Medmen Enterprises Inc (OTCMKTS: MMNFF) is an exciting cannabis Company that has been getting a lot of attention lately. Medmen operates 19 cannabis dispensaries in 3 states. The Company is also expanding into Florida.
Cannabis is a great place to be; according to a recent report from Arcview Market Research and its research partner BDS Analytics, over the next 10 years, the legal cannabis industry will see much progress around the globe and spending on legal cannabis worldwide is expected to hit $57 billion by 2027. The adult-use (recreational) market will cover 67% of the spending; medical marijuana will take up the remaining 33%. The largest group of cannabis buyers will be in North America, going from $9.2 billion in 2017 to $47.3 billion a decade later. Of course much of this hinges on how laws progress.
Medmen Enterprises Inc (CSE: MMEN) (OTCQB: MMNFF) is a leading cannabis company in the U.S. with assets and operations across the country. Based in Los Angeles, MedMen brings expertise and capital to the cannabis industry. The Company operates 19 facilities under the MedMen brand name in California, Nevada and New York.
MedMen is headquartered in Culver City, California, in a 12,000-square-foot, state-of-the-art office complex that was designed and executed by MedMen’s own facilities team, showcasing the company’s design and construction capabilities.
MedMen Enterprises employs more than 800 people across the United States. The predecessor to MedMen Enterprises 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.
Medmen recently opened its Project Mustang, a 45,000-square-foot, state-of-the-art cultivation and manufacturing facility in northern Nevada. The same factory design is currently being built in Desert Hot Springs, California, with completion scheduled for early 2019. The Company plans to build the same factories in New York, where it currently holds one of 10 medical marijuana licenses, and, if it closes its proposed acquisition, near Orlando, Florida. MedMen announced in July that it had entered into a definitive agreement to purchase a Florida license holder with a cultivation facility and rights to open 25 stores in that state.
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In September Medmen reported unaudited systemwide retail revenue for its fiscal 2018 fourth quarter ended June 30, 2018. Across the Company’s operations in California, Nevada and New York, systemwide retail revenue was US$19.2 million (CA$25.2 million). The Company is expected to post its audited fiscal 2018 full year results in October.
Strong systemwide retail revenue for the quarter is primarily attributable to MedMen’s stores in Southern California’s recreational market. Excluding its Abbot Kinney store, which opened in early June of this year, the Company’s other 7 retail locations reported a combined US$17.4 million in revenue (CA$22.8 million), with an average retail markup over wholesale of 90%. These 7 locations saw 94,000 new customers and nearly 130,000 returning customers.
MedMen continues to expand its operations in Nevada, successfully opening its first branded store in downtown Las Vegas in July and recently won approval to operate a second location near the Hard Rock Hotel, the Thomas and Mack Center and McCarran International Airport, set to open in October.
Medmen recently entered into a bought deal equity financing with Eight Capital in the amount of CAD$75 Million. The Company intends to use the net proceeds for continued expansion of its retail footprint across attractive cannabis markets, development of its cultivation and production facilities, working capital and general corporate purposes. The Company also increased their term loan facility managed by Hankey Capital and an affiliate of Stable Road Capital to C$99,952,190.
Medmen also recently secured prime retail locations with long term leases in Ft. Lauderdale, Miami Beach, West Palm Beach, St. Petersburg and Key West. The company continues to expand its footprint in premium retail districts with high visibility and heavy foot traffic. The Company also completed the transaction it announced on June 6, 2018, acquiring a dispensary and cultivation license and related assets from Florida based Treadwell Simpson Partnership and affiliates. The License permits the Company to open 30 (and up to 35 if certain conditions are met) medical marijuana dispensaries in the State of Florida and to conduct cultivation, delivery and manufacturing operations in the State of Florida.
On October 9 MedMen announced the hiring of Ben Cook as its new chief operating officer. Cook is an accomplished global supply chain executive with 15 years of experience executing and managing logistics for retail and consumer brands including Sam’s Club, Target and Apple.
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Currently trading at a $2 billion market valuation Medmen has $12 million in the treasury, significant debt on the books and fast growing revenues reporting US$19.2 million (CA$25.2 million) in sales for the fourth quarter ended June 30, 2018. Medmen is one exciting Company and one of the best positioned cannabis enterprises in the country currently operating 19 licensed facilities touching the whole vertical from cultivation to retail in three key states; California, Nevada and New York. With over employees and expansion plans in other key markets, such as Florida, Arizona and Canada. There is currently huge demand for Medmen and the next few weeks should be very exciting here as legal recreational cannabis in Canada comes n Ocober 17. We will be updating on Medmen when more details emerge so make sure you are subscribed to Microcapdaily so you know what’s going on with Medmen.
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Disclosure: we hold no position in Medmen either long or short and we have not been compensated for this article.