MedMen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF) delivered its financial results for the second quarter of 2020 ending December 28, 2019. Revenue across MedMen’s operations in California, Nevada, New York, Illinois, and Florida increased to $44.1 million for the quarter, up 50% year-over-year and 11% sequentially. The company stated that the revenue figures did not include the Company’s operations in Arizona, which are in the process of being divested and are classified as discontinued operations in the Company’s financials.
The net loss for the quarter was a staggering $96 million versus last year’s $64 million. The loss per share was ($0.09) versus last year’s ($0.23), so some improvement there.
“We feel positive about the progress made while remaining aware there is still substantial work to be done. The business is focused on the execution of a strategy to streamline operations, strengthen its balance sheet and bring in additional capital. The sustained power of the brand and consistent consumer loyalty is a regular reminder of our strengths and the opportunities within reach,” said Ben Rose, executive chairman of the Board and Chief Investment Officer of Wicklow Capital.
The total expenses for the quarter were $69 million, which the company managed to trim from last year’s $76 million for the same time period. The company reported an Adjusted EBITDA loss of $35.1 million for the quarter. The Adjusted EBITDA for the quarter does not include additional headcount reduction and retail optimization efforts the company executed on subsequent to the quarter-end. The company’s cultivation and manufacturing facilities contributed to $11.4 million of the total EBITDA loss.
“This is a pivotal time for the Company where we have the opportunity to re-assess the business and narrow the focus on what we do best – retail, to continue to cut costs and to execute on four-wall economics with a path to profitability,” said Ryan Lissack, Interim Chief Executive Officer. “I look forward to transitioning the company into its next chapter, which will be defined by financial discipline and strategic growth to drive long-term value creation for the Company and its stakeholders.”
Yesterday, MedMen entered into an agreement to assign its rights to acquire a licensed cultivation and manufacturing facility in Hillcrest, Illinois for $17 million which it received as part of its merger termination agreement with PharmaCann, LLC. As part of the Hillcrest Transaction, MedMen received an initial payment of $10 million and the second payment of $7 million is due prior to the closing of the Hillcrest Transaction, expected in the coming weeks.
The company announced two new independent board members and voted to keep former CEO and Co-founder Adam Bierman on the board.
Mr. Mel Elias, an active investor, entrepreneur, and developer in Los Angeles has past and present board experience in CPG and consumer retail businesses both in the US and internationally. He was President and CEO of The Coffee Bean & Tea Leaf for 6 years until it was sold in 2013.
Mr. Cameron Smith currently operates a private angel investment and advisory fund that focuses on health food. Prior to his investment and advisory business, Mr. Smith was General Counsel of The Island ENC, Inc., President of Quantlab Financial and worked at the SEC.