Medicine Man Technologies Inc (OTCMKTS:MDCL) shares have been ripping higher as the company continues to pile into an aggressive M&A strategy that could spell accelerating growth for the company. The company recently announced its latest binding term sheet to acquire Roots Rx, a cannabis operator with six dispensaries located in the ski and mountain towns of Colorado.
According to the release, the Company will also acquire Roots Rx’s outdoor cultivation facilities located outside of Aspen. This latest announcement comes on the heels of term sheets announced earlier this week to acquire a number of dispensaries, including retail locations using the Starbuds and Colorado Harvest Company brands and a series of independent dispensaries, which will bring the Company’s total dispensary count to 23 upon the successful closing of all the pending acquisitions.
Just after that, the company announced that it has entered into a binding term sheet to acquire four additional dispensaries in Colorado from a leading cannabis retailer. Under the terms of the transaction, Medicine Man Technologies will purchase the group of four dispensaries for $50,096,413, consisting of $25,048,206.50 in cash, the issuance of 4,202,720 shares of its common stock at a price of $2.98 per share, and a deferred cash payment of $12,524,103.25 to be made 12 months following the initial closing date.
Medicine Man Technologies Inc (OTCMKTS:MDCL) is a rapidly growing provider of cannabis consulting services, nutrients and supplies.
The company’s client portfolio includes active and past clients in 20 states and 7 countries throughout the cannabis industry. The company has entered into agreements to become one of the largest vertically integrated seed-to-sale operators in the global cannabis industry. Current agreements will enable Medicine Man Technologies to offer cultivation, extraction, distribution and retail pharma-grade products internationally.
The company’s intellectual property includes the “Three A Light” methodology for cannabis cultivation and pending acquisition candidate MedPharm’s GMP-certified facility, which has the first cannabis research license to conduct clinical trials in the United States.
Management includes decades of cannabis experience, a unique combination of first movers in industrial cannabis and proven Fortune 500 corporate executives.
Medicine Man Technologies, Inc. provides cultivation consulting services for cannabis growing technologies and methodologies. The company also provides licensing and seminar services. In addition, it engages in retail operations of cannabis products. The company was founded in 2014 and is based in Denver, Colorado.
Expansion in the Air
We started off by noting that MDCL recently hit the wires with the announcement of a number of M&A moves. Company executives capture the mood at the company with some extra clarity.
“These four dispensaries to be acquired culminate a tremendous run over the last week in which we announced the planned acquisitions of 22 dispensaries in Colorado,” commented Andy Williams, Co-Founder and Chief Executive Officer of Medicine Man Technologies.
“With an estimated 35% EBITDA margin, these retail stores are collectively expected to be some of the most profitable in our portfolio. We seek acquisition targets that meet strict operational and financial criteria, such as having a seasoned management team, commitment to high quality products and services, and strong revenue growth. Our new partners are aligned with our overall strategic objectives and will help accelerate our drive towards profitable growth, allowing us to compete and thrive in the rapidly changing cannabis industry. These shared core values will make our company culture even stronger and better positioned as we scale our business. The recognized and accomplished cannabis pioneers we are adding to our Company’s family distinguish us from many other industry competitors and will help us significantly expand our operations.”
And the stock has been acting well over recent days, up something like 24% in that time. Shares of the stock have powered higher over the past month, rallying roughly 33% in that time on strong overall action. A move above the $4/share level could trigger a major bullish breakout potential above recent resistance.
Medicine Man Technologies Inc (OTCMKTS:MDCL) generated sales of $1.8M, according to information released in the company’s most recent quarterly financial report. In addition, the company is sitting on cash levels around $4.3M.