As cannabis companies post their financial results to their cohorts of eager investors, analysts, and marijuana enthusiasts alike, many have seen dramatic increases in sales over the past quarter as well as on a year-to-date basis.
Los Angeles-based MedMen Enterprises Inc (CSE: MMEN) announced today it’s Q1 financial results, boasting a 1,088% increase in sales to $21.5 million in comparison to 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 CEO and Co-Founder Adam Bierman. “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.”
Gross profits for MedMen was $11.7 million, in comparison to $5.9 million from the previous quarter – a 98% growth rate. Once pending transactions are concluded, MedMen will have over 69 retail stores and licenses for 16 cultivation and production facilities across a dozen states in the U.S. They also hold 5.3% market share in California, one of the countries most established areas for cannabis use in the nation.
Other developments mentioned in the company’s financial results include the completion of its first “test crop” at their state-of-the-art production facility in Nevada as well as opening it’s first branded store in Las Vegas. When coupled with recently announced agreements to acquire PharmaCann and Level Up, MedMen’s already impressive retail presence is only expected to grow further in California and other states.
While year-to-date figures remain particularly impressive, the company only saw a 4.4% increase over the fourth quarter of fiscal 2018 – a slowdown that’s worrying to some. Most of this impressive growth has been from opening seven new retail stores and strong performance in California, which accounted for 86% of the first quarter’s revenue.
In stark contrast to these sales figures, MedMen’s stock has plunged substantially since Canadian legalization, falling around 48% percent despite positive news in the U.S. midterm elections in many states where the company operates. Originally, the company announced a deal to raise $120 million in Canadian currency by selling over 17 million shares at $6.80 each on November 30th.
In light of the company’s plummeting stock price, however, the company now expects that they will only raise CA$75 million. MedMen’s previous CFO resigned the same day the firm announced the updated financing figures, with their VP of accounting Jim Miller acting as interim CFO during the meantime.
Shares responded indifferently to financial results, ending today’s trading sessions at an 3.3% increase. Only time will tell whether or not the company’s stock price will return to previous levels along with whether or not MedMen can continue these stellar sales figures.
MedMen Enterprises Company Profile
MedMen Enterprises Inc. operates as a cannabis company. The Company owns and manages licensed cannabis facilities in cultivation, manufacturing, and retail stores. MedMen Enterprises serves biotechnology and pharmaceutical industries in the United States and Canada. – Bloomberg