Did We Just See Medmen Enterprises Inc (OTCMKTS:MMNFF) Puke the Kitchen Sink?

Did We Just See Medmen Enterprises Inc (OTCMKTS:MMNFF) Puke the Kitchen Sink?

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Here’s the big point for Medmen Enterprises Inc (OTCMKTS:MMNFF): is the big bad news finally out? If so, then we may see a sell-the-rumor-buy-the-news reaction in the tape over the coming week, suggesting an interesting tactical opportunity may be in the works. To wit: The company just announced that, in light of market developments over the past 12 months and the continued evolution of its business strategy, MedMen and its Board have determined that focusing on leveraging the company’s retail brand, its leadership position in California, and its digital platform to grow the business will create greater shareholder value than the completion of its takeover transaction with PharmaCann, LLC.

According to the release, in connection with the termination, PharmaCann has agreed to transfer certain cannabis licenses and related assets in Illinois and Virginia to MedMen for no additional consideration from MedMen, other than the forgiveness of certain debt, as further described below.

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, in light of market developments over the past 12 months and the continued evolution of its business strategy, MedMen and its Board have determined that focusing on leveraging the company’s retail brand, its leadership position in California, and its digital platform to grow the business will create greater shareholder value than the completion of its takeover transaction with PharmaCann, LLC.

The stock has suffered a bit of late, with shares of MMNFF taking a hit in recent action, down about -27% over the past week. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -38%. What’s more, the company has seen interest climb, with an increase in recent trading volume of 51% over what the stock has registered over the longer term.

“The cannabis sector has evolved tremendously since we first announced the PharmaCann transaction and based on the current macro-environment and future opportunities that exist for our business, we believe it is now in the best interest of our shareholders to deepen, rather than widen, our Company’s reach,” said Adam Bierman, MedMen co-founder and chief executive officer. “Looking at the PharmaCann portfolio today, Illinois has emerged as the most attractive opportunity for our longer-term, strategic growth plan. The addition of those assets, without dilution, is a win for MedMen and our shareholders.”

Now commanding a market cap of $250M, 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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