Ontario-based Aleafia Health is a licensed producer of medical and rec cannabis, a provider of direct-to-consumer cannabis delivery and the largest provider of cannabis health services in the country.
In his report, Sarugaser commented on a flurry of recent announcements from Aleafia, starting on June 3 with the company’s first medical cannabis export to Germany.
On the Divvy launch, Sarugaser said AH’s low-cost cultivation at its Niagara greenhouse and Port Perry outdoor grow should give the company a material cost-of-goods-sold advantage relative to most of its peers in the value segment of the cannabis market.
“Through the tremendous diligence and hard work of our operations team, we are poised to take another major step forward this year in outdoor cultivation.
Sarugaser said all of the above events help demonstrate how Aleafia is making progress toward its strategic targets.
On the medical services front, Sarugaser said he expects to see small contributions during the current second quarter from the company’s exclusive agreement with Unifor, with business ramping up over the second half of the year.
“AH’s positive adult-use sales data, combined with its typically large, seasonal LP-to-LP sales yielded from outdoor harvests, combined with its steadily ramping Canadian medical cannabis revenues, combined with solid progress with international medical cannabis exports, makes us optimistic about AH’s stock during the quarters to come.
Aleafia last reported its financials in mid-May, where a drop in the company’s domestic wholesale business saw overall revenue fall from $13.7 million a year ago to $6.2 million for the first quarter 2021.
“The ability to service a captive audience of union members who receive insurance coverage for medical cannabis is an important catalyst.
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