MariMed Inc. Prospects Up on New Agreement and Acquisition
MariMed Inc (OTCMKTS:MRMD) has seen its share price tumble since the broader markets sold off in May. While the rest of the market rebounded in June, the same cannot be said for the cannabis industry, which continues to search for some support. However, there are some cannabis stocks bucking the trend, and MariMed is one of them.
MRMD Stock Overview
MariMed Inc is one of the biggest multi-state seed-to-consumer cannabis and hemp companies in the U.S. It currently possesses 13 cannabis licenses for dispensaries, cultivation, and production in six states. (Source: “What We Do,” MariMed Inc, last accessed August 2, 2019.)
In addition to selling seven of its own branded cannabis products, MariMed is working to expand its licensing and distribution channels through additional markets that encompass thousands of dispensaries.
MariMed also recently formed a new division, MariMed Hemp, which is focused on the development of hemp-derived cannabidiol (CBD) products. To that end, in November 2018, the company made a strategic partnership with GenCanna Global, a Kentucky-based producer of CBD oils and isolates.
Arguably more important is the April acquisition of 70% of MediTaurus LLC, the name behind the “Florence” brand of CBD health and wellness products. The acquisition also gives MariMed access to MediTaurus’ extensive intellectual property. (Source: “MariMed to Acquire Majority Stake in International CBD Pioneer MediTaurus; Dr. Jokūbas Žiburkus Appointed MariMed Chief Innovation Officer,” MariMed Inc, April 25, 2019.)
This transaction is important for MariMed, as it helps kick start the company’s MariMed Hemp division with an established line of CBD health and wellness products and formulas, the global licensing of MediTaurus’ intellectual property, and an established network of European relationships.
|MRMD Stock Information|
|Market Cap||$350.9 Million|
|Shares Outstanding||212.6 Million|
|50-Day Moving Average||$1.83|
|200-Day Moving Average||$3.06|
(Source: “MariMed Inc. (MRMD),” Yahoo! Finance, last accessed August 2, 2019.)
It’s not a pretty chart, but it does echo what the rest of the industry is experiencing. MRMD stock started the year on an optimistic note, up 305% year-over-year. But like the rest of the cannabis industry, the company got a little ahead of itself.
MRMD stock faced headwinds during the May sell-off and continued to do so until late July, when it announced a new multi-state licensing agreement. Since then, the company’s share price has advanced approximately 60%.
Chart courtesy of StockCharts.com
Strong Q1 Results
On May 13, MariMed Inc announced that first quarter revenue, for the period ended March 31, 2019, increased 69% year-over-year to $3.5 million. Gross profit advanced 90% to $2.2 million, or 64% of revenue. (Source: “MariMed, Inc. Reports Strong 2019 First Quarter Results; Advancement of Strategic Initiatives,” MariMed Inc, May 13, 2019.)
The company reported a first-quarter net loss of $23,211, or breakeven per share. That’s a huge 99% improvement over the loss of $1.9 million, or $0.01 per share, in the same period last year.
Adjusted earnings before interest, taxes, depreciation, and amortization increased 76% to $585,000 from $332,000 in the same period in 2018.
MariMed ended the first quarter with total assets of $97.6 million, a 17.6% increase from $83.0 million at December 31, 2018. During the first quarter, the business raised $8.37 million, mostly from the sale of common stock and promissory notes.
MariMed Inc is one of the biggest players in the U.S. cannabis industry and thanks to recent developments, is expanding its footprint and long-term growth potential. It has consolidated its cannabis operations, opened new facilities, expanded the licensing of its own branded products, formed MariMed Hemp, and announced numerous acquisitions, a new strategic partnership, and a multi-state licensing agreement.
MRMD stock may be an overlooked, beaten-down penny stock, but it continues to report strong results and is set to take advantage of the marketplace when recreational cannabis becomes legal on a federal level.