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Why Medmen Enterprises Inc (OTCMKTS:MMNFF) Could be Set to Rip

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Medmen Enterprises Inc (OTCMKTS:MMNFF) has been beaten down soundly over the past 6 weeks. The stock continues to set up very well from the standpoint of a move in US legislation. We see it as something like an option bet on US legalization with some serious potential pop. The company has set up strong operations in a footprint almost entirely south of the border.

If you’re looking for the catalyst to get it juiced up again, the company reported fiscal Q1 (2019) data on Thursday, announcing systemwide sales revenue of $21.5 million up 1,094% from first quarter fiscal 2018 and 4.4% from fourth quarter 2018; an annualized sales per square foot of $6,188 across eight stores in Southern California with an 82% conversion rate; and, according to recently published figures by the California Bureau of Cannabis Control, MedMen stores accounted for approximately 5.3% of all legal retail cannabis and cannabis product sales in the state.

Medmen Enterprises Inc (OTCMKTS:MMNFF), together with its subsidiaries, operates in the cannabis space in the United States.

MMNFF, more broadly, is a leading cannabis company in the U.S. with assets and operations across the country. Based in Los Angeles, MedMen brings expertise and capital to the cannabis industry and is one of the nation’s largest financial supporters of progressive marijuana laws.

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.

The Company is the single largest financial supporter of progressive marijuana laws at the local, state and federal levels, giving directly to pro-legalization groups, industry organizations and political candidates.

The company is headquartered in Culver City, California. MedMen Enterprises Inc. is a subsidiary of The Medmen Of Nevada 2 Llc.

Moreover, the company operates as a cannabis company in the United States. The company cultivates, produces, possesses, uses, and distributes/retails cannabis in the recreational and medicinal cannabis marketplace. It owns and operates 19 licensed facilities in California, Florida, Nevada, and New York. The company is headquartered in Culver City, California.

 

Monster Growth

We started off by noting that MMNFF just hit the wires with the announcement of the company’s quarterly numbers on Thursday. The big key here is the massive y/y top-line growth (over 1000% growth). If you pair this with the massive potential upside of a positive turn in federal legislation around cannabis in the US, you have an all-star play here.

This data, while obviously helpful, figures into a tape that has been defined by some heavy action, with shares of MMNFF dealing with some pressure, but coming back on the news to close the last five days more or less flat. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -23%.

“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 Adam Bierman, MedMen chief executive and co-founder. “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.”

Medmen Enterprises Inc (OTCMKTS:MMNFF) as about $12.2M in cash on the books against 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.

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Kushco Holdings Inc. (OTCMKTS:KSHB) Reaffirms Its F2019 Revenue Estimate Of Between $145 Million And $150 Million

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KushCo Holdings Inc. (OTCMKTS:KSHB) has reconfirmed its annual revenue guidance for the fiscal year that ended August 31, 2016, of around $145million to $150 million in sales.

Major milestones and initiatives in 2019

KushCo made significant milestones in fiscal 2019 after it launched several major initiatives. The company rebranded and changed its name to “KushCO Holdings Inc.” with its main operating subsidiary now being Kush Supply Co. It also opened new corporates headquarters in Cypress California.

The company opened a regional distribution center in Taylor Michigan and a product sourcing office in China. The company has enjoyed efficiencies and cost-cutting across its business thanks to the implementation of a new Warehouse Management System across the various warehouse locations.

In a bid to enhance its growth, KushCo joined the Sustainable Packaging Coalition and partnered with Sungrown and IEKO. This will enable it to provide combustible products to its growing consumer base. They also partnered with CA Fortune to introduce retail services to CBD and Hemp brands. KushCo also secured credit facility with Monroe Capital of around $50 million, which is the first for a cannabis company.

KushCo’s long term strategy focuses on creating more value for its customers

KushCO CEO and Chairman, Nick Kovacevich, stated that besides the significant milestones and the transformative initiatives; they have managed to equally grew their business, thus effectively positioning themselves for success. He said that KushCo’s revenue growth for the fiscal year remained strong.

The CEO indicated that the company is currently in a better position, and they are excited about it. He said that KushCO currently has the right people, customer base as well as a growth strategy to enable them to expand. Kovacevich affirmed that they are growing and executing because of the work they have put in establishing a foundation and their optimal long-term strategy, focusing on the creation of value to customers.

Cannabis businesses are partnering with KushCo because of the value they present. Kovacevich stated that they would continue doing everything to create more value for customers and remain key to their success.

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The Wait Is Over For MedMen Enterprises Inc.’s (OTCMKTS:MMNFF) Proposed Acquisition Of PharmaCann

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MedMen Enterprises Inc. (OTCMKTS:MMNFF) has announced the expiry of the waiting period concerning the proposed acquisition of PharmaCann under the HSR Act. The expiry of the waiting period under the act fulfills the condition necessary to finalize the transaction.

Acquisition to enhance MedMen’s geographical footprint

MedMen CEO and co-founder, Adam Bierman stated that this is a significant step in the cannabis industry. He said that he was optimistic that it would open the way for other companies in what is seen as a highly dynamic and acquisitive industry.

The CEO further affirmed that MedMen had created a desirable footprint which has positioned its brand among the best in the biggest cannabis market in the globe. He added that the acquisition of PharmaCann would make MedMen be even a bigger brand for consumers. With the acquisition, MedMen now doubles the number of states where it currently holds licenses. This further extends the company’s geographic footprint as well as creates a massive opportunity for MedMen shareholders. Bierman concluded by saying that they are delighted they are almost closing the transaction.

MedMen entered an agreement to acquire PharmaCann last year

The company announced in December last year that it had entered into a definitive business combination deal to acquire PharmaCann. In March this year per the HSR Act, the companies received a “Second Request” from the Antitrust Division in the Department of Justice. On August 9 PharmaCann and MedMen confirmed significant compliance with the request for additional information. The waiting period, according to the HSR Act expired on September 9, 2019. The period automatically extended for 30 days following the declaration of substantial compliance by the companies with the Second Request.

According to the terms of the transaction, PharmaCann stockholders will receive around 168.4 million shares of the combined company. This will be based on MedMen’s fully-diluted outstanding shares as of June 29, 2019. However, the total stock is subject to adjustment depending on the company’s fully-diluted outstanding stock as of the date of closing the transaction.  

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Valens Groworks Corp (OTCMKTS:VGWCF) Enters Five Year Contract With Iconic Brewing For Production Of Cannabis-Infused Beverages

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Valens GroWorks Corp (OTCMKTS:VGWCF) has announced that it has signed a binding five-year white label cannabis beverage deal with Iconic Brewing’s cannabis division. Iconic Brewing is one of Canada’s best innovative beverage companies.

Iconic Brewing to produce 2.5 million cannabis-infused beverages

The white label contract requires Valens to provide Iconic with formulation services, top quality extracts, as well as SoRSETM emulsion solution for its cannabis-infused drinks. On its part, Iconic Brewing will have the obligation of branding and marketing the final products across Canada.

According to the terms of the agreement, the company should produce at least 2.5 million cannabis-infused beverages over five years. There is an option of expanding the partnership with new product offerings soon.

Valens CEO, Tyler Robson indicated that the partnership with Iconic Brewing is a major milestone for Valens. This is because Iconic Brewing is among the fastest-growing beverage companies in eastern Canada, and therefore they will be vital in helping Valens in the creation of a new product line of cannabis-infused beverages.

Valens and Iconic Brewing seeks to leverage each other’s strength in production

Robson lauded the ability of Iconic Brewing to formulate and predict trends which he said are second to none. This is evident from the success of their current beverage products enjoy. Their offerings include Picnic Wine Co, Liberty Village, Cottage Springs Vodka Soda, and Cabana Coast. The CEO added that for Valens to service the agreement, it will employ its proprietary emulsion solution SoRSETM Technology. The technology creates oil-based ingestible products as well as beverages that offer a steady experience with quick onset and offset.

Iconic Brewing’s head of cannabis division, Cole Miller stated that they were delighted to partner with Valens to create a new product line of cannabis-infused drinks. He affirmed the company’s unwavering dedication to enhancing the safe and reliable experience for new cannabis users through their low dosage and unparalleled product education. He added that with the proprietary emulsion technology of Valen, they are ready to deliver their promise of creating the world’s best cannabis-infused beverages.

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