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 about $4. 3M in cash. That puts the stock in a sweet spot as far as valuation in the pot space, with shares trading at around 14x sales.
We would be remiss if we didn’t note the strong narrative in play here as well, with an aggressive 30% rally during the month of September. But this one hasn’t been overloaded with speculative money, so the trade looks set to possibly breakout again in October if the stars align once again.
One of the big keys for this stock has been its positioning in the space following the passage of HB 19-1090, a new Colorado state bill that will take effect on November 1, and allow for outside investors, venture capitalists and private equity firms to gain investment access to Colorado’s cannabis industry.
At a time when cannabis is valued at $1.5 billion and is expected to grow to $2.1 billion by 2022 in Colorado alone, the company believes this legislation may very well serve to accelerate Colorado’s leadership position in the entire cannabis industry, and those entities fortunate enough to do business in the state.
This dovetails extremely well for the company, given its aggressive roll-up strategy in the space, which includes:
- binding term sheet agreements to integrate 12 cultivation facilities,
- 7 proprietary extraction facilities,
- 7 manufacturers of infused products,
- 33 strategically located retail dispensaries, and
- a state-of-the-art manufacturing, research and development lab that represents Colorado’s first and only active cannabis research license
That could well explain the enthusiasm in play here, and account for the sector-leading momentum that MDCL has shown in the space over recent months – something that looks quite well situated to continue in the weeks ahead given the giant that appears to be under construction right now.