In a €2.75 million cash transaction, MedReleaf (TSX:LEAF) has acquired MED Colombia, a company with cannabis cultivation and production licenses in Colombia, the company announced on Wednesday (July 25).
Through the acquisition, MedReleaf can now produce low-cost, high-quality raw materials to serve its global supply chain, along with Colombia’s domestic medical cannabis market. MED Colombia’s license repertoire includes the production of cannabis oil extracts and a library of cannabis genetics.
“As the legalization of medical cannabis continues to expand, we must ensure that our ability to cultivate cost effectively extends beyond Canada to supply our global operations,” CEO of MedReleaf Neil Closner said in a statement.
“Colombia has one of the best climates in the world for cannabis cultivation and excellent regulation to protect the rights of growers and operators. With the acquisition of MED Colombia we continue to execute on our international strategy and will be well positioned to scale our global production as our business continues to grow.”
Colombia legalized medical cannabis in 2015, while MED Colombia received its government license for THC cannabis cultivation, along with its derivatives, in 2017. MedReleaf has had a Colombian team operating in the country since 2017, and with this newest acquisition, can now accelerate plans to establish a licensed cultivation and extraction facility.
In April, MedReleaf announced that it had completed an acquisition agreement for 1 million square feet of existing greenhouse infrastructure on a 69 acre property in Exeter, Ontario, along with 95 acres of adjacent land, for $26 million. Set to be the company’s third Canadian facility, MedReleaf expects its first harvest in 2019’s first quarter.
As of market close on Wednesday, MedReleaf stocks were down 1.83 percent on the TSX to close at C$24.64. TipRanks analysis currently has a “Moderate Buy” ranking based off two analyst ratings for the company’s shares with an average price target of C$34.
The most recent analyst ranking came in June, one from Noel Atkinson from Clarus, who reiterated his “Hold” position in the company, while Vivien Azer from Cowen & Co. reiterated her “Buy” position with a price target of C$34.
Don’t forget to follow us @INN_Cannabis for real-time news updates!
Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.