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Tuesday, November 24, 2020

Medmen Enterprises Inc (OTCMKTS:MMNFF) Exemplifies the Evolution of the Cannabis Patch Ahead

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As we continue to play out the “Great Q418 Cannabis Correction”, we would continue to focus on dips in stocks that have been establishing a wider sales footprint not directly related to the Canadian legalization move last month, such as Medmen Enterprises Inc (OTCMKTS:MMNFF).

As a case in point, the company just announced that it has completed its acquisition of Omaha Management Services, LLC, for control of Monarch, a Scottsdale, Arizona-based licensed medical cannabis license holder with dispensary, cultivation and processing operations. According to the release, “The transaction, with WhiteStar Solutions LLC (“WhiteStar”), included the acquisition of WhiteStar’s exclusive co-manufacturing and licensing agreements with Kiva, Mirth Provisions and HUXTON for the state of Arizona.”

Medmen Enterprises Inc (OTCMKTS:MMNFF) frames itself as a company that, together with its subsidiaries, operates in the cannabis space in the United States.

The company cultivates, produces, possesses, uses, and distributes/retails cannabis in the recreational and medicinal cannabis marketplace. As of June 6, 2018, it owned and operated 18 licensed cannabis facilities under the MedMen brand name in California, Nevada, and New York.

The company frames itself as “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.

The company is headquartered in Culver City, California. MedMen Enterprises Inc. is a subsidiary of The Medmen Of Nevada 2 Llc.

According to company materials, “MedMen Enterprises 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 and is one of the nation’s largest financial supporters of progressive marijuana laws.”

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As noted above, MMNFF just announced that it has completed its acquisition of Omaha Management Services, LLC, for control of Monarch, a Scottsdale, Arizona-based licensed medical cannabis license holder with dispensary, cultivation and processing operations. In all, we’ve witnessed -8% stripped out of share pricing for the stock in the past week.

Furthermore, the company has seen interest climb, with an increase in recent trading volume of 32% beyond what we have been seeing over the larger time frame. This should not be overlooked due to the limited float size in the stock (barely over 17M shares).

“As we look to operationalize the acquisitions we have made in recent months, our team has focused on timely and seamless transitions,” said Adam Bierman, MedMen chief executive and co-founder.

“From the signing of the letter of agreement in October to opening our first dispensary in Arizona, we have been able to activate in a matter of weeks. It is testament to the quality of our team and I couldn’t be prouder of our staff.”

Earning a current market cap value of $1.44B, MMNFF has about $12.2M in cash on the books, which must be weighed relative to a mountain of over $86M in total current liabilities. The company has been pulling in significant revenues, with over $7M in Q1 of this year, representing over 630% quarterly y/y growth on the top line. This may be a very interesting story and we will look forward to updating it again soon. Sign-up for continuing coverage on shares of $MMNFF stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in $MMNFF, either long or short, and we have not been compensated for this article.

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