Utah-based Medical Marijuana Firm, Kindly MD, has Filed Paperwork for an IPO

Utah-based Medical Marijuana Firm, Kindly MD, has Filed Paperwork for an IPO
Photo by Joel Muniz / Unsplash

Murray, Utah-based Kindly MD, a three-year-old medical marijuana firm registered and licensed by the state of Utah, has quietly filed documentation with the U.S. Securities and Exchange Commission signifying its intent to raise monies via an Initial Public Offering.

According to Kindly MD's Form S-1, the company has signed New Jersey-based WallachBeth Capital LLC as its sole book-running manager and intends to offer an as-yet undisclosed number of units for sale to the public, consisting of both common stock and tradeable warrants, with the intent the units, shares, and warrants will trade on the NASDAQ Stock Market. {NOTE: As such, Kindly MD has not disclosed how much money it hopes to raise through its IPO.}

In its Form S-1, Kindly MD defines itself as

"... a healthcare data company, focused on holistic pain management and reducing the impact of the opioid epidemic ... (one that) offers direct health care to patients integrating prescription medicine and behavioral health services to reduce opioid use in the chronic pain patient population."

Continuing, Kindly MD says its "... specialty outpatient clinical services are offered on a subscription and fee-for-service basis to augment traditional healthcare. (Specifically, Kindly MD) offers evaluation and management, including, but not limited to chronic pain, functional medicine, cognitive behavioral therapy, trauma and addiction therapy, recovery support services, overdose education efforts, peer support, limited urgent care, preventative medicine, travel services, and hormone therapy."

According to this preliminary Prospectus from the company,

  • Kindly MD currently serves "... 21% of the total Utah medical cannabis patient population as of this filing" (which is over 14,800 patients).
  • The firm also plans to "... build a multi-state network of in-person clinics, telemedicine resources, and wholly owned subsidiaries in the outpatient medical space."

To be able to recommend and prescribe medical marijuana treaments to patients in Utah, a healthcare provider must become what is known as a Qualified Medical Provider.

According to the Utah Department of Health and Human Services website, QMPs are

"Utah-licensed physicians (MDs and DOs), advanced practice registered nurses (APRNs), physician assistants (PAs), and podiatrists (DPMs) who are licensed to prescribe a controlled substance may receive approval from DHHS to recommend medical cannabis treatment for their patients."

Utah DHHS data shows that Kindly MD is currently 1 of over 950 Qualified Medical Providers in Utah, and the firm claims to be the largest QMP in the state, as well as Utah's largest alternative pain treatment facility.

According to its online Company Profile/Investor Presentation, Kindly MD

  • Generated ~$3.8 million in revenue in 2022,
  • Up from $2.5 million in revenue in 2021, and
  • Up from ~$1.0 million in revenue in 2020.

The company did, however, lose ~$2.5 million in 2022, versus net income of $149,000 in 2021.

Quick Thoughts about the Kindly MD IPO

Obviously, as with any preliminary Prospectus, there is certain data that is just not included in Kindly MD's initial Form S-1.

However, I think it's intriguing that such a young company would choose to "test the waters" (as it were) to attempt to raise monies via an Initial Public Offering, especially given how the public markets have almost completely dried-up over the past 12+ months.

Clearly, now that we're post-Labor Day, Wall Street has seen a definite uptick in the number of IPOs during the past several weeks with companies such as Instacart (NASDAQ:CART), Arm Holdings (NASDAQ:ARM), and Klavio (NYSE:KVYO) just a few of the firms choosing to "go public" of late.

But an IPO for Kindly MD? Now? That's an interesting premise.

Medical Marijuana / Cannabis companies were hot as a pistol in the two years following passage of the Agriculture Inprovement Act of 2018 which legalized the growing of hemp in the United States, but did not remove the controlled substance label from so-called marijuana (cannabis with a THC level of over 3.0 percent).

Many of these firms raised near obscene amounts of money, with several going public, like Curaleaf Holdings (OTC:CURLF), Trulieve Cannabis (NASDAQ:TCNNF), and SNDL (NASDAQ:SNDL).

And yet, a quick review of the stock performance of these and other publicly traded cannabis firms shows most down significantly from their highs in 2018/2019.

So ... how will Kindly MD do with an IPO? I really have no idea.

But, I will be paying attention.