Discover more from Highly Objective
🎙️ Podcast: MariMed – President & CEO, Robert Fireman and CFO, Jon Levine
The Company started out writing application & consulting before stepping in to acquire these assets, which is ongoing. Though MariMed is a Tier III MSO, it has margins that stand out vs. peers.
In 2012, Bob Fireman and Jon Levine saw an opportunity to advise operators and licensees on the design, development, operations, and financing of new cannabis cultivation centers and dispensaries nationwide. They founded MariMed Advisors. As the market and their experience grew. The business evolved into MariMed, a vertically integrated multi-state operator (MSO) currently operating in five states — MA, IL, DE, MD, and NV.
MariMed has shown impressive results, growth, and profitability, but trades at a discount to peers (Tier III MSOs). In Q3 2021, the company reported revenue of $33.2M (54.8% GM), up 147% YoY, with Adjusted EBITDA of $12.9M (38.9% margin), Net income of $2.1M (6.3% margin). The Company also produced $10.7M of Cash Flow from Operations. Earlier this week, MariMed also pulled off a pretty notable publicity stunt (covered on Jimmy Kimmel Live, among others) in launching its Bubby’s Baked edibles — creating a 20,000 mg brownie for National Brownie Day.
The company seems to be making all the right hires and moves recently (after the $63M Gencanna write-down in March 2020) and management is certainly working to update the investor community on the new MariMed strategy/story. I spoke with CEO/President, Robert Fireman and CFO, Jon Levine to learn more about why they think they’re trading at a discount to peers right now.
CSE Listing. Much to my surprise, the Company isn’t yet listed on the Canadian Securities Exchange (CSE) and management believes they need it for additional exposure to investors. The Company also isn’t one of the holdings for ETF MSOS (which only holds 28 names as of today), which could also boost stock performance.
Brands. Leaflink List Wins.
Beverage and Ice Cream. The company’s product roadmap includes a powdered beverage mix (makes sense given success of Liquid IV and Hydrant, along with the ability to add to any liquid) and Ice Cream (makes less sense, but the company points to Cloud Creamery which is already in market and seems to have done well). The company also has an accompanying front loading (vs. top loading) freezer to limit the amount of shelf space the product takes up.
Market Mix. While most MSOs have a targeted region or focus on just medical or adult-use, MariMed focuses on a mix of geography and adult-use (MA, NV) and medical markets (MD, DE).
DE (2 out of 6 dispensaries) — a ~$37M market with ~12,600 patients. Three out of the six dispensaries were just awarded this year (out of 10 applicants). MariMed owns (or manages) 2 out of the 3 original operators with Columbia Care owning the other.
Investors. Navy Capital and Hadron have invested $60M+ into the company
Navy Capital invested $14.725M in November 2018
Hadron Healthcare Fund led a $46M financing facility in March 2021.The initial funding of $23M, will be used to repay substantially all of the Company’s long-term debt other than mortgage-backed loans as well as to upgrade and expand MariMed’s owned and managed cannabis facilities.
👋 The Highly Objective Podcast is hosted by Dai Truong. Third-party information presented here and links to third-party content are for informational purposes only and are not intended as a recommendation, offer or solicitation for the purchase or sale of any financial instrument, security or investment. The information provided is not warranted as to completeness or accuracy and is subject to change without notice. Linking to third-party sites in no way implies an endorsement or affiliation of any kind between Arlington Capital Advisors, LLC, or its affiliates and any third party. The information in this blog constitutes my own opinions (and any opinions posted by guest bloggers from time to time) and it should not be regarded as a description of services provided by Arlington Capital Advisors, LLC or any affiliate.