MDCL : Medicine Man Technologies Stock Analysis and Research Report

2017-11-14 - by Asif , Contributing Analyst - 191 views

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Medicine Man Technologies was incorporated on March 20, 2014, in the State of Nevada. On May 1, 2014, the company entered into an exclusive Technology License Agreement with Medicine Man Denver, Inc., f/k/a Medicine Man Production Corporation, a Colorado corporation (“Medicine Man Denver”) whereby Medicine Man Denver granted it a license to use all of their proprietary processes they have developed, implemented and practiced at its cannabis facilities relating to the commercial growth, cultivation, marketing and distribution of medical marijuana and recreational marijuana pursuant to relevant state laws and the right to use and to license such information, including trade secrets, skills and experience (present and future) (the “Medicine Man Denver License Agreement”).

The company commenced its business on May 1, 2014 and currently generate revenues derived from licensing agreements with cannabis related entities, as well as sponsoring seminars offered to the cannabis industry and other business endeavors related to its core competencies. As of the date of this report Medicine Man Technologies has or have had 45 fee generating clients in 14 different states. Cultivation MAX update: The Company as previously announced began an engagement with two Nevada based cultivators, each having approximately 500 revenue generating lamps that should begin to produce revenues for the Company in its 4th quarter of FY 2017. The Company has several new Cultivation MAX clients in California and Colorado that should become operational during the 1st and 2nd quarters of FY 2018.

Medicine Man Technologies is a cannabis consulting company providing services related to cost efficient cannabis cultivation technologies focusing on quality as well as safety, retail operations related to the delivery of cannabis related products, and other related business lines as described in its operating strategic vision.

Medicine Man Technologies has never been subject to any bankruptcy proceeding.

Current Business Groupings

As the company evolve its various business lines and branding strategies Medicine Man Technologies is working to align its service offerings and earned income into logical groupings. Medicine Man Technologies has aligned them into three business units that will allow its potential clients and investors a better understanding of both its current and future operations. The specifics of these newly established groups are as follows:

Private Consultation Services; Education, Design, Business Plan, and New State Initiatives (Group 1)

In prior years, Medicine Man Technologies has generated revenues from its consulting activities, as well as seminars Medicine Man Technologies has conducted for prospective clients interested in entering the cannabis industry. During 2016, the company began to limit these seminars and devote its resources to what the company consider to be higher upside activities, including private consultation services and related matters. The company expect these services to augment its existing seminar offerings and over time replace most of its local seminar offerings. Following is a description of these new services.

Two Hour Private Consulting Package

This package is designed for individuals and business owners that are interested in becoming involved in the cannabis industry but need more guidance and personal consultation when working to advance their own goals and industry knowledge to increase their chances of success in this industry. The 2-Hour Private Consultation Package includes a private one-on-one consultation with its consulting staff and/or ownership, as well as a private full tour of a medical and adult use dispensary operation and a 40,000 square foot cultivation facility owned by Medicine Man Denver.

This package sets the foundation for groups considering entering the cannabis space by providing real world examples of projects and cannabis industry marketplaces in which Medicine Man Technologies has worked. The Two-Hour Private Consultation is also the main entry point for clients considering its services to have the opportunity to sit down with its team and learn more about its licensing services. Consultation fees collected are credited back to clients who proceed with its full licensing packages.

This package is recommended for individuals and business owners that need more guidance and personal consultation when working to advance their own goals in the cannabis industry and to increase their business’s success.

Three Hour (Plus) Private Consulting Package

Operating in the emerging cannabis industry requires experienced partners who can help clients avoid costly mistakes. The company's team of professional consultants help clients navigate the process of becoming successful cannabis operators. Using its personal experience, expertise and proven methods, the company believe clients will avoid many of the costly pitfalls of entering and operating in the space while maximizing their return on investment.

The Three Hour Private Consultation Package includes a private one-on-one consultation with its consulting staff and/or ownership, a private full tour of Medicine Man Denver’s medical and adult use dispensary operations and 40,000 square foot cultivation facility, a tour of the Three-A-Light facility, a basic pro forma to aid in clients financial modeling, a copy of the Three-A-Light cultivation manual written by Josh Haupt (a $500 value), and a Success Nutrients Starter Kit (a $320 Value).

This package is recommended for individuals and business owners who:

  • Are current cannabis cultivators but are not producing the yields and consistency they could be and are in need of guidance from its senior consultants and lead cultivation staff members on how to improve their performance and efficiencies.
  • Entrepreneurs who are interested in the cannabis industry and have the capital, connections and passion to become operators in the cannabis space but do not have intimate knowledge about the industry and need guidance in a number of areas in order to complete the state licensure process. The company provide these client groups with high level guidance as it pertains to such things as complex state application processes, facility design, financial modeling, security, cultivation methodologies, pesticide and nutrient management plans, dispensary operations, inventory management, packaging and labeling and much more.

The company also offer customized consulting services on an ad-hoc project basis that may include any or all elements as identified herein.

Seminar Offering Services

The company offer seminars in emerging markets at its facilities in Denver, CO. The crash course seminars are designed to educate participants about the requirements associated with becoming licensed operators in their own geographic market, and include guidance and tips on navigating:

  • Industry opportunities
  • Medical and Recreational Market Trends
  • Cultivation Methodologies and Technology
  • Processing Methodologies and Technology
  • Extraction Technology
  • Dispensary Operations
  • Operating Pros and Cons
  • Security Requirements
  • Banking, Tax, and Finance
  • Real Estate Planning and Tips
  • License Application Planning and Tips
  • Advocacy, Outreach and Lobbying

The Denver-based seminars end with a tour of Medicine Man Denver’s cultivation and dispensary facilities, allowing participants to get a first-hand view of a fully compliant medical and recreational cultivation and dispensary operation.

Medicine Man Technologies has been asked to provide key support and informational segments for the MJ Business ‘Crash Course’ to be held in Washington DC in May 2017 and are expected to be providing such seminar support in various states this year. Medicine Man Technologies has already scheduled specialty seminars in North Carolina, Pennsylvania, and Michigan during 2017 and expect to add additional events throughout the year.

Facility Design and Financial Modeling Services

Facility Design

The company's personnel have an aggregate of 46 years’ experience designing indoor, greenhouse and hybrid growing facilities as well as retail dispensaries. The company's design team consists of an architect and a contracting firm that have a wealth of knowledge in the medical and recreational cannabis cultivation and retail space; having designed and constructed numerous facilities throughout the state of Colorado and other markets. The company's team will collaborate with a client’s local architect and general contractor to develop an optimal design and construction plan that will meet all IBC and zoning codes while supporting the Variable Capacity Continuous Harvest model. The company's team will provide all blue prints, lighting, tables, shelving specs and any other pertinent intellectual property, developed and refined by Medicine Man Denver.

Medicine Man Technologies has experience in supporting multiple facility layouts and deployments, including both existing and new buildings. Medicine Man Technologies has worked through both deployments and have extensive knowledge within industrial building environments. Based upon this experience the company believe its documented designs and floor plans will ensure that a client’s facility will operate at maximum efficiency from day one, avoiding the multitude of costly mistakes made by many cannabis startups.

Financial Modeling

The company help clients with financial modeling and pro forma financial statement development. This is a critical activity for every cannabis business irrespective of its age and size. For new enterprises, especially in the cannabis industry, the preparation of financial projections is integral to the business planning process.

Financial models are used to compile forecasts and budgets; to assess possible funding requirements; and to explore the likely financial consequences of alternative funding, marketing or operational strategies. They can also be used for business planning, raising finance, investment or funding appraisals, financial analysis, corporate planning etc. Used effectively, a financial model can help prevent major planning errors; identify or evaluate opportunities; attract external funding; provide strategic guidance; evaluate financial and development options and monitor progress.

New State Application Process Support Services (Template Support Based)

The company's primary objective is to help clients deliver a positive customer experience with the utmost attention to product, public, and patient safety. The company educate its clients on how to produce the highest quality products with the lowest cost of production, delivered to customers with great customer service on a consistent and safe basis. Through basic application support guidance elements the company support its client’s efforts in pursuit of state-issued operating license. The company's team provides a cultivation and/or dispensary elements as needed to demonstrate sufficiency within an application.

Medicine Man Technologies has experience working within both competitive and non-competitive application environments. Medicine Man Technologies has navigated the application process in several states, including: Colorado, Nevada, Illinois, New York, Maryland, Hawaii, Pennsylvania and Puerto Rico. As each state handles the process differently, the company believe the company bring a wealth of knowledge and experience in working through an application. The company engage in an "on the ground" approach – ensuring clients receive support when it matters most. As a result, its clients have successfully filed winning cultivation and dispensary applications across several states.

Once a client has secured its state-issued operating license, the company support their efforts to become fully operational through the licensing of its proprietary cultivation and dispensary methodologies on an as needed basis. The company's team of seasoned consultants helps applicants navigate the process of pursuing state licensure and becoming a successful cannabis operation.

This service offering is generally provided as an ‘assembly needed’ product wherein the company provide basic guidance elements for a particular state’s deployment initiative that can then be incorporated in to an application process.

Licensing Services (Full Service)

Through its licensing services the company support a client’s efforts within a competitive or non-competitive state application process with the goal of securing a state-issued operating license. Once licensed, the company help clients deploy state of the art facilities, train staff, implement standard operating procedures, and become operational.

Entities applying for medical and recreational operating licenses will have to demonstrate their ability to provide patient, product, and public safety while also maximizing their productivity to meet the forthcoming demand with high-quality, consistent products. As a result of the Pono and Success Nutrient acquisitions discussed above the company now estimate that its cultivation processes have increased the per light productivity to an average of 3 pounds of dried, cured flower per 1,000W fixture. While this is applicable to the entire cannabis industry, the company believe this is particularly invaluable in states which impose limits on canopy size or plant counts, or in instances in which operators have a limited space to cultivate. The company treat cultivation like manufacturing, with the underlying principal that control of inputs, process, environment, and climate will yield consistent output, enabled by its supporting process.

With the licensing services included throughout the pre-application process clients are provided with the following:

  • Real estate sufficiency reviews and planning.
  • Facility design plans that client design build team can utilize in the creation of architectural and construction plans.
  • Pro forma for financial modeling.
  • Facility equipment list.
  • Organizational charts and job description information.
  • List of preferred third party vendors for consideration.
  • Application checklist once the final rules are published.
  • Narrative of a company’s operating plans for use in demonstrating qualification for state licensure.

With licensing services included throughout the post-application process clients are provided with:

Facility shop drawings (tables, racks, lighting systems, etc.). Standard Operating Procedures. Further design and deployment support related to facility construction. On-site training within its Denver-based facilities. On-site training at their facilities once operational. On-going support for a period of five years including the ongoing dissemination of process improvements or adjustments to standard operating procedures.

Clients who successfully achieve state licensure may also engage it for managed facility support. This offering provides a turn-key solution for new operators, inclusive of support with pursuit of licensure, design and deployment of their facility, and ongoing management of the facility for a defined period.

Three-A-Light Publication (Home Version)

Pono was incorporated in the State of Colorado on February 16, 2015. It is the holder of all intellectual property rights relating to the cannabis cultivation of full scale commercial grow operations utilized and proposed to be utilized by its current and future clients. No patents have been filed to protect the various methods and expertise utilized for these commercial grows due to the federal prohibition on cannabis.

“Three-A-Light” is a tutorial for how to grow cannabis plants for the individual grower growing for his own benefit or caregiver growing for their patients in a limited way. The book is currently offered on Amazon at a price of $500 per copy. To date, approximately 1,100 books have been sold.

There are key differences between growing cannabis indoors and outdoors. While outdoor crops can yield more on a gross per plant basis, the quality of indoor cannabis cannot be matched and generally commands a premium price over indoor as well as greenhouse grown cannabis. This book teaches the secrets of getting the greatest yield without sacrificing quality and includes a step-by-step marijuana growing guide from seed to finished flower. It provides a simple approach to a painstaking and complex process. It contains illustrations on how to grow cannabis and covers the nine vital components of growing marijuana indoors in order to achieve the highest average yield per light.

The sale of “Three A Light” books advances the use of its cultivation techniques and its proprietary nutrients; provides brand exposure; and leads to potentially significant new service provider relationships.

It should be noted that its Three A Light Version is only made available to licensed or operational clients utilizing full cultivation support (Cultivation MAX).

As the company continue to grow, amassing additional experience and knowledge (similar to its recent substantial gains in as represented by Three A Light and Success Nutrients), the company believe the company will continue to enjoy a competitive advantage within the industry over any other business providing a group of service offerings similar to its own. There are no assurances that this will happen.

As with its latest new product, Cultivation MAX Medicine Man Technologies is now working with existing underperforming cultivation facility ownership groups wherein the company provide access to its advanced knowledge and proprietary nutrients wherein Medicine Man Technologies is only compensated on the delta achieved over their existing performance (generally less than 1.5 pounds a light or 350 grams of dried cured flower per square foot of flower canopy) while also guaranteeing through payment reduction that their existing cost per pound to cultivate will not increase.

Medicine Man Technologies has demonstrated its commitment to excellence through continuous process improvement and readily learning from others (through acquisition and or cooperation). The company believe this not only differentiates it in the marketplace, but will allow it to continue to substantially expand its client base and revenues. There are no assurances this will occur.

Existing Cultivation and Dispensary Operation (Group 2)

Cultivation Max Services

As the legal cannabis marketplace evolves and the price of products stabilizes there is an increasing need to control the cost of production and maximize a cultivation facility’s performance. Through its Cultivation Max services, its objective is to optimize an existing cultivation operator’s existing facilities to improve yield, consistency, quality, and efficiency in order to maximize its full production potential. The service is designed to enable existing operators to become highly efficient cultivators, allowing them to continually compete in a highly competitive landscape. Through the implementation of its proprietary cultivation methodology, facility and room design, plant and nutrient management the company believe the company can significantly improve existing performance within a client’s facility. The company understand the uniqueness of existing facilities and the company customize the approach to each project to meet its objective of mutually beneficial results.

Because the company believe its customized approach will provide greater product yields Medicine Man Technologies has structured its pricing model to provide it to earn revenue based on the delta of performance improvement beyond the baseline performance documented at the beginning of the engagement. The term of a Cultivation Max agreement as well as the percentage of revenue is determined on a per project basis. However, in the event Medicine Man Technologies is unable to increase production to the degree the company believe the company can, it is possible its costs of operations will increase and the company will not generate the revenues to cover its costs of operations. To date, this has not occurred.

Based upon its experiences to date and as an example of this performance delta over existing indoor as well as greenhouse based performance, it is generally known that existing indoor cultivation practices are considered best practices when achieving two (2) pounds per light in terms of dried cured flower per harvest cycle or approximately one (1) gram per watt. This is based upon five (5) to six (6) harvest cycles per year. A greenhouse will likely mimic this level of performance but generally may achieve fewer harvests per year. According to a recent MJardin Study (as included in the ArcView 2015 Annual Industry Report), average yields in terms of grams per square foot of flower canopy range between 168 and 282 grams annually. Current performance for the Three-A-Light Professional cultivation practice have generated approximately 700 grams per square foot of dried cured flower per square foot of flower space annually (based upon 5.5 harvests per year utilizing a thirty-two square (32) foot table supporting eight (8) plants that yields approximately nine (9) pounds per harvest or 5.5 times nine (9) pounds times 453 grams per pound divided by thirty-two (32) square feet or a total of approximately 700 grams per square foot per annual period) which the company believe represents a substantial competitive advantage to its clients. However, while Medicine Man Technologies is optimistic that future results will there are no guarantees that the company will continue to generate the production described herein from its cultivation techniques.

This level of superior performance is based upon a proven cultivation practice that includes a very specific feeding and integrated pest management system that is hand managed and does not (at this time) have any reliance on automated technology since the overall operating cost per pound of dried cured flower more than offsets the use of additional labor. These results are based upon use of 1,000 watt double ended lamps that are substantially more efficient than this use of other lower operating cost lamps of an LED or other nature that can be three to four times more expensive from a capital deployment perspective.

Managed Facility Services

As Medicine Man Technologies has grown the volume of requests from clients and prospective clients for full facility management has increased. As a result, Medicine Man Technologies has structured a service offering to include organizational setup and interim management of client’s cultivation, processing, and dispensary facility(s). As part of the managed facilities services, the company may provide the following:

  1. Oversee the hiring and training of the primary facility General Manager. This General Manager will oversee the hiring and training of market-based Cultivation Manager, Production Manager, and Dispensary Manager, as necessary, who may all train on-site in Colorado while client facilities are under construction.
  2. Provide organizational charts and job descriptions to aid client management team in hiring within their local market.
  3. If desired, embed a Senior Cultivation Team Member within the client’s facility for a defined period of time, beginning at a time mutually determined between it and the client. Upon completion of the service agreement, opportunity for full-time employment is typically made available to client.
  4. If desired, embed a Senior Processing Team Member within the client’s facility for a defined period of time, beginning at a time mutually determined between it and the client. Upon completion of the service agreement, opportunity for full-time employment is typically made available to client.
  5. If desired, embed a Senior Dispensary Team Member within the client’s facility for a defined period of time, beginning at a time mutually determined between it and the client. Upon completion of the service agreement, opportunity for full-time employment is typically made available to client.
  6. All costs for the above services to be covered by the client including time and expense.

Revenue for managed services is derived on a fee basis for ongoing support and also incentivized by production metrics tied to overall facility performance. These services are typically provided through a custom assessment and bidding process.

Nutrient Products (Group 3)

Success Nutrients

Success Nutrients was incorporated in Colorado on May 5, 2015. Since inception it has been engaged in the manufacturing and wholesale and retail distribution of nine different plant nutrients for cannabis, each of which comes in three separate sizes and which has been primarily marketed to the cannabis industry, more specifically, cultivation experts and other growers in the cannabis industry in Colorado. Each of its nine product lines are sold in three separate sizes, with retail pricing ranging from $25-$30 for small packages up to a range of $200-$300 for large packages.

The development of Success Nutrients product line was the result of consolidation of all the micro and macro nutrients found to produce the most grams of cannabis flower per square foot while achieving the highest quality possible. Until January 2017, operations were primarily directed towards the cannabis industry in the state of Colorado. Subsequently, Success Nutrient’s products were successfully registered with the state agricultural departments for California, Oregon, Washington, Arizona and Michigan, as well as in Canada. Prior to obtaining this registration these products were only able to be purchased online. As a result of being registered, all Success Nutrients products can now be displayed on retail shelves in those aforesaid states. The company will continue to pursue product registration in other states and countries prioritizing those locations that provide greater market size for these products.

The Success Nutrients brand provides one of the key underpinnings of the cultivation methodology and is essential to the overall Three A Light TM performance metric, which is discussed more fully below under “Business of Pono.” With an investment of two years of research, development and intense testing, this product line was specifically formulated for the cannabis industry.

The company's goal is to revolutionize modern cannabis gardening as it is currently known with an emphasis on stronger plants, healthy flowers and an overall cleaner product. Generally, growers of cannabis have been able to generate approximately 1.5 lbs per grow light. By using both the nutrients offered by Success Nutrients, together with the process offered by Pono, results have more than doubled in some cases. While no assurances can be provided that the company will be able to duplicate these results, if successful the company believe that this will add substantial growth to its existing cannabis consulting operation, especially as the cannabis industry continues to grow and expand as additional states approve the use and cultivation of medical and recreational marijuana. The company believe that if the company offer prospective new clients the opportunity to learn cultivation techniques that allow them to increase production over their competitors, its business will increase. As explained above, the combination of Success Nutrients and Pono techniques have directly resulted in the creation of a new line of consulting services that improve the performance of current cultivations.

Description of its Past and Existing Client Base

Medicine Man Technologies has been actively involved in the state application process on behalf of its clients. To date Medicine Man Technologies has actively participated in an application process in the following states: Colorado, California, Florida, Illinois, Nevada, New York, Maryland, Hawaii, Oregon, Pennsylvania and Puerto Rico. While Medicine Man Technologies has won and lost in pursuit of a license, to date Medicine Man Technologies has assisted clients in securing the following:

  • One Colorado cultivation license
  • Three Colorado dispensary licenses (Denver, Aurora, Thornton)
  • Two Illinois cultivation licenses
  • Four Illinois dispensary licenses
  • Two Nevada cultivation licenses
  • One Maryland processing license
  • One Maryland cultivation license
  • Three Maryland dispensary licenses
  • One Hawaii vertically integrated license noting the applicant was top scored in Kauai and was subsequently removed for investor background check violations
  • One Oregon Tier II Cultivation License and One Oregon Medical Cultivation License (outdoor)

In addition Medicine Man Technologies has the following pending applications:

  • Eight Pennsylvania grower/processor licenses
  • Four pending Pennsylvania dispensary licenses
  • One Puerto Rico cultivation license

Medicine Man Technologies is already generating new business opportunities in Michigan, Ohio, and Arkansas and have more recently initiated Cultivation MAX support services for a large Nevada client (500 light) which, over time may generate significant income for it.

As of the date of this Report Medicine Man Technologies has or have had 41 fee generating clients in 14 different states and Puerto Rico.


The company conduct its marketing efforts by providing a presence at specifically targeted industry based events, as well as through Medicine Man Denver’s established industry presence as a successful cannabis company. Medicine Man Technologies has been able to garner a substantial presence via this relationship. Because the cannabis industry is relatively new there are very few groups and companies who can identify themselves as having industry experience. The company believe Medicine Man Technologies is the exception as a result of its management’s experience with all aspects of the industry. See “Part II Item 10, Directors, Executive Officers and Corporate Governance.”

Medicine Man Technologies is members of various industry groups and attend industry based conferences which are helpful to advancing its brand and skill sets. The company created a marketing collateral materials bank and attended its first true marketing event in November 2014 at the Third National CannaBusiness Conference and Expo in Las Vegas and have continued to remain as Platinum Level Sponsors of those two events annually. The fall event this year (2017) will be held at the Las Vegas Convention Center and is expected to draw approximately 20,000 participants. The company will continue to market its licensing and related services to the cannabis industry through participation in various trade show events, continual use of free public content through interviews with its principals such as currently provided on CNN and MSNBC, direct referrals from satisfied licensees or past clients, various web presence advertising options utilizing specific industry related web sites and google ad words, and additional measures the company may choose to deploy from time to time.

The company also continue to coalesce interest and a presence within the industry through participation in various events and through direct promotion which have become available to Medicine Man and the Williams family, including being featured in MSNBC’s ‘Pot Barons’ series and detailed inclusion in other outlets such as MSNBC, Inc. Magazine, Katie Couric Live, The Today Show, the BBC, CBS, NBC, LeMonde, ABC, HBO, and many other national and international media. The company work to continually develop earned media sources noting elements of its licensor, Medicine Man Denver have been mentioned or featured in various national media sources many times since its inception in March 2014. In addition, members of its team are featured regularly as subject-matter experts, and appear as guest speakers; industry panel discussion members; and have been quoted or covered in full-feature articles in publications in both the U.S. and abroad. In addition to other national and industry publications, its professionals have most recently been quoted in US News and World Report, Inc. Magazine, CBE Press, and MJ Business Daily.

Joshua Haupt, via his Success Nutrients line as well as Pono Publications (Three-A-Light) has also been featured in many trade publications as well as at various cultivation show events nationally and has more recently been referred to as the ‘Steve Jobs’ of Marijuana (Civilized and Dope and High Times Magazines). His experience underscored by passion has allowed him to become one of the most prolific cultivators of cannabis in the country. More information about his businesses can be found at either or

As the company grow and mature with the cannabis industry the company believe the company will continue to identify new opportunities to expand its service offering groups. Medicine Man Technologies is already working in harmony with other consultants within the industry who lack certain experience or skills through licensure of specific cultivation technologies, with specific protections and non-disclosure agreements in place. The company do not provide its operations manual of training to potential licensees until they have a state granted license in place.

The company continue to enhance its web presence (, including providing updates to its home page, and links to its SEC reports (through OTC Markets) and industry partners. While no assurances can be provided, the company believe these upgrades will make its Internet presence more effective in the delivery of information related to its developing business.

The company also intend to evaluate new business opportunities as they come to its attention through these various marketing activities as the company continue to expand its brand warehouse and national presence in the cannabis industry. See “Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources.”


As described above, Medicine Man Technologies has executed applicable agreements to acquire Pono and SNI and are expecting these agreements to become effective upon approval from its shareholders. In the interim, Medicine Man Technologies has entered into an interim service provider contract with Pono Publications and Success Nutrients paving the way for those acquisitions. The company believe these particular acquisitions will allow it to expand its service lines, in addition to offering a proprietary cannabis specific nutrient line of its own that together with the Three-A-Light brand and book, will allow it to expand its value substantially to its current and future clients.

Ultimately, its intent is to become both a nationally (mid-term goal) and internationally (longer term goal) recognized cannabis company and brand warehouse. Medicine Man Technologies is continuously monitoring other public cannabis companies and their operations. It now appears there are several public companies who generate revenue from the sale of cannabis products. Previously, the company believed that it would be necessary for marijuana to be legal on the federal level before this could occur. This no longer appears to be the case.

Ideally, the initial transaction the company would consider is the acquisition of Medicine Man Denver cultivation and dispensaries. However, in order to do so it would be necessary that a change in the regulatory standards being imposed by the State of Colorado limiting ownership in all cannabis related businesses to preclude public company ownership be eliminated. Until this occurs the company will need to engage in an acquisition of an existing cannabis business in a state where the state law allows for public ownership of a cannabis company. While no assurances can be provided, the company believe there are many synergistic cannabis operations both already in business and which will enter the industry as more states continue to adopt legalization who will be interested in being acquired by it. The company's ability to eliminate duplication of general and administrative expenses; provide more centralized information marketing; and eliminate overlapping services offered will result in economies of scale. As of the date of this Report, Medicine Man Technologies is beginning to identify additional potential acquisition opportunities but have not conducted any discussions with these companies yet. There are no definitive agreements in place relating to its acquiring any such business, and there can be no assurances that such agreements will be executed on favorable terms, or at all in the future.

The company also plan to grow through the acquisition of related, complimentary businesses. In doing so the company expect to increase revenues and profits by providing a broader range of services in vertical markets which are consolidated under one parent, thus realizing synergies between the brands to increase sales on multiple fronts; reducing overhead costs by streamlining operations; and eliminating duplicitous efforts and costs. There are no assurances that the company will increase profitability if Medicine Man Technologies is successful in acquiring other synergistic companies.

If Medicine Man Technologies is successful, the acquisition of related, complimentary businesses is expected to increase revenues and profits by providing a broader range of services in vertical markets which are consolidated under one parent, thus reducing overhead costs by streamlining operations and eliminating duplicitous efforts and costs. There are no assurances that the company will increase profitability if Medicine Man Technologies is successful in acquiring other synergistic companies.

Management has begun to seek out and evaluate related, complimentary businesses for acquisition. The integrity and reputation of any potential acquisition candidate will first be thoroughly reviewed to ensure it meets with management’s standards. Once targeted as a potential acquisition candidate, the company will enter into negotiations with the potential candidate and commence due diligence evaluation, including its financial statements, cash flow, debt, location and other material aspects of the candidate’s business. One of the principal reasons for its filing of its registration statement of which this Prospectus is a part and the filing of an application to list its securities for trading is its intention to utilize the issuance of its securities as part of the consideration that the company will pay for these proposed acquisitions. If Medicine Man Technologies is successful in its attempts to acquire synergistic companies utilizing its securities as part or all of the consideration to be paid, its current shareholders will incur dilution.

In implementing a structure for a particular acquisition, the company may become a party to a merger, consolidation, reorganization, joint venture, or licensing agreement with another corporation or entity. The company may also acquire stock or assets of an existing business.

As part of its investigation, its officers and directors will meet personally with management and key personnel, may visit and inspect material facilities, obtain independent analysis of verification of certain information provided, check references of management and key personnel, and take other reasonable investigative measures, to the extent of its limited financial resources and management expertise. The manner in which the company participate in an acquisition will depend on the nature of the opportunity, the respective needs and desires of it and other parties, the management of the acquisition candidate and its relative negotiation strength.

The company will participate in an acquisition only after the negotiation and execution of appropriate written agreements. Although the terms of such agreements cannot be predicted, generally such agreements will require some specific representations and warranties by all of the parties thereto, will specify certain events of default, will detail the terms of closing and the conditions which must be satisfied by each of the parties prior to and after such closing, will outline the manner of bearing costs, including costs associated with its attorneys and accountants, will set forth remedies on default and will include miscellaneous other terms.

Depending upon the nature of the acquisition, including the financial condition of the acquisition company, as a reporting company under the Securities Exchange Act of 1934 (the “34 Act”), it may be necessary for such acquisition candidate to provide independent audited financial statements. If so required, the company will not acquire any entity which cannot provide independent audited financial statements within a reasonable period of time after closing of the proposed transaction. If such audited financial statements are not available at closing, or within time parameters necessary to ensure its compliance with the requirements of the 34 Act, or if the audited financial statements provided do not conform to the representations made by the candidate to be acquired in the closing documents, the closing documents will provide that the proposed transaction will be voidable, at the discretion of its present management. If such transaction is voided, the agreement will also contain a provision providing for the acquisition entity to reimburse it for all costs associated with the proposed transaction.

Additional business opportunities

The cannabis industry is developing rapidly. As it continues to develop the company believe additional business opportunities will arise.

As an example, one aspect that Medicine Man Technologies has identified is the opportunity to provide job placement services to its clients. The company believe Medicine Man Technologies is in a unique position as a result of its developing extensive contacts within the cannabis industry at all levels of operations, to utilize these contacts and industry knowledge to expand its business. As its clients move from planning to execution they have the need to fill key positions in cultivation and dispensary operations, and operations leadership. As of the date of this report Medicine Man Technologies is currently taking initial steps to investigate the possibility of its providing a professional staffing function within Medicine Man Technologies to fulfill that need. However, Medicine Man Technologies is not currently engaged in this aspect of the business and there are no assurances that the company will expand its operations in this manner.

Medicine Man Technologies is continuing to explore other opportunities as Medicine Man Technologies has the resources and fit to achieve such consideration.

government regulations

Recent developments in the public company sector seem to suggest that as long as such companies engaging in actual ‘touching of the plant’ 1) disclose as fully as possible the risks associated with the industry, 2) maintain compliance with state and local regulations, and 3) work to ensure any such products containing THC are restricted to an adult marketplace for those 21 years and older they will be able to continue on as a public company entity noting recently in Pennsylvania a new state initiative for medical cannabis included language allowing a public company to hold a Pennsylvania Permit.

In spite of the recent industry concerns related to a change in the administration and while no assurances can be provided, the company believe that the industry will be allowed to continue its growth and new state adoptions as this new administration has been on record as being in support of states’ rights and medical cannabis. However, in the event the federal government elects to change its current regulatory structure, including eliminating the Cole and Ogden memorandums adopted by the Obama Administration and enforce the current federal prohibition on cannabis, its business will be significantly negatively impacted.

Marijuana is a Schedule-I controlled substance and is illegal under federal law. Even in those states in which the use of marijuana has been legalized, its use remains a violation of federal laws. The company also should like to note that recently one public company (symbol TRTC) has recently acquired new business lines that do generate revenues from the direct sales of cannabis products and that should this (as well as others to be defined) practice be allowed under SEC reporting guidelines the company also have begun to look at opportunities in this space.

A Schedule I controlled substance is defined as a substance that has no currently accepted medical use in the United States, a lack of safety for use under medical supervision and a high potential for abuse. The Department of Justice defines Schedule 1 controlled substances as “the most dangerous drugs of all the drug schedules with potentially severe psychological or physical dependence.” If the federal government decides to enforce the Controlled Substances Act in Colorado with respect to marijuana, persons that are charged with distributing, possessing with intent to distribute, or growing marijuana could be subject to fines and terms of imprisonment, the maximum being life imprisonment and a $50 million fine. Any such change in the federal government’s enforcement of current federal laws could cause significant financial damage to it.

As of the date of this report, 28 states and the District of Columbia allow their citizens to use Medical Marijuana, with Texas being the most recent state to add a medical initiative. Additionally, voters in the states of Colorado, Washington, Alaska, Oregon, California, Nevada, Maine, and Massachusetts have all approved legalization of cannabis for adult use. The state laws are in conflict with the Federal Controlled Substances Act, which makes marijuana use and possession illegal on a national level. The Obama administration effectively stated that it is not an efficient use of resources to direct federal law enforcement agencies to prosecute those lawfully abiding by state-designated laws allowing the use and distribution of medical marijuana. However, there is no guarantee that the Trump administration will not change the government’s policy regarding the low-priority enforcement of federal laws. Additionally, any new administration that follows could change this policy and decide to rigidly enforce the federal laws. Any such change in the federal government’s enforcement of current federal laws could cause significant financial damage to it.

Although cultivation and distribution of marijuana for medical use is permitted in many states, provided compliance with applicable state and local laws, rules, and regulations, marijuana is illegal under federal law. Strict enforcement of federal law regarding marijuana would likely result in the inability to proceed with its business plan and could expose it and its management to potential criminal liability and subject their properties to civil forfeiture. Though the cultivation and distribution of marijuana remains illegal under federal law, H.R. 83, enacted by Congress on December 16, 2014, provides that none of the funds made available to the DOJ pursuant to the 2015 Consolidated and Further Continuing Appropriations Act may be used to prevent states from implementing their own laws that authorize the use, distribution, possession, or cultivation of medical marijuana. However, state laws do not supersede the prohibitions set forth in the federal drug laws.

For a comprehensive and up to date perspective on this process and current states and territories cannabis laws please refer to the following link:

In order to participate in either the medical or recreational sides of the marijuana industry in Colorado and elsewhere, all businesses and employees must obtain licenses from the state and, for businesses, local jurisdictions. Colorado issues four types of business licenses including cultivation, manufacturing, dispensing, and testing. In addition, all owners and employees must obtain an occupational license to be permitted to own or work in a facility. All applicants for licenses undergo a background investigation, including a criminal records check for all owners and employees.

Colorado has also enacted stringent regulations governing the facilities and operations of marijuana businesses. All facilities are required to be licensed by the state and local authorities and are subject to comprehensive security and surveillance requirements. In addition, each facility is subject to extensive regulations that govern its businesses practices, which includes mandatory seed-to-sale tracking and reporting, health and sanitary standards, packaging and labeling requirements, and product testing for potency and contaminants.

The Department of Justice has stated that it will continue to enforce the Controlled Substance Act with respect to marijuana to prevent:

  • the distribution of marijuana to minors;
  • criminal enterprises, gangs and cartels receiving revenue from the sale of marijuana;
  • the diversion of marijuana from states where it is legal under state law to other states;
  • state-authorized marijuana activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity;
  • violence and the use of firearms in the cultivation and distribution of marijuana;
  • driving while impaired and the exacerbation of other adverse public health consequences associated with marijuana use;
  • the growing of marijuana on public lands; and
  • marijuana possession or use on federal property.

Laws and regulations affecting the medical marijuana industry are constantly changing, which could detrimentally affect its proposed operations. Local, state and federal medical marijuana laws and regulations are broad in scope and subject to evolving interpretations, which could require it to incur substantial costs associated with compliance or alter its business plan. In addition, violations of these laws, or allegations of such violations, could disrupt its business and result in a material adverse effect on its operations. It is also possible that regulations may be enacted in the future that will be directly applicable to its business. These ever changing regulations could even affect federal tax policies that may make it difficult to claim tax deductions on its returns. The company cannot predict the nature of any future laws, regulations, interpretations or applications, nor can the company determine what effect additional governmental regulations or administrative policies and procedures, when and if promulgated, could have on its business.

Since the use of marijuana is illegal under federal law, many banks will not accept for deposit funds from businesses involved with marijuana. Consequently, businesses involved in the marijuana industry often have trouble finding a bank willing to accept their business. The inability to open bank accounts may make it difficult for its clients to operate.


As of the date of this report the company employees fifteen (15) full time employees and a number of specialty contractors providing support for various elements including media, marketing, state registration of nutrient products, website evolution and new app development.

None of its employees is represented by a labor union or a collective bargaining agreement. The company consider its relations with its employees to be good.


2017-11-14 - Asif

one hours interview with the management can be found on the company's website here is the link (audio clip on the bottom)

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