MedMen Reports $21 Million In Revenue, $66 Million in Losses

MedMen Enterprises (MMEN) (MMNFF) reported that its fiscal year 2019 first-quarter revenue grew 1,094% to $21.5 million over last year’s $1.8 million for the same time period. Still, the company reported a net loss of $66.5 million, or a loss of $1.42 per share, a dramatic increase over last year’s loss of $5.7 million for the same time period. This was a slight improvement over the net loss of $78.7 million for the fourth quarter last year.

“Our first quarter performance underlines the successful execution of our growth strategy and ongoing commitment to provide mainstream cannabis consumers a wide breadth of products for their lifestyle and wellness needs,” said Adam Bierman, MedMen chief executive, and co-founder. “Our four-pillars strategy – built around a quality team, superior assets, strong balance sheet and the ability to efficiently and effectively raise and deploy capital – has set us up to successfully achieve our vision. We are now entering a new phase focused on fully operationalizing our vast footprint.”

Revenue Breakdown

The company said that the systemwide revenue was drawn from operations in California, Nevada and New York. The statement read that the year-over-year increase was driven primarily by the opening of seven additional retail stores and strong results from the California market. The Company operated 14 locations at the end of the first quarter. Southern California accounted for 86% of first quarter systemwide revenue and 8 out of the 14 open retail stores at quarter end.

The company noted that the quarter was impacted by a state-wide supply chain challenge in California during the month of July. That was when new regulations went into effect and many of the original products on the shelf no longer met those requirements. They were sold at deep discounts and then destroyed if it didn’t meet new regulations.

MedMen said its gross profit for the first quarter were $11.7 million versus $5.9 million in the previous quarter. This represents a 98% growth rate. Gross profit margin in the first quarter was 54% compared to 29% in the previous quarter.

Expenses

Expenses in the first fiscal quarter were $72 million and SG&A  included $4.8 million in marketing and branding, $16.3 million for salaries and benefits. Furthermore, SG&A expenses for the first quarter also included $1.4 million acquisition-related costs and $24.9 million of cash and non-cash stock-based compensation and employee incentive plans expense and $4.7 million for the state, local and federal tax-related expenses.

MedMen had $63.4 million in cash and cash equivalents at the end of the quarter. While MedMen has been able to sell more shares to raise additional capital, the expenses continue to outpace the revenue. The last capital raise was cut almost in half as the price of the shares dropped before the deal could be completed. The CFO James Parker also recently resigned and the company appointed Jim Miller as interim chief financial officer.

Since Quarter End

Since the first quarter ended, MedMen got its foot into the Illinois market through the pending acquisition of a licensed medical dispensary in Oak Park. It acquired a northern California licensed dispensary in the City of Emeryville outside San Francisco on October 10.

The company intends to acquire PharmaCann in an all-stock transaction valued at $682 million. The transaction will double the number of states where MedMen has licenses to 12, which accounts for over 50%of the total estimated 2030 U.S. addressable market of $75 billion as stated by the Cowen Group. Combined, MedMen and PharmaCann would be licensed for 67 retail stores and 14 factories, including pending acquisitions by MedMen.

MedMen agreed to acquire control of Kannaboost Technology Inc. and CSI Solutions LLC, collectively referred to as “Level Up,” in a cash and stock transaction valued at $33 million. Level Up holds licenses for two vertically-integrated operations in Arizona, including retail locations in Scottsdale and Tempe and 25,000 square feet of cultivation and production capacity in Tempe and Phoenix.

 

Debra Borchardt

Debra BorchardtDebra Borchardt

Debra Borchardt is the CEO, Co-Founder, and Editor-In-Chief of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Masters degree in Business Journalism from New York University.


Leave a Reply

Your email address will not be published. Required fields are marked *

You may also like


About Us

The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


READ MORE



Recent Tweets

@GreenMarketRpt – 10 hours

Please help support Go visit our Patreon page

@GreenMarketRpt – 11 hours

$HARV.CN $HTHHF Harvest Forms $100 Million Joint Venture For Real Estate Projects

@GreenMarketRpt – 12 hours

$HEXO $HYYDF ⁦@Hexocorp⁩ Hexo Reports C$5.2 Million For Just Two Weeks Of Adult Use Cannabis Sales #earnings…

Back to Top

You have Successfully Subscribed!