The ancillary cannabis market represents a significant opportunity and we believe that this market is often overlooked by investors for more sexy opportunities (i.e. cannabis producers, cannabis brands, and multi-state-operators).
Although the ancillary cannabis market is less exciting than the market where companies are touching the plant, this is a multi-billion-dollar opportunity that has been flying under the radar and we want to highlight a company that is focused on capitalizing on it. The company, Premier Health Group Inc. (PHGI.CN) (PHGRF) has significantly advanced its story through a series of organic and inorganic growth initiatives and is led by a management team that is focused on creating value for shareholders.
An Emerging Ancillary Cannabis Company
The healthcare technology company has several potential catalysts for growth, and we are favorable on the acquisitions that it has made. When looking at Premier Health’s growth prospects, we are most excited about its leverage to the cannabis industry and find this to be a significant part of the story.
Last month, Premier Health reported a significant development with the launch of an international expansion strategy that is focused on expanding its reach through its medical cannabis initiatives. As more countries legalize medical cannabis, Premier Health plans on selling its comprehensive Electronic Medical Record (EMR) platform that has been developed specifically for the medical cannabis industry in countries such as the United States, the United Kingdom, and Australia.
With more than 30 countries having legalized some form of cannabis, the international cannabis market represents a massive opportunity, and this is an initiative that we are excited about. During the last year, there has been a significant increase in the number of countries that have passed legislation to create a legal medical cannabis program and we expect to see strong demand for Premier Health EMR cannabis platform.
When it comes to valuing the medical cannabis market as well as the EMR market, you don’t have to take our word for it. We have found research that provides insight into the size of these markets and find these numbers to be significant. According to a report by Zion Market Research, the global medical cannabis market was valued at approx. $11.8 billion in 2017 and is expected to be a $40.9 billion market by the end of 2024. According to P&S Market Research, the global EMR market is projected to be a $30.4 billion market by 2023. These markets represent massive opportunities for Premier Health, and we will monitor how the team is able to execute on this initiative.
Currently, there is a significant information gap when it comes to the medical community and the medical cannabis opportunity. Through clinical trials, several leading biotech companies have already proved that there is significant medical value associated with the cannabis plant. Demand for cannabis oils, especially high cannabidiol (CBD) oil, continues to increase and this is a trend we expect to continue as researchers learn more about the therapeutic value cannabinoids provide. Premier Health is looking to fill this information gap by using clinically led, evidence-based data which will be embedded directly in its EMR software to help guide doctors to the appropriate medical cannabis product and dosing.
Later this year, we expect Premier Health to provide updates on how this initiative is progressing and this could prove to be a major catalyst. We believe that the market underappreciates the growth prospects associated with the cannabis industry and Premier Health’s EMR platform and are of the opinion that their significant value associated with this emerging opportunity, especially in emerging cannabis markets.
Cloud Practice will Prove to be a Strategic Acquisition
Earlier this year Premier Health completed the acquisition of Cloud Practice, a cloud-based SAAS Electronic Medical Records software company, and we believe that this was a transformational acquisition for the business. The company, in conjunction with its subsidiary Cloud Practice, is developing proprietary technology to deliver quality healthcare through the combination of connected primary care clinics with telemedicine and artificial intelligence (AI). They currently have a combined ecosystem of 290 clinics, over 3000 licensed practitioners and almost 3 million registered patients and have plans to rapidly increase those numbers both domestically and internationally.
One of the reasons why we are favorable on this acquisition is because we expect it to be immediately accretive to Premier Health. Cloud Practice generates significant cash flow and offers a suite of solutions that include Juno EMR, a cloud based EMR solution; ClinicAid, a medical billing software; and MyHealthAccess, an online patient portal. Cloud Practice already has a significant platform and it processes upwards of $30 million in payments to 3,000+ healthcare providers on a monthly basis.
The acquisition of Cloud Practice was significant, and we will monitor how long it takes integrate the businesses. One of the reasons why we expect the integration process to be relatively seamless is due to Premier Health bringing on Cloud Practice’s founders, including CEO Jordan Visco, and the entire support team to work alongside the Premier Health team. We believe that this is an important part of the process and expect it to help when it comes to finding synergies between the businesses.
An Opportunity that is Flying Under the Radar
Although we believe that Premier Health has reported several significant developments so far this year, the shares been under considerable pressure and have been trending lower. When looking at the Premier Health story, there is a lot to be excited about and we believe that the company has significant catalysts for growth.
Earlier this year, Premier Health announced a partnership with a major online healthcare company in China, 360 Health, which will help facilitate the company’s growth overseas and is a major part of its international expansion strategy. China represents the largest market for Telemedicine and the country has started adopting a family primary care practice model. This has created a significant opportunity for Premier Health and will monitor how the team executes on it.
During the last month, Premier Health has recorded a strong decline, and this is an opportunity to monitor. To learn more about the emerging healthcare cannabis technology company, please send an email to email@example.com.
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