MedMen Enterprises, Inc (OTCQX: MMNFF) is a cannabis company in the United States with multiple assets and operations in California, Nevada, New York and Florida. MedMen owns and operates licensed cannabis facilities in cultivation, manufacturing and retail.
On January 17, 2019, the company announced preliminary revenue data for its fiscal 2019 second quarter ended December 29, 2018.
Systemwide retail revenue for the quarter, including revenue from pending announced acquisitions, is based on 31 retail stores that were operational at the end of the quarter. This includes the MedMen Paradise location near McCarran International Airport in Las Vegas, which opened in October, and the MedMen Scottsdale location in Arizona, which opened in December through the closing of the Monarch acquisition. The operational retail locations, including pending acquisitions, represent 40% of the 77 total stores that the Company is licensed for across 12 states.
Strong systemwide retail revenue for the quarter is primarily attributable to MedMen’s stores in Southern California’s recreational market. In California, the Company’s eight retail locations reported a combined US$23.7 million (CA$31.4 million) in revenue, which represents a 27% quarter-over-quarter increase. Cowen’s most recent estimate projects California will be a US$11 billion market by the end of 20304.
“California is the prize of the cannabis industry and the performance of our stores, quarter-over-quarter, is a reflection of our continued execution in our home state,” said Adam Bierman, MedMen chief executive officer and co-founder.
In addition to growing revenue at its existing locations, the Company has 16 new locations slated to open during calendar year 2019, including 12 locations in Florida, where the Company is licensed for up to 30 locations. The Company is set to open four retail stores in Florida in the next 90 days, which include locations in Miami Beach, Orlando, West Palm Beach and Key West.
Retail Licenses 77
Operational Stores (Including Pending Acquisitions) 31
On January 7th, MedMen announced that Treehouse Real Estate Investment Trust has completed its first round of capital raise at $133 million and will partially use the funds to purchase properties from the Company.
The newly formed real estate investment vehicle looks to capitalize on the fast-growing cannabis industry in the U.S. that is projected to grow to $75 billion in gross sales by 2030, according to Wall Street research firm Cowen & Co.
Treehouse is a collaboration between MedMen and Stable Road Capital, a Venice, California-based investment firm with successful track records in real estate and cannabis. Treehouse is governed by an independent board. Treehouse has a management contract with MedMen to oversee day-to-day operations until Treehouse goes public, at which point management will be internalized.P
MedMen Enterprises is the preeminent cannabis company in the United States with multiple assets and operations in California, Nevada, New York and Florida. MedMen owns and operates licensed cannabis facilities in cultivation, manufacturing and retail, and is one of the most well recognized cannabis brands in the world today. Headquartered in Los Angeles, MedMen employs more than 800 workers across the United States. It was founded in 2010 by Adam Bierman and Andrew Modlin, two visionary entrepreneurs who saw not just a tremendous business opportunity in the growing legalization of marijuana, but a chance to re-define our society’s relationship with cannabis. MedMen supports sensible, clear and just drug laws. The Company is the single largest financial supporter of progressive marijuana laws at the local, state and federal levels, giving directly to pro-legalization groups, industry organizations and political candidates.
Unaudited systemwide revenue for its fiscal 2019 second quarter ended December 29, 2018. Across the Company’s operations in California, Nevada, New York and Arizona, systemwide revenue was US$29.9 million (CA$39.7 million). This represents a 40% quarter-over-quarter increase over its fiscal 2019 first quarter ended September 30, 2018. Systemwide revenue, pro forma for pending acquisitions that have not yet closed, was US$49.5 million (CA$65.7 million) for the quarter. For the second quarter, gross margin across its retail operations was 54%1, compared to 45% in the previous quarter. The Company is expected to post its fiscal 2019 second quarter results in February.
Stock influences and risk factors
The company may need to seek further financing to pay for future growth.
Cannabis remains an illegal Schedule I drug under US law.
Continuing growth of the company revenues and retail locations could act as a catalyst for the company shares.
The cannabis sector is going through rapid growth and consolidation and is very competitive. Others in the sector may be better financed or have other advantages to compete.
On Monday, January 28, 2019, MMNFF shares were at $3.53 per share on traded volume of 887K shares traded. The current RSI (14) is 60.51
At $3.53, MMNFF shares are trading above their 50 DMA.
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