Medicine Man (MDCL): A Leading Indoor Cultivator
October 24th, 2016
There is certainly no wrong way to cultivate cannabis, as anyone growing cannabis plants in their basement can attest. But, there’s definitely a right way to cost-effectively grow high-quality plants. Expert cultivators optimize key performance indicators like pounds per light, grams per watt, or grams per square foot of flower canopy, since utilities and labor tend to be the most expensive component of any indoor grow operation.
Medicine Man Technologies Inc. (OTCQB: MDCL) provides consulting services covering all aspects of cannabis cultivation for both the newly minted operator in a state just coming online to an existing cultivator wishing to improve their overall efficiencies as well as outcomes. The company’s expert team has experience in a wide variety of cultivation methods making it an excellent solution for most any operation.
In this article, we will take a look at how the company is positioned to solidify its lead in the cultivation space with its pending acquisition and the launch of a new service called Cultivation Max.
There are a fixed number of variables to manage when it comes to cultivation, including but not limited to genetics, nutrients, cultivation methods, pest management, environmental management, harvest methods, and labor. Indoor cultivators generally achieve five or six harvests per year, while greenhouses might have three or four harvests per year, and outdoor cultivators would typically have only one harvest per year.
The best indoor grow operations can achieve two or more pounds per light, one gram per watt, or 50 plus grams per square foot of canopy per harvest cycle. Often times, these are levels that professional grow operations can achieve with a significant investment in the right technologies and personnel to control for the aforementioned variables. Exceeding these metrics might require a significantly greater investment in new technologies that could increase the payback period.
A Better Solution
In August, Medicine Man Technologies Inc. announced an agreement in principle to acquire Pono Publications Inc. and Success Nutrients Inc. The acquisition would include the Three A Light™ cultivation publication that has sold more than 800 copies at $500 a piece. By the end of the year, Three A Light™ plans to release its ‘Professional Grade’ guide that will be sold exclusively to Three A Light™ and Medicine Man Technologies licensed grade clients.
The new cultivation protocol pioneered by Three A Light™ has already achieved documented yields in the 125 grams-per-square-foot of flower canopy per harvest range and is deployable in both greenhouse and indoor-based cultivation facilities. In terms of the aforementioned key performance indicators, that translates to about three pounds per light over a 32 square foot table compared to the two lights traditionally placed over the same square footage – a significant improvement. It should be noted that these performance metrics are also dependent upon the genetics deployed and the performance metrics noted herein are generally achieved over twelve plus strains of differing cannabinoid profiles.
Medicine Man Technologies recently announced an Interim Products and Services Support Agreement with Pono Publications and Success Nutrients. This interim agreement allows the companies to work together synergistically while the final details of the acquisition are hammered out. In essence, the companies will combine forces almost as if the acquisition were completed, sharing revenues and expertise and marketing support to build each of the businesses involved.
Medicine Man Technologies has already begun to market this new cultivation service, referred to as Cultivation Max. The service differentiates itself from the competition by guaranteeing that the client’s cost per pound will drop while generating additional revenue from the delta in performance gains over the client’s current level of harvest in terms of dried cured flower. In other words, the company only generates revenue when its customers realize a tangible improvement in pounds per light and customers only pay when they realize a benefit that tangibly boosts their revenue. The fees generated for these services typically correspond to providing design services and a percentage of the improvement related revenue stream so clients are not burdened with fees that do not clearly reflect improvement.
Success Nutrients – the other part of the acquisition – is the culmination of two years of R&D and intensive testing. As nutrients specifically formulated for the cannabis industry, the company has generated $100,000 in sales in July as customers embrace the products. These are recurring revenues since cultivators must purchase nutrients over time for each harvest, which yields another compelling aspect of the business model. Success Nutrients is the recommended and exclusive nutrient line for the Cultivation Max service.
Medicine Man Technologies Inc.’s pending acquisition of Pono Publications Inc. and Success Nutrients Inc. could solidify its position as a leading provider of cultivation technologies. Rather than waiting, the companies are forging ahead now to bring the benefits of their combined experience and technologies to a competitive market full of growers in need of increased efficiency. With a compelling business model in place, investors may want to consider the company as a unique growth opportunity in the cannabis industry.
For more information, visit the company’s website at www.medicinemantechnologies.com.
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