MariMed Inc. (OTCQB: MRMD) designs, develops, finances, and optimizes the success of medical cannabis cultivation, production, and dispensary facilities. MariMed’s team has developed state-of-the-art regulatory-compliant facilities in DE, IL, NV, MD, MA, and RI.
In the recent past, the company stock has shown a solid uptrend, led by the strong fundamentals and multiple positive catalysts in the recent past. The company’ robust business and financial risk profile are marked by its diverse platform, continuous flow of capital for new business and product development, strategic acquisitions, and expansion of infrastructure that will enable it to take advantage of this critical time in the industry.
The company recently announced that it had signed a letter of intent (LOI) to make a strategic investment in Cannabis Venture Partners (CVP). CVP’s flagship technology, Sprout, is an all-in-one CRM and marketing software designed for dispensaries and cannabis brands. The Sprout software platform is used today by dispensaries and cannabis brands in nine states and its clients – brands and dispensaries – typically achieve 10x return on their marketing spend to acquire, retain, and increase the share of wallet with their customers.
Through its partnership with MariMed, Cannabis Venture Partners will continue to develop and expand the Sprout platform and launch new technologies, data, and content that are consumer-centric and help dispensaries and cannabis brands increase sales, improve customer loyalty and reach more customers.
Before this on May’16th the company reported first quarter financial results for 2018, posting consecutive year over year increased Q1 quarterly revenue since 2015. MariMed’s management expertise in cannabis has led to a dramatic increase in revenue at client facilities. The company reported $2.08 Million in Q1 2018 Revenue, an 81% Increase.
The company continues to be on a solid trajectory of the year over year growth that it has achieved each quarter since 2015. MRMD’ new Maryland cultivation and production facility, which came online in Q1, will bring increased rent, management, and licensing fees, adding to its existing revenue streams from facilities in Illinois, Delaware, and Nevada. The management anticipates increases in revenue from assets as the cannabis business in Maryland and Massachusetts continues to expand.
With each new client, MRMD generates significant revenue from fees for leases, licenses, and managed services. The management expects incremental growth in licensing from new product lines and organic growth from product sales as its licensed Nature’s Heritage Cannabis, Kalm Fusion, Betty’s Eddies, Tikun Olam and Lucid Mood brands gain loyal followings in each current market and as it expands its national distribution network to additional states.
From an industry perspective, the legal cannabis industry has accelerated at a remarkable pace in the recent past. North American consumers spent $6.9 billion on legal cannabis products, up 34% from 2015 and by 2021, legal market sales are expected to surpass $21 billion. If we take that call, then that adds extreme value further.
Analysts believe that MRMD is one of those handful companies that has achieved continuous revenue growth and is well poised to capture the opportunities for growth in Massachusetts and Maryland. MRMD is part of one of the major success stories that are available in the market. Company’s healthy financial position, as well as a robust business profile, makes it a compelling investment/trading option.
About the Company: MariMed designs, develops, finances, and optimizes the success of medical cannabis cultivation, production, and dispensary facilities through its validated management. MariMed’s team has developed or is in the process of developing state-of-the-art regulatory-compliant facilities in DE, IL, NV, MD, MA, and RI. These facilities are models of excellence in horticultural principals, cannabis production, product development, and dispensary operations.
In addition, MariMed is at the forefront of precision dosed branded products for the treatment of specific medical symptoms. MariMed currently distributes its branded products in select states and is expanding licensing and distribution to numerous additional states encompassing thousands of dispensaries. MariMed Inc. is one of the 17 top-performing public cannabis companies in the U.S.
Other recent Activities/Announcements
- Capital Raised: raised approximately $1.5 million in equity through the sale of its 144 Common Stock in private placement in 2018 at prices averaging 15% below the market price.
Growth in the Multiple States: MariMed continued expanding its operations in cannabis-licensed states:
- Maryland: Kind Therapeutics USA began production of products from first crops under MariMed guidance. Began distribution of Nature’s HeritageCannabis™, MariMed’s new branded strains and products. Began cultivation of Tikun Olam™ branded cannabis strains that have been proven effective in clinical research trials.
- Massachusetts: Continued construction of 68,000 sq. ft. State-Of-The-Art cultivation and production cannabis facility in New Bedford. Constructing a licensed cannabis dispensary in Middleborough. Actively pursuing permit approval for development of two additional dispensaries in Boston area.
- Nevada: Expanded Kalm Fusion™ Popcorn and Powdered Tincture into medical and recreational dispensaries.
- Delaware, Illinois, Maine: Continued distribution of licensed Kalm Fusion and Betty’s Eddies™ brands to 57 additional medical cannabis dispensaries.
- Branded Products: Introduced MariMed’s new Nature’s Heritage Cannabis brand, MariMed’s branded products and flower grown by Kind Therapeutics USA to approximately 35 newly opened medical cannabis dispensaries in Maryland. Continue to expand licensing sales of MariMed Brands, Kalm Fusion, and Betty’s Eddies.
Latest Quarter Financial position:
Revenue and Yields: MariMed had $251,166 of operating income in the first quarter of 2018, an increase from $228,552 in the comparable quarter in 2017. MariMed incurred a net loss of $1.83 million in the first quarter of 2018, versus net income of $0.11 million in the first quarter of 2017. The loss is primarily due to non-cash equity compensation and debt settlements in 2018 that have no impact on operations/cash flow.
- Debt Reduction: Reduced liabilities by $1.5 million through the conversion of $0.98 million of promissory notes into Common Stock and retiring $500,000 of additional promissory notes.
- Capital Raised:Raised approximately $1.5 million in equity through the sale of its 144 Common Stock in private placement in 2018 at prices averaging 15% below the market price.
Key risk factors and potential stock drivers:
- Company’s ability to maintain its liquidity and financial flexibility to fund its incremental capital requirements.
- Notwithstanding the recent boom, this is still a nascent stage space and only time would differentiate between real winners and laggards. As far as choosing an option with a relative advantage is concerned, MRMD is the preferred choice with upside potential.
- MRMD’s ability to acquire and incubate other marijuana companies as the sector consolidates
- On Friday, July 13th, 2018, MRMD closed at $3.20, on volume of 195K shares exchanging hands. Market capitalization is $619 million. The current RSI is 59.22
- At $3.20, shares of MRMD are trading above its 50-day moving average (MA) at $2.25 and above its 200-day moving average (MA) at $1.17
- The present support and resistance levels for the stock are at $2.57 & $3.51 respectively.