MedMen's Big Revenues Come At A Big Cost

MedMen Enterprises (MMNFF) reported fourth quarter revenues of $20.6 million, an increase of 1,317% over last year’s $1.5 million and a 44% sequential increase over the third quarter revenue of $14.3 million. The jump was attributed to the number of stores that came online during the quarter. However, operating expenses for the fourth quarter, including SG&A, was $72.6 million.

For the fiscal year 2018, MedMen delivered revenue of $39.8 million, an increase of 1,390% from 2017’s revenue of $2.7 million. For the fiscal year, MedMen recorded a net loss of $66.6 million, or $2.77 per basic and diluted share.

The gross profits for the year were  $13.1 million, as compared to gross profit of $868,000 in 2017. It cost $26.6 million to achieve the $39 million in sales and the loss from operations was $96 million for the year. The net loss and comprehensive net loss attributable to MedMen was $112 million for the year.

“Since becoming a public company in May of this year, we’ve been singularly focused on our vision to mainstream marijuana and I’m proud to say that our hard work and the significant investments we’ve made in building our operating platform and team are paying off,” said Adam Bierman, MedMen’s chief executive officer, and co-founder. “For fiscal 2018, we delivered solid revenues of almost $40 million and over half of that was in the fourth quarter alone, indicative of the strong momentum in our business and our growth potential.”

The high level of expenses was explained as significant investments in building the company’s infrastructure and personnel in order to execute its strategy for long-term growth. According to the company statement, operating expenses for the fourth quarter, including SG&A, were $72.6 million. SG&A expenses included $4.7 million in marketing and branding, $13.6 million for salaries and benefits, of which $3.9 million was retail related.

The company statement said that SG&A expenses for the fourth quarter also included a one-time expense related to the company’s RTO of $2.7 million, acquisition-related costs of $3.5 million and a $30.8 million non-cash stock-based compensation and employee incentive plan expense.

With regards to the balance sheet, MedMen is in good shape with cash and cash equivalents of $79.2 million and total debt at $56 million.

After The Quarter

Earlier this week, MedMen up-listed from the OCTQB Venture Market to the OCTQX Best Market. Prior to that, it announced plans to acquire PharmaCann in an all-stock transaction valued at $682 million. That deal will double the number of states where MedMen has licenses to 12.

MedMen expanded its footprint into Northern California with the pending acquisition of two licensed dispensaries in San Jose and Emeryville. It also entered the Illinois market and the  Arizona market through the pending acquisitions. The company also closed on a  major strategic acquisition of dispensary and cultivation in Florida.

Bierman added, “2018 is a year of many milestones, including the pending PharmaCann acquisition; closed and pending expansions to Northern California, Illinois, Arizona, and Florida; successes in accessing the capital markets; and the launch of our suite of [statemade] products and brand strategy. With our strengthened Board of Directors and management team, diverse asset base and strong balance sheet, we believe we are well positioned to capture the future potential of the evolving cannabis industry.”

Debra Borchardt

Debra Borchardt is the Co-Founder, and Executive Editor 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 Master's degree in Business Journalism from New York University.


  • Doug Cook

    October 29, 2018 at 11:00 am

    I am invested in MMNFF, Aleaf, ACB, and CGC.
    Down about $ 20,000.
    When do you think the cannabis companys will start to rebound ?


    • Debra Borchardt

      October 30, 2018 at 1:40 pm

      I don’t have a crystal ball and they did run up tremendously. I would think the next big news cycle would be when these companies begin reporting Q4 earnings in Jan/Feb. Sometimes you see markets pickup at the end of the year, but then there is tax loss selling that happens as well.


  • Eugene Presson

    October 30, 2018 at 1:06 am

    Respect and trust need to be earned. MedMen executives grabbed major profits from shareholders to line their own pockets. Now the Men are using debt to strive forward. Gut feeling says these people are not yet respected or trusted.


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