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Medicine Man (MDCL) Adds Clients & Targets Acquisitions

Ryan Allway

December 28th, 2016

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The cannabis industry is expected to reach $20.6 billion by 2020, according to the market research firm ArcView. With over 20 clients across the United States, Medicine Man Technologies Inc. (OTCQB: MDCL) has become a top branding and consulting firm within the rapidly growing industry. Management’s recent acquisitions and future pipeline could further drive value in 2017 and beyond as the cannabis industry continues to mature.

In this article, we will look at the company’s tremendous progress in 2016 and potential for growth in the new year from both organic growth and acquisitions.

Unparalleled Experience

Medicine Man Technologies, a leading provider of consulting services to the cannabis industry, has experienced tremendous growth since its humble beginnings in mid-2014. By leaning on its experience operating an iconic Colorado dispensary, the company’s management team has helped more than 45 clients across 14 states secure licenses, avoid costly start-up mistakes, and consult with an expanding team of licensees and partners as needed.

The company then, in August, announced a deal to acquire Pono Publications and Success Nutrients to offer enhanced cultivation consulting and extraordinary nutrient lines to its growing client base. With the launch of Cultivation MAX, the company will leverage these technologies to help clients increase the efficiency and yield of existing cultivation operations. The service guarantees a decrease in cost and an increase in yield with fees generated without any upfront cost. Medicine Man is so confident in the system that it doesn’t charge fees unless it is as effective as advertised.

During the first three quarters of 2016, the company generated $568,388 in revenue from licensing and consulting fees. Management expects to grow these revenues as existing service agreements hit payment triggers based upon new state legislation in Oregon, California, Pennsylvania and Nevada. Notably, the company also reported a net income of $18,752 during the third quarter, which sets it apart from competitors in an industry where revenues are spotty and net income a rarity.

Organic Growth & Acquisitions

Medicine Man Technologies plans to expand over the coming year through a combination of new clients and strategic acquisitions. New clients continue to add incremental revenue and cash flow, while acquisitions provide opportunities to diversify and upsell to existing clients. With already-profitable operations, investors can directly benefit from the increase and revenue without as much dilution when making acquisitions.

The company is well positioned to organically grow its business as the number of states with legal medical and recreational marijuana continues to increase. In particular, management reported a surge in Pennsylvania business as it works to complete its rules making and application process associated with the passage of SB3 in April 2016. The addition of California to the mix could create significant additional opportunities as the largest revenue market. Medicine Man is currently supporting five Maryland clients with cultivation, processing, and dispensary deployment consulting projects and has also been responding to numerous requests from other Maryland phase one awardees.

In addition, the company continues to build out its brand warehouse concept with a growing pipeline of acquisitions. The Success Nutrients and Pono Publications acquisitions are being finalized, while the acquisition of Capital G (Funk Sack and Odor No) and other earlier stage deals could unlock further value for shareholders. These acquisitions could increase near-term revenue while creating long-term opportunities for growth, noting both Pono Publications as well as Success Nutrients are already profitable and will have generated in excess of $1M in their 1st year of operations (2016).

Looking Ahead

Medicine Man Technologies Inc. (OTCQB: MDCL) has built a leading cannabis consultancy along with a brand warehouse that sets it up for the long-term. With its initial acquisitions in place, investors have an opportunity to invest in the company at a valuation of just under $30 million, which could be significantly less than its long-term potential. Capturing just a fraction of the $20+ billion market could generate significant shareholder value over time.

For more information, visit the company’s website at www.medicinemantechnologies.com.

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.

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CFN Enterprises Inc. (OTCQB: CNFN) owns and operates CFN Media Group, the premier agency and financial media network reaching executives, entrepreneurs and consumers worldwide. Through its proprietary content creation, video library, and distribution via www.CannabisFN.com, CFN has built an extensive database of cannabis interest, assisting many of the world’s largest cannabis firms and CBD brands to build awareness and thrive. For more information, please visit www.cfnenterprisesinc.com.

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