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Why Aleafia Health Inc (OTCMKTS:ALEAF) Is A Buy

Why Aleafia Health Inc (OTCMKTS:ALEAF) Is A Buy
Written by
Jim Bloom
Published on
January 29, 2019
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Aleafia Health Inc (OTCMKTS:ALEAF) is a potential break out play, after a steep pullback from record highs, registered in the second half of last year. The stock is already up by 50% as it continues to recoup losses accrued over the past few months.

Aleafia Health Price Analysis

The rally comes on the company reiterating its commitment to using its Intellectual Property and leading cannabis data, to advance patient care through medical cannabis. Renewed investor interest in the stock also follows the announcement of a strategic investment in CannaPacific Pty as part of the company’s global expansion drive.Aleafia Health has also strengthened its growth prospects in the cannabis sector with the acquisition of Emblem Corp. The company is also fresh from completing its first transaction under a supply agreement with CannTrust. Completion of Phase 1 construction and retrofitting of the company’s greenhouse located in Grimsby is another development that continues to excite investors.Improvement in operational efficiency, as well as underlying fundamentals, explains the stock’s recent resurgence. The stock has already breached a critical resistance level, opening the door for a potential bounce back to 52-week highs. ALEAF Daily ChartAfter the recent spike higher, Aleafia Health is staring at a critical resistance level at the $2 a share level. A breach of the resistance level should open the door for the stock to make a run for $3.62, which happens to be 52-week highs.On the downside, the $1 a share level appears to be the immediate support level, below which the stock could face increased short selling pressure.

About Aleafia Health

Aleafia Health casts itself as a vertically integrated cannabis company that also operates as a medical cannabis clinic. The company provides consulting services for determining the suitability of medical cannabis in the treatment of various ailments. In addition, it is a licensed producer and vendor of cannabis.

Expansion Drive

Aleafia Health is a potential bounce-back play after a steep pullback, on improving fundamentals. Investors’ confidence in the stock has continued to surge in recent weeks, on the company reaffirming its growth prospects in the multi-billion industry.The company has already set foot in the Australia cannabis industry, with an investment in CannaPacific Pty Limited. The investment marks the company’s first step towards a broader global expansion in pursuit of opportunities for growth.Under the terms of the agreement, Aleafia is to assist CannaPacific in the establishment of medical cannabis clinics. It will also play a pivotal role in the supply of medical cannabis, as the company is one of the biggest cultivators of cannabis. Aleafia Health cannabis product capacity that can clock highs of 98,000 kilograms in peak annual output should also receive a boost of 40,000 kilograms from Emblem.

“This transaction will place Aleafia at the epicenter of what we expect will be a major growth center in the global medical cannabis market. Aleafia will soon boast global distribution networks in Germany (upon completion of the Emblem acquisition) and Australia, complementing our cannabis cultivation, clinics and adult-use retail in Canada,” said Aleafia CEO Geoffrey Benic.

Emblem Acquisition

In addition, Aleafia Health is in the process of completing the acquisition of Emblem Corp. The merger will pave the way for Aleafia’s Canabo and Emblem’s GrowWise Health to join forces in serving over 60,000 patients with medical cannabis.Emblem also comes into the deal with a number of supply agreements in Ontario, Alberta and British Columbia that will be of great value to Aleafia. The company also stands to leverage Emblem’s supply network, to reach more consumers with its products.Aleafia Health has already completed its first Transaction under cannabis supply agreement having sold two cannabis crops to CannTrust Holdings. The sell is the first transaction as part of a previously announced 15,000 kg cannabis supply agreement.The company has also confirmed the completion of Phase 1 construction of its Niagara Greenhouse facility in Grimsby Ontario. Phase II should be complete in the second quarter paving the way for the company to strengthen its cannabis production capacity.

Bottom Line

Aleafia Health is in the best shape it could ever be when it comes to operational efficiency and long-term prospects. The company is firing on all cylinders as it continues to strengthen its empire in the cannabis sector. Expansion into Australia, as well as the acquisition of Emblem, attests to the company’s growth metrics.That said Aleafia Health is an attractive investment, after the recent pullback, as underlying fundamentals support further movements on the upside.We will be updating our subscribers as soon as we know more. For the latest updates on ALEAF, sign up below!Disclosure: We have no position in ALEAF and have not been compensated for this article.

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