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Greenleaf Pharma Inc is a late stage ACMPR applicant in Canada. Until a license to cultivate is issued by Health Canada there is no license to cultivate – it is that simple. Once a cultivation license is issued, the LP must produce two successful harvests that meet Health Canada’s regulations before a sales license will be issued. The time frame between the issuance of a cultivation license and the awarding of a sales license can be as little as six months but can also extend beyond twenty months. To minimize costs and the risk of loss, LPs tend to minimize the size of the harvests that will be inspected by Health Canada. In other words, there could be another three to five months before product is available for sale after a sales licenses is awarded. Greenleaf is located in the province of Ontario – Canada’s most populated province and where North America’s 4th largest city is located.
For our purposes, let’s assume all goes to plan and Greenleaf receives it cultivation license soon and they are awarded a sales license in just six months time afterwards. Let’s also assume the acquisitions proceed as planned and are approved.
Based on a potential 1-million square footage of grow space and their expansion into other profitable and growing markets when factoring in revenues their market cap when compared to peers appears low. Under such an apples to apples comparison, one would expect their market cap to be excess of $900M. Remember our assumption – everything goes to plan! In fact, their market cap could well be in excess of $1B. So why isn’t it? There is some uncertainty on a few fronts.
- Will the Federal Administration step in?
- Will the Canadian Government step in?
- Will AOI get all necessary regulatory approvals?
- Will direct stakeholders with a vote approve it?
- Lack of mainstream awareness and coverage of
AOI’s transformation?
- Debt?