Medicine Man Technologies Inc (SHWZ)

[Drugdoctor]

Medicine Man (MDCL): Building a Leading Cannabis Brand Warehouse


The cannabis industry in the United States is expected to reach $50 billion by 2020, according to a new report from Cowen & Co., which represents more than eight times its current size. Given the high level of legal uncertainty and relative newness, the industry remains highly fragmented with a large number of small companies and few large companies. These dynamics have left the door open for innovators to build future billion dollar companies.

In this article, we will take a look at one company that has already built a name for itself in cannabis consulting and plans to become the leading brand warehouse.

Building a Base in Consulting
Andy Williams and his brother Pete Williams started Medicine Man in December of 2009 to become the Costco Wholesale Corp. (NASDAQ: COST) of marijuana. Six years later, the iconic Colorado dispensary became a $17 million per year juggernaut and the founders decided to branch out by partnering with Brett Roper (co-founder and COO of MDCL) to provide cannabis consulting and branding services to cultivators, dispensaries, and other cannabis companies throughout the U.S.

Medicine Man Technologies Inc. (OTCQB: MDCL) began in April 2014 as a consulting practice designed to help aspiring cannabis companies build their businesses. By leveraging their experience running a Tier III cultivator and dispensary in Colorado, the company has already helped clients across many states (Medicine Man Technologies currently has 19 active clients in 11 states including Puerto Rico) develop similar operations, as well as other companies obtain licenses in states where the drug has been legalized.

These consulting agreements not only provided the company with early revenue, but also positioned them as a market leader and created a valuable database of contacts for the next phase of its business – to become a ‘brand warehouse’ for the cannabis industry. With all of the pieces in place, the company is now looking to expand into this new vertical and diversify away from purely consulting to deliver significant value to shareholders.

Becoming a ‘Brand Warehouse’
Medicine Man Technologies’ long-term goal is to become a leading ‘brand warehouse’ for the cannabis industry in much the same way that Procter & Gamble Inc. (NYSE: PG) has become a brand leader in consumer care products. By leveraging its public company status, the company plans on making a series of strategic acquisitions of valuable cannabis brands across the value chain, ranging from packaging to nutrients to production.

These acquisitions would not be rebranded under the Medicine Man name, but rather, keep their own brand equity that has built up over the years. At the same time, the acquired companies will realize significant gains through economies of scale by being under the same roof. A great example is the company’s August announcement of plans to acquire Pono Publications and Success Nutrients, which have lighting and nutrient products on the market. A couple of weeks earlier, Medicine Man announced an agreement in principle to acquire Capital G LTD, a holding company for the Funk Sac, Odorno, and Commodigy brands.

The goal with these acquisitions is to build a seed-to-sale portfolio of products and services that it can offer in conjunction with its consulting services. By doing so, the company is able to help aspiring cannabis companies do everything from obtaining licensing and establishing best practices to acquiring the right equipment and technologies to becoming operational and grow their business over the long run or, as the company itself puts it in the mission statement, Medicine Man Technologies is a family of brands revolutionizing the cannabis industry.

Most recently their new cultivation partnership should allow the company’s clients to achieve cultivation performance metrics in the three-plus pounds-per-light range, or 600 grams per square foot of flower canopy, in an industry that has in the past considered two pounds-per-light and 300 grams per square foot of flower canopy to be strong performance. This new service is now referred to as Cultivation MAX, and MDCL already has new clients in the California marketplace desiring to improve their results in a similar manner.

Looking Ahead
Medicine Man Technologies represents a compelling opportunity within the cannabis industry. With existing revenue and a growing client list from consulting, the company is well positioned to capitalize on the next phase of its business plan and become a leading ‘brand warehouse’ within the cannabis sector. The company has already started making acquisitions across the value chain and aims to become a one-stop shop for cannabis companies.

For more information, visit the company’s website at www.medicinemantechnologies.com or visit their profile on CannabisFN at http://www.cannabisfn.com/mdc/medicine-man/.


Ryan Allway | CFN Media Group
October 3 2016