Aleafia Health Inc. (ALEAF)

[FUNMAN]

Why I bought more Aleafia today.

They almost look like a USA MSO in some very important ways because they are a seed-to-sale operation. They have extraction facilities and their own chain of retail stores, and are partnering in another.

The company has distribution relationships across four provincial providers (Ontario, Saskatchewan, British Columbia and Alberta), three independent retailers (Fire & Flower, Starbuds, and OnePlant - more on that later), and Shoppers Drug Mart. By securing relationships with these outlets, Aleafia is well positioned to capitalize on the Canadian market and benefit from the change in the types of products that can be sold.

They are ready to produce edibles.

They have some leverage in the Australia, and in the EU cannabis market via a joint venture with German pharmaceutical wholesaler Acnos Pharma GmbH. That all needs further development but some ground work has been done.

A huge difference with almost all USA and Canadian cannabis companies is Aleafia is profitable on low revenues.

The PPS is under 50¢ because it's under investors' radar now because of those low revenues. What an opportunity! A hidden gem.

They sell their own product through their own Emblem stores. This is why they are profitable when other LPs are not.

They have more than 10,000 registered patients as of 2019-09-24.

They partnered with a family having $300M and an international franchise chain of over 1,200 frozen yogurt shops. The family are already experienced in the Cannabis industry as you will learn by reading more about them below.

With this partner they will open a mix of 5 newly licensed or existing licensed (rebranded) "One Plant" cannabis shops this month in Ontario. The plan is to open 15 MORE stores this year.

Even though Aleafia has enough indoor and outdoor grow facilities to support their 10,000 currently registered patients (as of 2019-09-24), they already let investors know at some point as they grow, that they will need to add to their growing capabilities.

I love the BoD and everything I've read about them.

A deeper dive into Aleafia's partners:

The Serruyas got their start in the sector through a seed investment in a Leamington, Ont., flower farm that was in the process of converting to a licensed producer under the federal government’s medical marijuana program. That company, Aphria Inc., is now one of the country’s largest producers with a market cap of roughly $4 billion. They’re also the largest shareholders in Liberty Health Sciences Inc., a medicinal marijuana company based in Florida. Another holding, a California maker of edibles called Plus Products Inc., filed a preliminary prospectus in August to trade on the Canadian Securities Exchange. “We believe the U.S. is five or six years behind where Canada is today,” Michael says, adding he believes federal legalization is inevitable at this point given that so many states have already moved forward.

The above paragraph was excerpted from this interesting article that was Last Updated, October 9, 2018, 2:08 PM EDT :

https://business.financialpost.com/…/the-cannabis-power-lis…

A deeper dive into Emblem Cannabis:

Aleafia and the Serruya Family own the chain of Emblem stores in partnership.

You want to check out this link:

About Emblem

https://emblemcannabis.com/about/

Search around for the store locations too.

If you you scroll down to "investors" and click on it, you are redirected right back to the Aleafia website.

The Serruya Family is worth over $300M and made their money in the Yogen Früz chain (over 1,200 stores operating in over 25 countries including the United States).

Together, they are opening new or rebranded (from prior licensees), 5 One Plant dispensaries in Ontario in January.

That means more high margin seed to sale revenues.

They plan to open fifteen (15) more One Plant stores in 2020. I'll believe it when I see it. But we know the partner is hungry to grow their cannabis investment.

Aleafia also seems to have the lowest cost per gram in the industry. Their outdoor grow facility generated flower at 8¢ per gram. Obviously their indoor facility will have a higher cost per gram.

I think Aleafia is a great operator that avoided all of the other LP's mistakes. They have a simple formula for profits and PPS growth.