How big could MDC be? Answer: Stupid big

The stock is ripping hard at the moment so i thought it worth considering what the upside case is here...

Here a two ways I think ofit:

1: Top downmethod

• Legal cannabis sales in the US are currently $16bn (as recently quoted by Jeffries investment bank)
  • They assume 50% of this is 'therapeutic' versus 'recreational'
  • Of that $8bn, one might assume at least 50% is used to manage 'pain' (other uses being anxiety and sleep)
  • That suggests a market size in the US only of >$4bn for 'pain'
  • Since MDC's Nanabis product is the only cannabis product currently scheduled for Phase 3 FDA trails for 'pain', it could be a very large part of this market. Particularly assuming that any doctor would effectively be obliged to prescribe Nanabis in place of any other non-approved drug.

2: Comparison toGW Pharma (GWPH)

• The best global comp for what MDC could be in 5 years time is GWPH
• Citi values GWPH at US$5.95bn, as per the Sum-Of-Parts valuation below
• GWPH's core product, Epidiolex, is the only FDA approved cannabis product globally. However, it is only approved for use in Epilepsy, not pain or anxiety. It currently is doing $400m turnover per annum, but Citi has it forecast it to do around $1.6bn in 2025 - see below.
• The question is, what would MDC be worth if it were the only cannabis product with FDA approval for 'pain', which is a much, much larger market than epilepsy? Something larger than US$5.95bn??? It seems crazy, but go back and have a look at their Phase 2 trial results for MDC… they were very promising