.
Take it this way; in an industry that’s still birthing, MedReleaf would earn its “first mover” advantage ahead of many of its peers.
That’s not all. A couple of other “firsts” already add to MedReleaf’s claim to fame.
Apart from being the first most highly valued marijuana IPO, MedReleaf is also the first ISO 9001-certified marijuana producer in North America. The ISO 9001 certification is awarded to companies that meet a set of stringent quality control measures.
That puts MedReleaf’s cannabis strains and derivative products at higher quality grade than most of its competitors.
Just last year, the company also became the first to get approved for selling cannabis capsules to patients. Unlike most medical marijuana companies, which sell cannabis oil or vaporizers for administering the drug, MedReleaf became the first to start selling marijuana in a capsule form, making it easy for patients who prefer to take oral medicines.
These recognitions have earned MedReleaf a good name in the medical community. You can easily judge it by looking at its sales figures.
MedReleaf made sales of roughly $9.82 million in the most recent quarter, about 16% higher than the more popular Aurora Cannabis Inc (OTCMKTS: ACBFF, TSE: ACB) and about 38% higher than Aphria.
The only Canadian marijuana company it trails in terms of sales revenue is Canopy Growth Corp. (OTCMKTS: TWMJF, TSE: WEED), which is the largest marijuana producer in Canada.
From where I see it, the odds are seemingly in favor of MedReleaf stock. MedReleaf may be riding the pot boom higher than most other Canadian marijuana stocks in 2018. It’s one stock you must add to your watch list ahead of Canada’s legalization day.