Can Medmen Enterprises Inc (OTCMKTS:MMNFF) Pull Another Rabbit?

Can Medmen Enterprises Inc (OTCMKTS:MMNFF) Pull Another Rabbit?

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Shares of Medmen Enterprises Inc (OTCMKTS:MMNFF) have continued to underperform under the weight of a number of factors. The question now is this: will the company find a way to reinvigorate the dramatic growth curve that could fuel a catch-up process with the dynamic success of its peers? To make matters more interesting, the company just announced that it has entered into an equity distribution agreement with Canaccord Genuity Corp. pursuant to which the Company may, from time to time, sell Class B subordinate voting shares in the capital of the Company for aggregate gross proceeds of up to CDN$60,000,000.

According to the release, “The At-the-Market equity financing program is designed to enable the Company to issue Subordinate Voting Shares from treasury at lower cost than traditional offerings, without discount and at prevailing trading prices. The Company intends to use the net proceeds from the sale of Subordinate Voting Shares under the ATM program principally for general and administrative expenses, working capital needs and other general corporate purposes.”

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 entered into an equity distribution agreement with Canaccord Genuity Corp. pursuant to which the Company may, from time to time, sell Class B subordinate voting shares in the capital of the Company for aggregate gross proceeds of up to CDN$60,000,000.

Recent action has seen -4% stripped out of share values of the company over the past month of action. Furthermore, the stock has seen a jump in recent trading volume to the tune of 18% beyond its prior sustained average level.

“The ATM program provides added financial flexibility at attractive terms, which is critical as we continue to expand our footprint and capitalize on opportunities to increase our market share,” said Michael Kramer, Chief Financial Officer. “As a complement to our other financing vehicles, we now have a variety of capital sourcing options to support the execution of our growth strategy.”

Earning a current market cap value of $1.34B, 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. You can bet we will update this one again as new information comes into view. 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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