SeeThruEquity Initiates Coverage on WeedMD Inc.

NEW YORK, NY / ACCESSWIRE / August 13, 2018 / SeeThruEquity, a leading independent equity research and corporate access firm focused on smallcap and microcap public companies, today announced it has initiated coverage on WeedMD Inc. (TSX-V: WMD, OTC PINK: WDDMF) with a price target of C$3.50 / $2.70.

The report is available here: WeedMD Initiation Report.

We initiate coverage of WeedMD Inc. (TSX-V: WMD, OTC PINK: WDDMF, FSE: 4WE, "WeedMD") with a price target of C$3.50 / $2.70. Based in Aylmer, Ontario, Canada, WeedMD is a federally licensed producer and distributor of medical cannabis and oils under the Access to Cannabis for Medical Purposes Regulations (ACMPR). WeedMD benefits from a well-established platform of industry-leading genetics, cultivation, and research and development capabilities, as the company pursues a multi-channel distribution strategy for the medical and adult-use recreational markets. With $50mn in net cash on its balance sheet and impressive strategic partner relationships established in both the adult-use and medical cannabis markets, we view WeedMD as positioned to execute on an aggressive growth plan as it seeks to expand production capacity to 50,000 kilograms (kg) by the end of 2019. Moreover, we view WeedMD as undervalued relative to peer companies in the cannabis space, offering the opportunity for value creation if management is able to execute its plan and the enthusiastic sentiment for the cannabis industry holds.

Highlights from the report include:

WeedMD targeting significant growth in production capacity

WeedMD is in the process of significantly expanding its production capacity, which should support sharp revenue growth in coming years. With facilities in Aylmer and Strathroy, Ontario, and $50mn in net cash on its balance sheet the company is fully funded to develop more than 640,000 square feet of indoor and greenhouse production. Management has outlined plans to increase annual production capacity sharply in a three-phased development and retrofit project at its Strathroy facility, which promises to expand annual from 1,500kg in 2017 to reach 20,000kg by the end of 3Q18, more than 32,000kg by the end of 1Q19, and 50,000kg by the end of 2019.

Encouraging opportunities in medical and adult use cannabis

WeedMD is focused on becoming a preferred supplier of medical grade cannabis, and is authorized to cultivate and sell dried flowers, oils and extracts, and live plants under the ACMPR. With Canadian lawmakers approving Bill C-45 to legalize adult-use of cannabis on June 19, 2018, WeedMD is also seeking to become a leading supplier to the recreational market. The company has announced supply contracts covering 3,400 beds in the long term care market, and has secured a supply agreement with Toronto-based Shoppers Drug Mart, Canada's largest retail pharmacy chain with more than 1,253 stores in nine provinces. WeedMD has also had success establishing new business with provincial distributors, as demonstrated by supply agreements with the Alberta Gaming, Liquor, & Cannabis Commission (AGLC) and British Columbia Liquor Distribution Branch (BCLDB).

Initiate coverage with a price target of C$3.50 / $2.70

We initiate coverage of WeedMD with a target of C$3.50 / $2.70. We see the company as an intriguing growth story in the rapidly emerging market for legal cannabis. Upcoming catalysts include the development of its Strathroy facility as the company increases capacity, and financial results we expect to show high growth throughout the balance of 2018 and 2019 as production capacity comes online. The target represents a fully diluted an EV / 2019E revenue multiple of 5.2x 2019E revenues of $77.5mn. We view this as an appropriate discount for an emerging company in a group that trades at 8.7x EV / forward revenues.

Please review important disclosures in the report and on our website at www.seethruequity.com.

About WeedMD Inc.

WeedMD Inc. is the publicly-traded parent company of WeedMD Rx Inc., a federally-licensed producer and distributor of medical cannabis and oils under the Access to Cannabis for Medical Purposes Regulations (ACMPR). The Company operates a 26,000 sq. ft. indoor facility in Aylmer, Ontario, and a second cultivation site at its greenhouse facility located in Strathroy, Ontario, representing 610,000 sq. ft. or 14 acres under glass. WeedMD has entered into supply agreements in addition to strategic relationships with established cannabis brands. WeedMD is focused on providing medical cannabis to the seniors' markets in Canada through its proprietary seniors care program. It is dedicated to educating healthcare practitioners and furthering public understanding of the role that medical cannabis plays - including as it pertains to regulatory requirements, indications and potential side effects.

About SeeThruEquity

Since its founding in 2011, SeeThruEquity has been committed to its core mission: providing impactful, high quality research on underfollowed smallcap and microcap equities. SeeThruEquity has pioneered an innovative approach to deliver equity research of microcap and smallcap companies. SeeThruEquity has also been the host of acclaimed investor conferences that are the ultimate event for publicly traded companies with market capitalizations less than $1 billion since 2012.

SeeThruEquity is approved to contribute its research reports and estimates to Thomson One Analytics (First Call), the leading estimates platform on Wall Street, as well as Capital IQ and FactSet. SeeThruEquity maintains one of the industry's most extensive databases of opt-in institutional and high net worth investors. The firm is headquartered in Midtown Manhattan in New York City.

For more information visit www.seethruequity.com.

Contact:

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SOURCE: SeeThruEquity