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VIDEO: Aleafia Health Inc (CVE:ALEF) Expansion on Track

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Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.

Investing in emerging public companies involves a high degree of risk and investors in such companies could lose all their money. Always consult a duly accredited investment professional in your jurisdiction prior to making any investment decision.

Midas Letter occasionally accepts fees for advertising and sponsorship from public companies featured on this site. James West and/or Midas Letter may also receive compensation from companies affiliated with companies featured on this site. James West and/or Midas Letter also invests in companies on this site and so readers should view all information on this site as biased.

Aleafia Health Inc (CVE:ALEF) (OTCMKTS:ALEAF) (FRA:ARAH) CEO Geoffrey Benic shares details about the company’s 22 cannabis medical clinics, which serve 50,000 patients. Aleafia also trains doctors to prescribe cannabis. The company undertook a financing round in May at $1.25, raising $28 million, and currently has $20 million left after the acquisition of its Grimsby facility. The company’s expansion plans are on track as it retrofits the Grimsby facility and complement Aleafia’s existing infrastructure in Scugog, Ontario. Aleafia is currently generating revenue from its clinics and has no debt, making the company an attractive investment opportunity.

Transcript

Ed Milewski:  Hello, everyone. Today we have Geoff Benic, Aleafia Health, and Geoff and I are going to talk about what’s transpired with this company since, by the way, James West interviewed Julian a few months ago. So maybe give us an idea of what’s gone on – and I understand you’ve been there about three months?

Geoffrey Benic:    Yeah, so I took the reins of the company as CEO July 3rd.

Ed Milewski:  July 3rd. What was the stock then?

Geoffrey Benic:    Stock was somewhere around $0.60.

Ed Milewski:  What is it today?

Geoffrey Benic:    I think we’re getting close to $2.00 today.

Ed Milewski:  Have you taken all the credit?

Geoffrey Benic:    You know, a team effort, right? I’m a hockey player, so everything is a team effort.

Ed Milewski:  No “I” in team, right?

Geoffrey Benic:    No “I” in team.

Ed Milewski:  Good for you. Good for you, Geoff. So tell me, what’s your background?

Geoffrey Benic:    So my background is, I’ve been a serial entrepreneur, and, you know, started off as a hockey player playing junior hockey, Memorial Cup –

Ed Milewski:  Really?

Geoffrey Benic:    Yeah. Drafted by the Blackhawks –

Ed Milewski:  Yeah, you look pretty solid.

Geoffrey Benic:    Not as solid as I used to be, but still a team player, right? After that, you know, started business in logistics. I’ve been a serial entrepreneur in logistics. I was involved in a company very early called Grocery Gateway; it’s still around today. A couple software companies, but primarily all logistics and –

Ed Milewski:  So you’ve been with this company three months, and what distinguishes Aleafia? I see Health in the name, so obviously, you’re looking at it from the medical side, mainly, is that – ?

Geoffrey Benic:    Yeah, I think it’s one of our key differentiators is that, you know, we have 22 medical cannabis clinics coast-to-coast.

Ed Milewski:  22?

Geoffrey Benic:    Twenty-two, and we have 50,000 patients. 50,000 loyal patients.

Ed Milewski:  Really? And over what – how long did it take you to put that together?

Geoffrey Benic:    So Aleafia is a combination of a rollup that we did buying a company called Canabo Clinics, and since then, still operating them as Canabo Clinics, but it was through an acquisition.

Ed Milewski:  Canabo?

Geoffrey Benic:    Yes, Canabo Clinics.

Ed Milewski:  So I think – no, I knew a little bit about Canabo. I think, now, was there a fellow – was Wade Dawe involved in Canabo?

Geoffrey Benic:    Yeah, that sounds familiar. I wasn’t in on that at the time, but –

Ed Milewski:  I think, I think that makes sense, yeah, yeah, sure. Yeah. So you said 22, right?

Geoffrey Benic:    That’s correct.

Ed Milewski:  And are you continuing to add clinics, or are you –

Geoffrey Benic:    Yeah, so we’re continually looking at strategic opportunities to add. We really like the space. We understand how to manage clinics; we manage them very, very well. We know how to give patients great care, and we also know how to train doctors on how to prescribe cannabis.

Ed Milewski:  Sure. So tell me, when the last financing you did, what price was that done at?

Geoffrey Benic:    So that was done at $1.25.

Ed Milewski:  And when was that done?

Geoffrey Benic:    That was done back in May of 2018.

Ed Milewski:  Okay, and how much money did you raise back then?

Geoffrey Benic:    It was $28 million, when it was all said and done.

Ed Milewski:  And how much money are you sitting with right now in the treasury?

Geoffrey Benic:    So right now in the treasury we still have north of $20 million. That includes the acquisition of our facility in Grimsby that’s fully paid; we have no debt, and still have about $20 million of cash on the balance sheet.

Ed Milewski:  Right, right, right, right, right. And what’s your – is your year end a calendar year-end?

Geoffrey Benic:    Yeah, our year-end is a calendar year-end, and –

Ed Milewski:  So are these clinics generating some good cash flow?

Geoffrey Benic:    Yeah, so if you look at our financials, we’re generating cash. We’re making money, and we’re going to continue doing it.

Ed Milewski:  Good. That’s so important, because if you can differentiate yourself by generating cash and making money, you’re doing something a lot of the competition isn’t doing right now.

Geoffrey Benic:    Yeah, and I think our story keeps getting better. As you know, we are fully integrated vertically, and we’re going to start growing.

Ed Milewski:  So – you are going to grow?

Geoffrey Benic:    Yeah, yeah.

Ed Milewski:  And have you picked out some places for that?

Geoffrey Benic:    So we have two facilities right now that are fully funded. We have one in Niagara, which is our new one; it’s 160,000 square feet, it’s a modern facility, Dutch hybrid, with a conveyor table system, and it’s going to be state of the art. We’re well into the retrofit of it right now, and it’s going to come online in November. That’s going to produce about 38,000 kilograms of top quality medicine for our patients.

Ed Milewski:  Right, right.

Geoffrey Benic:    The other one we have is in Scugog, Port Perry. It’s 7,000 square feet; small, but fully functional, cultivating, and we just received our sales license and we are just completing our second harvest, and the results on our second harvest are off the charts.

Ed Milewski:  It sounds like you got your balance sheet in pretty good order, right? So you have no debt, you’ve got lots of cash, and you’re generating cash. Yeah, that’s refreshing.

Geoffrey Benic:    And we got an 18 million warrant call coming in now. It’s been triggered; we’re starting to get a lot of our –

Ed Milewski:  And what price are those warrants at?

Geoffrey Benic:    At $1.75.

Ed Milewski:  And I may have asked you this, but how many shares in the company?

Geoffrey Benic:    135 million fully diluted. So we’ve got a nice capital structure.

Ed Milewski:  Yeah. Yeah. And tell me: how much does management – do you have an idea of how many shares is represented in terms of management ownership?

Geoffrey Benic:    So management ownership is in for about 17 to 18 percent of it. So we’re vested, we’re committed, and you know, our upside will be really based on the success of this business, so we’re totally committed.

Ed Milewski:  Right, right, right. Now, does your Board have – I think I recall when Canabo was public, I’m pretty sure there was quite a few medical people on the Board. Is that still the case?

Geoffrey Benic:    Yeah, we still have Dr. Mike Verbora – he’s our medical director. He’s, you know, pound for pound, probably one of the best cannabis doctors in Canada. He’s always in some kind of speaking engagements and/or some think tank. He truly is a leading physician in the space.

Ed Milewski:  Yeah, and now, I just – I’m kind of, even though I’m not new to marijuana personally, I’ve learning that there’s quite a big difference between THC and CBD, and, you know, one’s more sort of the buzz thing and one’s more the benefits to the body, and so, did you guys, in your business, are you one way or the other, or is it -?

Geoffrey Benic:    So we’re doing both. A lot of our patients have chronic pain, so it requires a certain THC levels that typically you would not find over the counter through the upcoming recreational market. And then CBD, obviously we treat a lot of our sleep issues as well as some pain and some anxiety and some eating disorders with CBD, and THC as well. We’ve got a great horticulturalist – I’ve just got to tell you, that’s one of our key assets, is a gentleman by the name of Luke Escott, one of the founders of Mettrum that got sold to Canopy. He’s built seven facilities, so this guy is a world-class grower. He’s top-notch, he can grow.

Ed Milewski:  That’s great. Geoff, we’re going to leave it there, and really want you to come back here probably in a month or two or three, and tell us where you’re going and give us an update.

Geoffrey Benic:    Yeah, super excited. You know, we’ve got a lot of great news coming out – you’re probably going to want me on the show.

Ed Milewski:  Absolutely. Thanks, Geoff.

Geoffrey Benic:    Thank you, Ed.

Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.

Investing in emerging public companies involves a high degree of risk and investors in such companies could lose all their money. Always consult a duly accredited investment professional in your jurisdiction prior to making any investment decision.

Midas Letter occasionally accepts fees for advertising and sponsorship from public companies featured on this site. James West and/or Midas Letter may also receive compensation from companies affiliated with companies featured on this site. James West and/or Midas Letter also invests in companies on this site and so readers should view all information on this site as biased.

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