This week, we take a look at ones of Canada’s first in the game: MedReleaf. First licensed in February of 2014, the company is said to be the first and only ISO 9001 certified medical cannabis producer in North America. MedReleaf, based in Markham, Ontario, brought in $42 million in sales and sold more than 4,100 kilograms of dried cannabis over past year.
MedReleaf – Volume 002
MedReleaf Corp. (the “Company”) is a Canadian private company incorporated on Feb 28, 2013, to produce and distribute medical cannabis as regulated by the Access to Cannabis for Medical Purposes Regulations (AMCPR). The company received its license from Health Canada on Feb 14, 2014, to produce and sell medical cannabis pursuant to the provisions of the ACMPR. MedReleaf is licensed as follows:
- Cultivate dried cannabis
- Sell dried cannabis
- Produce cannabis oils
- Sell cannabis oils
- Sell cannabis oil capsules
MedReleaf Location & Facilities
MedReleaf is located in Markham Industrial Park in Markham, Ontario, where it sits on a state-of-the-art 55,000 square foot facility as follows:
Markham, Ontario Facility
- 23,500 sq ft. of cultivation space
- 21,500 sq ft. of office, storage, and R&D space
Bratford, Ontario Facility (estimated)
- 94,000 sq ft. of cultivation space
- 116,000 sq ft. of office, storage, and R&D space
The R&D space currently operates over 20 investigative studies, a wide plant breeding program as well as regular data analysis and patient monitoring.
The company recently completed the purchase of an additional 210,000 square foot production facility in Bradford, Ontario for analytical testing. The new plant sits on 11 acres of an industrialized zone and will be used for the production and sale of medical cannabis. The company already has the necessary funds to increase production to up to 35,000kg per year with $40 million set aside for the completion of the new facility. MedReleaf’s strategy focuses on understanding the many potential health benefits offered by cannabis as well as authenticating new alternative treatments for patients using cannabis.
MedReleaf has a wide range of cannabis varieties that have been proven to be effective in treating various medical conditions. Many of the varieties are exclusive to the company. Some of their most highly regarded products include:
- Tikun Olam (form their partners in Israel)
The growers and horticulture experts at MedReleaf have a combined experience of over 100 years in the art of growing medical marijuana.
Revenues in the first quarter of 2018 amounted to $10.5 million. This represents a 19% improvement from the same period in the previous fiscal year. The rapid growth was attributed to the increase in capacity of production, improvements in yields, as well as increased patient demand. Nearly 15% of the revenue was collected from the sale of cannabis-based extracts.
The Company sold a total of 1,157 kilograms of cannabis products at an average of $9.04 per gram, as compared to $8.87 in the last quarter of 2017. However, the net income dropped by 87% as compared to the first quarter of the last fiscal year. This was associated with the high costs of the company going public, increased overhead and operating expenses, and stock-based compensation. The increase in gross profit and decrease in income tax expenses slightly offset the loss.
During the month of April 2017, the Company completed the construction of the first phase of the facility, including grow rooms with a capacity of producing 2,800 kilograms of dried and extract-based cannabis products.
By the beginning of July, the company had completed the first harvest from the first phase of the Bradford facility, and sales are expected to occur before the end of the second quarter of the current financial year thanks to their rigorous quality assurance processes.
MedReleaf carried out its first export to Brazil successfully in July of 2017 which reflects the significant progress in its international growth objectives.
MedReleaf Partners and Subsidiaries
MedReleaf licensed some of its intellectual property to an Australian firm in a bid to support their application for the license to cultivate and manufacture medical cannabis in Australia.
The Company acquired 10% of the Australian corporation through its subsidiary, Holdings Australia and will operate as “MedReleaf Australia” if the application succeeds.
The Company also entered into a licensing and distribution agreement with CannaKorp Inc., the manufacturer and developer of CannaCloud based in Massachusetts. CannaCloud is a single-use, disposable, pod-based vaporizer, you can think of it as the Nespresso of marijuana. The agreement allows MedReleaf to produce the pods exclusively and upon approval, a range of strains/blends will be available to clients in Canada via the Company’s website.
In February 2017, MedReleaf partnered with Ehave to develop a branded MedReleaf mobile application. The app will utilize Ehave’s mental health informatics platform called Ehave Connect in order to further progress the study and consequent therapeutic use of medical marijuana.
MedReleaf Medical Cannabis Licenses
MedReleaf Corp received its license from Health Canada on Feb 14, 2014, to produce and sell medical cannabis pursuant to the provisions of the ACMPR. The company must submit an application to renew this license annually, with the current license expiring on August 18, 2017.
In May 2017, MedReleaf’s partners in Australia submitted an application for growing and manufacturing cannabis oils to the Australian Office of Drug Control. Similarly, in June, its German subsidiary, MedReleaf Germany GmbH also submitted an application to cultivate medical cannabis to the German Federal Institute for Drugs and Medical Devices. The subsidiary advanced to the second stage of the licensing process in July.
The company received its license from Health Canada under section 35 of the ACMPR on April 12, 2017. This was for the production of dried medical cannabis in the two completed grow rooms at the Bradford facility.