The Daily Buzz: Three Interesting Ways to Close Out the Week (MMNFF, CRLBF, HEMP)

admin - September 6, 2019

Medmen Enterprises Inc (OTCMKTS:MMNFF)is predicating its very existence on the fight for top-tier status in the US weed market. In that vein, the company just announced that it has closed its previously announced acquisition of MattnJeremy, Inc. d/b/a One Love Beach Club. According to the release, “this acquisition further enhances MedMen’s California footprint by adding a premier location strategically situated between the existing Santa Ana and LAX stores. Including pending acquisitions, MedMen is licensed for 17 stores across California, of which 13 are currently operational.”

Medmen Enterprises Inc (OTCMKTS:MMNFF) operates in the cannabis space in the United States. The company cultivates, produces, possesses, uses, and distributes/retails cannabis in the recreational and medicinal cannabis marketplace. As of June 6, 2018, it owned and operated 18 licensed cannabis facilities under the MedMen brand name in California, Nevada, and New York.

The company frames itself as “the preeminent cannabis company in the United States” with multiple assets and operations in California, Nevada, New York, and Florida. MedMen owns and operates licensed cannabis facilities in cultivation, manufacturing, and retail, and is one of the most well-recognized cannabis brands in the world today.

Headquartered in Los Angeles, MedMen employs more than 800 workers across the United States. It was founded in 2010 by Adam Bierman and Andrew Modlin, two visionary entrepreneurs who saw not just a tremendous business opportunity in the growing legalization of marijuana, but a chance to re-define our society’s relationship with cannabis. MedMen supports sensible, clear and just drug laws.

According to its most recent press release, “The Long Beach dispensary is located a few blocks away from the beach between Downtown and Belmont Shore and will also serve as a hub for the Company’s delivery launch across Long Beach and its surrounding communities. MedMen Buds, the Company’s nationwide loyalty program will also be available to all customers. As consideration for the Acquisition, the Company paid $13 million, of which $10 million was satisfied in Class B Subordinate Voting shares (“Shares”), $1 million in cash at closing and $2 million in deferred cash.”

MMNFF has about $12.2M in cash on the books, which must be weighed relative to a mountain of over $86M in total current liabilities. The company has been pulling in significant revenues, with over $7M in Q1 of this year, representing over 630% quarterly y/y growth on the top line.

A move back above the $2.10 area would constitute an extremely important near-term technical signal of strength. It’s worth a close eye right now at $1.99 into yesterday’s close.

 

 

Cresco Labs Inc (OTCMKTS:CRLBF)represents yet another pop in the cannabis patch so far this month.

Shares of the stock are having one of their best weeks of the year. The last major catalyst for the company was its release of unaudited financial results for the second quarter ended June 30, 2019, including Q2 revs of $29.9 million, revs up 253% year-over-year and 42% quarter-over-quarter, and pro forma revenue up 55% q/q to $52.7 million.

“We delivered an outstanding quarter that reflects the leading positions we have established in some of the most attractive markets in the cannabis industry,” said Charles Bachtell, Co-founder and CEO of Cresco Labs. “We are seeing accelerating revenue growth driven primarily by market share gains and strong trends in registered patients in our established markets of Illinois and Pennsylvania, as well as our expanded presence and distribution in California. As we scale our operations in our established markets, we are seeing the positive impact on gross profit margin that we projected. The higher revenue and margins helped to drive a substantial increase in Adjusted EBITDA compared to the prior quarter.”

CRESCO LABS ORD (OTCMKTS:CRLBF) trumpets itself as a company that manufactures and sells medical cannabis products in the United States. It offers cannabis dry flower; vaporizer forms of cannabis; cannabis oil in capsule, oral and sublingual solutions; cannabis in topical; and other cannabis products.

The company also provides cannabis infused edibles, including chocolate and toffee confections, fruit-forward gummies, and hard sweet and chews. Cresco Labs Inc. sells its products under the Cresco brand.

If you’re long this stock, then you’re liking how the stock has responded to the announcement. CRLBF shares have been moving higher over the past week overall, pushing about 14% to the upside on above average trading volume. Shares of the stock have powered higher over the past month, rallying roughly 25% in that time on strong overall action.

Cresco Labs Inc (OTCMKTS:CRLBF) pulled in sales of $40M in its last reported quarterly financials, representing top line growth of 42.9%. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($79.9M against $41.2M).

 

Hemp Inc (OTCMKTS:HEMP)powered 40% higher on Thursday to close at a new multi-week high. Let’s take a look at the situation.

After slogging through a rough trend this summer, the stock rocked higher on the company’s announcement that it has geared up to produce 20,000 hemp pre-rolls per day and, according to executives, is already preparing to increase that amount to 20,000 per hour.

According to the release, the company’s smokable product, to enter the marketplace, is a high-end, top quality product that is both effective and flavorful. With one pre-roll selling for $10 retail, coupled with the infrastructure already in place for fast production, Hemp, Inc. expects to bring in major revenue by quarter’s end. “Hemp, Inc. made the decision this year to grow hemp predominantly for a smokable product focusing on CBD levels and terpene profiles. While some of Hemp, Inc.’s harvest will go to biomass for oil and isolate production, a significant amount will be used in the production of smokable products. This vertical integration merges seamlessly with Hemp, Inc.’s processing facilities which specialize in drying and curing the flower for smoking,” said Bruce Perlowin, CEO of Hemp, Inc.

And the stock has been acting well over recent days, up something like 37% in that time. Hemp Inc (OTCMKTS:HEMP) generated sales of $490K, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of -68.6% on the top line. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($525K against $487K).

Hemp Inc (OTCMKTS:HEMP) produces products made from industrial hemp. The company also offers products and services to the medical and recreational marijuana industries.

It also develops and operates a website providing entertainment and news related to medical marijuana industry. The company was formerly known as Marijuana, Inc. and changed its name to Hemp, Inc. in June 2012. Hemp Inc. was founded in 2008 and is headquartered in Las Vegas, Nevada.

According to its own communications materials, the company’s long-term goal is to be the leader in the industrial hemp industry in America, which is now estimated to be over $500 Million. Hemp, Inc.’s mission is to provide green solutions that help make the world a better place to live.

The company apparently supports products that are eco-friendly, organic, healthy, and solutions that replace many petroleum-based products. In addition, Hemp, Inc.’s wholly owned subsidiary, Industrial Hemp Manufacturing, LLC, purchased the largest decortication plant in North America, which is located in Spring Hope, North Carolina. The plant is housed in a 70,000 square foot warehouse on 9 acres and is scheduled for completion in the last quarter of 2015.

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