The shelling of Medmen Enterprises Inc (OTCMKTS:MMNFF) continues this week, with shares of the stock dropping sharply below the key dollar level on strong volume. So, one might ask, what’s next? The company tried to lay that out recently when it announced a strategic plan to achieve its target of positive EBITDA by the end of calendar year 2020.
According to the release, “The 90-day plan will focus on five key objectives: 1) focusing on core markets, while divesting non-core assets; 2) reducing corporate SG&A; 3) driving asset-level EBITDA; 4) limiting cash outlays for the next 12 months; and 5) reinvesting in the Company’s employees and culture. MedMen believes the Company can execute this plan while still growing its retail presence and maintaining a best-in-class retail experience.”
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 a strategic plan to achieve its target of positive EBITDA by the end of calendar year 2020.
The stock has suffered a bit of late, with shares of MMNFF taking a hit in recent action, down about -31% over the past week. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -30%. What’s more, the company has registered increased average transaction volume recently, with the past month seeing 71% over what the stock has registered over the longer term.
“We have a clear plan to increase our market share, while at the same time enhancing our margins and reducing our corporate overhead,” said Adam Bierman, MedMen co-founder and chief executive officer. “We must unlock our operating leverage and bring the Company to positive EBITDA. Given market conditions, capital allocation is more critical than ever. As such, we announced a layoff of over 190 MedMen employees. This layoff includes many hard working, mission-based people whose presence will be sorely missed. While it is never easy to let employees go from the MedMen Family, we believe this decision is in the best interest of our Company as we position ourselves for growth in the years ahead. We thank everyone for their hard work and dedication to MedMen, and we will now set our sights on achieving positive EBITDA by the end of calendar year 2020.”
Now commanding a market cap of $160M, MMNFF has roughly $23.7M in cash on the books, which stands against about $84.4M in total current liabilities. One should also note that debt has been growing over recent quarters. MMNFF is pulling in trailing 12-month revenues of $130M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 15%. As more color becomes clear on the name, we will review the situation and update our take. 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.