Why the Sparks Continue to Fly for Medmen Enterprises Inc
October 19, 2018
As possibly one of the best positioned names in the emerging US cannabis market, Medmen Enterprises Inc (OTCMKTS:MMNFF) has been one of our favorites as a cannabis play that can continue to run following the Canadian news. To further flesh out the story, the company just announced that it has reached agreement to sell a significant portion of its real estate assets to the newly formed Treehouse Real Estate Investment Trust.
According to the release, “Treehouse is a real estate investment vehicle that capitalizes on the cannabis industry’s continued growth; initial investors include real estate firms New England Development, Samuels & Associates and Visconsi Companies, in partnership with Stable Road Capital.”
Medmen Enterprises Inc (OTCMKTS:MMNFF) frames itself as a company that, together with its subsidiaries, 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.
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.
According to company materials, “MedMen Enterprises 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.”
As noted above, MMNFF just announced that it has reached agreement to sell a significant portion of its real estate assets to the newly formed Treehouse Real Estate Investment Trust. In all, recent action has seen 55% added to share values of the name over the past week of action.
Moreover, the company has witnessed a pop in interest, as transaction volume levels have recently pushed 330% above the average volume levels in play in this stock over the longer term.
“MedMen owns and controls some of the best real estate in today’s burgeoning cannabis industry and they will serve as an important seed portfolio for Treehouse,” said Brian Kabot, chief investment officer of Stable Road. “Given the investor interest in the sector, this vehicle made a lot of sense. More importantly, this creates liquidity and creates an efficient form of off-balance sheet financing to foster further growth for MedMen and others in the industry who wish to grow.”
At this time, carrying a capital value in the market of $488.36M, 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. As more color becomes clear on the name, we will review the situation and update our take.
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