Is This the Moment of Truth for Medmen Enterprises Inc (OTCMKTS:MMNFF)?

Is This the Moment of Truth for Medmen Enterprises Inc (OTCMKTS:MMNFF)?


One of the big questions out there right now for OTC cannabis patch traders with a US focus is whether or not Medmen Enterprises Inc (OTCMKTS:MMNFF) will hold key range support following its recent reputational and market woes. The stock has been holding the $2.75 area on tons of volume. That’s the battleground. It managed to close above it on Friday, and shareholders will be holding their breath for the action on Monday.

To help further flesh out the story, the company just announced it has entered into definitive agreements in respect of a US$250,000,000 secured convertible credit facility with Gotham Green Partners, an investor in the global cannabis industry. “We are excited to close our investment into MedMen. The company has firmly established itself as the leading cannabis retailer in the United States with an unparalleled physical and brand footprint across the country,” said Jason Adler, managing member of Gotham Green Partners. “We look forward to working closely with management to accelerate growth and drive margin improvement across the organization.”

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 it has entered into definitive agreements in respect of a US$250,000,000 secured convertible credit facility with Gotham Green Partners, an investor in the global cannabis industry.

The stock has suffered a bit of late, with shares of MMNFF taking a hit in recent action, down about -8% over the past week. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -13%. In addition, the company has registered slightly increased average transaction volume recently, with the past month seeing 2% above the average volume levels in play in this stock over the longer term. That isn’t much, but it’s important to note that interest in transacting here isn’t falling off in this pattern.

According to the release, “The Facility will be accessed through issuances to the lenders of convertible senior secured notes co-issued by the company and MM CAN USA, Inc., a subsidiary of the company, in an aggregate amount of up to US$250,000,000. Under the definitive terms, notes will be issuable in up to 5 tranches, with each tranche being issuable at the option of the company, subject to certain conditions and, in certain cases, price thresholds for the Class B subordinate voting shares of the company. The initial tranche, which the company and MM CAN have drawn down, was for gross proceeds of US$20,000,000.”

At this time, carrying a capital value in the market of $1.35B, 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. We will update the story again soon as developments transpire. 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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