During the last month, we have seen increasing interest in the Canadian cannabis sector, and this is a trend that caught our attention. One of the facets of the rally that we found to be of interest is related to the companies that have benefited from the move higher.
2020 has been a transformational period for the cannabis industry and we are favorable on how the market has grown during this time. Despite facing headwinds from COVID-19, the Canadian cannabis industry has been reporting record numbers and we want to highlight an opportunity that is flying under the radar.
The company, Aleafia Health Inc. (AH.TO) (ALEAF) has been nothing short of an execution story and has reported several significant milestones so far this year. We believe that the recent developments have catapulted the business and are of the opinion that when compared to its peers the opportunity is trading at a discount.
If you were to compare the growth of the business to the leading Canadian Licensed Producers (LPs), you would notice that Aleafia Health is growing at a much faster rate and this is a trend that we expect to continue.
Following the issuance of important licenses from Health Canada, Aleafia Health is positioned to record incremental growth. Every key metric that is associated with the operation has significantly improved and we believe that this is a testament to the strength of the management team.
From the outdoor cannabis opportunity to a state-of-the-art production and processing facility, Aleafia Health represents an expansion story and we are favorable on the cost-effective strategy that was implemented by the team. Going forward, we expect Aleafia Health to record substantial growth as production capacity has significantly increased and are bullish on this aspect of the story.
Last month, the Canadian cannabis producer reported first quarter financial results that exceeded our expectations and we want to provide an update on this. During the period, Aleafia Health reported record revenue and EBITDA numbers with its the fifth consecutive quarter of strong revenue growth. Now that Aleafia Health’s infrastructure is fully licensed, and we believe that the business is positioned to record incremental growth.
The first quarter financial results represent Aleafia Health’s second consecutive quarter of positive adjusted EBITDA and we are favorable on this trend. In the second half of 2020, Aleafia Health plans to introduce a premium line of cannabis 2.0 products that are tailored to health and wellness consumers while further expanding the reach of its existing product portfolio. Going forward, we believe that Aleafia Health is firmly positioned to record better-than-forecasted revenue growth and margin improvement.
At current levels, we believe that Aleafia Health has a compelling valuation and a favorable-risk-reward profile. Following the completion of a more than $13 million private placement, the company is well capitalized and well positioned to execute on previously announced initiatives. We believe that Aleafia Health has visible growth prospects and are favorable on the track record that is associated with the management team. We have a high conviction level with Aleafia Health and believe that it is an opportunity to be aware of.
Aleafia Health is led by a management team that has proven its ability to adapt to the current market environment and we find this to be of importance. In April, the company completed its first direct-to-door medical cannabis delivery service transaction and we are favorable on the steps that the team has taken to support patients in a contactless manner.
If you are interested in learning more about the Canadian cannabis producer, please send an email to email@example.com to be added to our distribution list.
Pursuant to an agreement between StoneBridge Partners LLC and Aleafia Health Inc. (ALEF) we have been hired for a period of 90 days beginning February 15, 2020 and ending June 15, 2020 to publicly disseminate information about (ALEF) including on the Website and other media including Facebook and Twitter. We are being paid $8,000 per month (ALEF) for or were paid “ZERO” shares of unrestricted or restricted common shares. We own zero shares of (ALEF), which we purchased in the open market. We plan to sell the “ZERO” shares of (ALEF) that we hold during the time the Website and/or Facebook and Twitter Information recommends that investors or visitors to the website purchase without further notice to you. We may buy or sell additional shares of (ALEF) in the open market at any time, including before, during or after the Website and Information, provide public dissemination of favorable Information.