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Although Canabo Medical Inc. (CMM: TSX Venture) (CAMDF: OTC) has been trading on the TSX venture exchange for only a month, the company has been able to capture the attention of the market as well as other businesses.
Over the last week, Canabo has continued to demonstrate its ability to execute on its business plan as the company made several important announcements.
Enters into an Agreement with a Large Medical Group
On Monday, Canabo announced a letter of intent with Peak Medical Group. Under the agreement, Peak will provide physicians and clinic space to assess up to 20,000 new patients under Canabo’s medical marijuana assessment, prescribing, educational procedures and protocols.
Peak Medical Group immediately began to provide training for up to 60 physicians and educators in Canabo’s proprietary training protocols with all resulting patients under this agreement to be enrolled in Canabo’s medical data collection program.
Receives $8.4 Million Investment from Aphria
Yesterday, Canabo announced an agreement with Aphria Inc. (APH.V) (APHQF) to raise gross proceeds of $8,400,000 through a private placement of 6,000,000 shares at $1.40 a share.
After giving effect to the offering, Aphria will own approximately 16.6% of the total issued and outstanding common shares of the company (on an undiluted basis).
Announced New Study on 7,500 Patients
Canabo also announced plans to complete a 7,500 patient observational study with Andrew Davis, Ph.D., of Acadia University in 2017. The study is expected to publish its initial results in late 2017 and complete study findings in 2018.
The study will focus on correlations within the patient database in three specific areas:
- The relation of opioid use following therapies by condition and patient category
- The relation of benzodiazepines use following therapies by condition and patient category
- The change in quality of life measurements following therapies by condition and patient category
An Attractive Opportunity
Canabo Medical owns and operates CMC Clinics, the largest chain of medical cannabis clinics in Canada.
Canabo Medical does not operate like a typical Canadian cannabis company and we are favorable on the company for the following reasons: 1) It has a proven track record of success when it comes to growing its patient base, 2) The company continues to see revenue growth on account of its rapidly growing patient base, 3) Its management continues to execute on initiatives and create value for shareholders, 4) Its partnership model should prove to benefit its existing business models, and 5) We are favorable on its leverage to a rapidly growing industry.
Canabo benefits from having three primary revenue streams: physician consultations, database subscriptions and independent medical evaluation consulting.
A Value Play
From a valuation standpoint, we think Canabo is an attractive opportunity as its average patient to market capitalization is in dollars, while the value of each patient is worth thousands of dollars for a licensed medical cannabis producer.
This relationship the company has with the client is focused on their individual condition and the specific benefits the patient is trying to achieve. The majority of patients are looking to find a treatment solution that allows them to add cannabis treatments to their daily lives.
This specialized and personal approach is unique to each patient and is therefore more personal and effective than the relationship the patient has with a licensed producer. The nature of this relationship extends the average time a patient utilizes a specific strain of medical cannabis. The patient-physician relationship will likely exist much longer than the average life of the licensed producer-patient relationship.
Important Investor Disclosures
Disclosure. Compensated Affiliate. This report was authored by and is property of StoneBridge Partners LLC. All information and data relied upon in drafting this report is publicly available. The author believes and considers its sources to be reliable, but does not guarantee the accuracy or completeness of any information contained in this report. Any and all information, data, analyses and opinions are provided for informational purposes only and is not intended, in any manner, as investment advice. Any projections or other information generated by StoneBridge Partners LLC regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. None of the material contained in this report is intended as a solution or offer to sell or purchase a specific stock or any other investment. This report is not directed to, or intended for distribution or use by, any person or entity that is a citizen, resident or located in any municipality, state, country or other jurisdiction where the distribution, publication, availability, or use of this report is contrary to any governing law or regulation. The securities discussed in this report may not be eligible for purchase and/or sale in certain jurisdictions or by particular individuals. It is important that you check any and all governing laws and/or regulations that may be applicable in your jurisdiction. Investing in securities of issuers organized outside of the United States, including ADRs, entail certain risks. The securities of non-United States issuers may not be registered with, nor be subject to the reporting requirements of the United States Securities and Exchange Commission. Please contact a Financial Advisor for professional advice regarding any and all securities investments. This report is intended for informational purposes only. StoneBridge Partners LLC’s officers, directors, employees, affiliates, or subsidiaries may have positions in securities covered by StoneBridge Partners LLC. StoneBridge Partners LLC receives compensation from the company and/or has a position in the securities mentioned in this report
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