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Aleafia Health Inc (CVE:ALEF) Graduation to TSX and Emblem Corp (CVE:EMC) Agreement

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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) CFO Benjamin Ferdinand discusses the major upcoming catalysts for the company. Aleafia was recently named top performer on the Venture exchange and is uplisting to the TSX. Ferdinand states that the move provides the company with greater access to institutional investors and builds brand credibility. Aleafia is the leading Canadian medical cannabis and education company and has the largest clinic platform in the country. Ferdinand notes that the acquisition of Emblem Corp (CVE:EMC) (OTCMKTS:EMMBF) (FRA:E0M) helps Aleafia become a sustainable platform and grow its production footprint. Aleafia has the capacity to produce 140 million grams of product and now has the clients, patients, and ecosystem to sell those grams.

Transcript:

Narrator: Aleafia Health, Inc. is a Canadian licensed producer and vendor of cannabis. The company has a planned and fully funded annual production capacity of 98,000 kilograms of dried cannabis flower.

Aleafia operates medical cannabis clinics staffed by physicians and nurse practitioners with over 50,000 patients. In December of 2018, Aleafia Health acquired Emblem Corp. in an all-share transaction valued at approximately 173.2 million.

Aleafia Health Inc. is listed on the TSX Venture under the ticker symbol ALEF.

Howard Glassman:   And our guest is the CFO of Aleafia. I say it slowly so I don’t slur it: Aleafia Health, which is, it’s got to be an exciting day for Benjamin Ferdinand. How are you, sir?

Benjamin Ferdinand: Great to see you.

Howard Glassman:   Nice to see you. Thanks for coming in!

Benjamin Ferdinand: Thank you.

Howard Glassman:   Are you feeling good today? It’s got to be amazing: you’re on the junior exchange, you get listed…talk to us about the process.

Benjamin Ferdinand: Yeah, so it’s been an exciting process for us, and you know, we recently just achieved the top performing company for TSX Venture, so that’s very exciting, and over the last, you know, couple of days, we’ve just announced that we are going to be upgrading to the TSX senior exchange, where it’s an elite company with the cannabis space. So we’re very excited about that, and it shows our track record of execution.

Howard Glassman:   Well, let’s talk a little bit about that for the company. I mean, as you say, you’ve just graduated; we talked about it on the news this week. What is the upside of being on the TSX?

Benjamin Ferdinand: So what it really allows you to do is have access to a lot more institutional investors, which is exciting, and really where you want to get to as our companies mature. And when we get close to the, you know, the billion-dollar range, that’s when we start to be more attractive for those types of investors.

And it also adds to the credibility and shows our track record, so we’re excited.

Howard Glassman:   That kind of leads into my next question, which is, you know, we’ll get into the business model in a moment; what does it mean for shareholders?

Benjamin Ferdinand: Yeah. So from a shareholder perspective, I think it helps to validate the trust that they have in us, and builds the credibility of the brand that we have. So I think it’s really a sign that there’s a lot more to come, and really validates it.

Howard Glassman:   Well, I can ask you a little bit about your company. I mean, you know, this must have been a big day for you guys in the office – you’re celebrating with, did you have, like, cake and things? What is the company, did you have everyone come into the lunchroom and somebody went out for muffins? What is it?

Benjamin Ferdinand: Yeah, so you know, we have, you know, we’re getting to be a larger company, you know, but we still have the, you know, start-up feel and enthusiasm. So we had, there were some high-fives.

Howard Glassman:   Were there?

Benjamin Ferdinand: Yeah.

Howard Glassman:   Benjamin. High-fives?

Benjamin Ferdinand: Backslapping, yeah.

Howard Glassman:   The company, the leading Canadian medical cannabis clinic and education centre network: 60,000 patients to date. Let’s talk a little bit about your company.

Benjamin Ferdinand: Yeah. So what Aleafia Health is focused on is being the leading health and wellness cannabis company globally, and that’s not just about having, you know, products and services; what we’re really building is an ecosystem that’s self-reinforcing, and we do that through four pillars.

You know, one is our product division, which is focused on growing, extraction and high value products such as, you know, gel caps, extraction, you know, and sprays. You know, second is our health and wellness division which, as you mentioned, is the largest clinic platform in Canada, giving us 60,000 patients seen. You know, third is our education platform, which allows us to teach not only consumers but also doctors and large firms.

Howard Glassman:   Well, let’s just step in there with doctors, because that really is, for a company like yours that’s doing what you do, educating the public is one thing; but also gaining the trust of clinicians is a whole other aspect.

Benjamin Ferdinand: Yeah.

Howard Glassman:   Because, you know, I spoke about this earlier this week with somebody, and I said, you know, a couple of years ago I went to my doctor and the Ontario Medical Association really didn’t want to, you know, deal with this until there was a lot more research. And companies like yours, I mean, I guess that’s part of the education process.

Benjamin Ferdinand: Exactly, and one of our key business model differentiators is working very closely with doctors. And to do that, you need the credibility that we’re able to bring, and part of that is actually educating general practitioners as you’ve highlighted, and becoming a thought leader in the space with some of our research that’s come out around, you know, how cannabis can help getting off of addictive sedatives as well as cannabis in the workplace, which is coming out as well.

Howard Glassman:   Well, that really is something that I’ve done a lot of reading into about, you know, how there are so many products, so many cannabis-related, you know, modalities, if you will, that are looking to replace some harmful pharma- you know, chemical solutions to problems that, you know, doctors and people have been looking at for years. And a company like yours, as you say, a thought leader in educating not only the public, but the medical people as well.

Benjamin Ferdinand: Yeah. And you hit the nail right on the head. We view ourselves really as cannabis, or sorry, really as opioid crusaders, where we’re focused on getting people, you know, away from addictive substances, and actually helping, you know, benefit their lives. And so I think this is all in the same vein.

Howard Glassman:   Well, you know, I love hearing people like you talk about that, because there really is, I know there was a lot of giggling that went on, oh, cannabis is going to be legal, weed’s going to be legal in Canada, and I think the initial bloom was, Oh, great, we can all get high! And as I’ve said a ton of times, people were already getting high; it’s the access to the sort of therapeutic use. I don’t think people considered that when the announcement was made a few years ago.

Benjamin Ferdinand: You’re completely right. Our core is focused on health and wellness, and our target market, our average user, is, you know, is the Baby Boomer. So these are people who are, you know, generally well off, but are using some things that aren’t good for themselves, right, such as opioids. And what we allow them to do is actually use cannabis to help better their lifestyle.

Howard Glassman:   Well, you know, I was just talking about with Ed a second ago about, you know, having trouble sleeping. As you age, you know, it’s a fact that sleep is tougher to attain, and I love the fact you’re doing sprays and capsules and replacing, you know, sleep medication with the person who knows the right dosage.

Before I let you go, I want to talk about the, you approved a takeover of Emblem.

Benjamin Ferdinand: That’s right.

Howard Glassman:   Let’s talk about your takeover and what was the reason, what it means to production capacity, all those sort of business things, let’s talk about them.

Benjamin Ferdinand: Yeah, so we’re really excited. So our Emblem transaction, as you alluded to, will be closing next week, and what it’s really allowed us to do is really build up our ecosystem. So now we’re able to have our production of cannabis as well as having what Emblem really brought, is extraction and product development and distribution, and allowing that to complete our ecosystem with our medical based patients. So, it really helped to create a sustainable, defendable platform. It’s going to be difficult for our competitors to replicate, and really helps us give our consumers what they want, when they want it.

Howard Glassman:   So that takes care of that question. Will this affect the share price?

Benjamin Ferdinand: Yeah. So as I say, I can’t give forward guidance, but what we’re –

Howard Glassman:   No, of course – I love that, that’s such a great name: Forward guidance is a way for you to say, I can’t tell ya.

Benjamin Ferdinand: No, but what we can say is we’re really excited about the ecosystem that we’ve built. It’s very defendable; we’re going to have close to 140 million grams of production at the run rate, as well as the clients and patients in the ecosystem to actually sell those products through. So it’s a very unique business model, and we’re really excited about it.

Howard Glassman:   Good for you. What about some other partnerships outside of Canada?

Benjamin Ferdinand: Yeah, so we’re focused again, globally. As you alluded to, we’ve got a partnership with CannaPacific, which is an Australian-based licensed producer, and we’re looking at others as well, whether it be Germany, Europe, or other areas globally. But really, exporting our ecosystem globally.

Howard Glassman:   Well, listen: Benjamin Ferdinand, the CFO of Aleafia – see, I get it now – Aleafia Health. Congratulations on all your success you got.

Benjamin Ferdinand: Thank you.

Howard Glassman:   You graduated to the big Exchange, you were also, as you said off the top, recognized – what was that designation, the award you –

Benjamin Ferdinand: Yeah, so Company of the Year for TSX Venture 50.

Howard Glassman:   Company of the Year! Now, what was the criteria for that?

Benjamin Ferdinand: So it was a combination of largely share price and market cap.

Howard Glassman:   Was there a talent portion of that pageant, was there?

Benjamin Ferdinand: No, but you’d like to think talent had something to do with it, but it was really all based on numbers.

Howard Glassman:   Well, I hope you’ve enjoyed your time here today.

Benjamin Ferdinand: Yeah, this is fantastic. We really appreciate it.

Howard Glassman:   All the best to you, and congratulations.

Benjamin Ferdinand: Thank you.

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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