MariMed Goes on the Hunt
Getting Aggressive in a Time of Distress in the Cannabis Industry
One of my larger cannabis investments, MariMed (OTC: MRMD) announced a $35 million credit facility deal that it can expand to $65 million and I think this is a big deal. In any other industry, this would be a big yawn. Why is it a big deal? Because growth capital is currently nonexistent in cannabis such that $5 million is a lot of money to raise, much less $65 million. And this allows MariMed to get aggressive at a time when everyone else is in distress or on their back foot.
I have written about MariMed before. I wrote up a detailed research report on it last year and have mentioned it as part of my Small Ball Strategy in cannabis. And frankly it exemplifies the nimbleness and ability for a small company to outperform its larger competitors. How else can you explain that MariMed’s Nature’s Heritage is the #1 flower in Massachusetts and they still can’t fill demand for it despite it selling for a premium price above the market?
Today, I hosted a Twitter Spaces with the CFO of MariMed, Susan Villare and we walked through just why MariMed is adding this credit facility now and how they plan to use this debt. Here is what I learned from my conversation with Susan:
1. MariMed is in the process of doubling capacity in Maryland ahead of legalization of adult use sales
2. The company is adding capacity in Massachusetts so they can meet demand for their Nature’s Heritage branded flower
3. They are bringing a kitchen online in Illinois this summer so they can reintroduce Betty’s Eddies line of edibles
4. MariMed is bringing a grow facility online to bring Nature’s Heritage flower to Illinois by year end
5. They are bringing a kitchen online in Missouri this summer
6. In a smart move, they are in the process of buying a dispensary that is bankrupt in Massachusetts
7. MariMed is adding dispensaries in Illinois and Ohio
8. The company is going to go from a workforce of 600 people to possibly 1000 by the end of 2024
9. Tremendous demand for Nature’s Heritage, Betty’s Eddies and Vibations brands is driving growth
Many think it is the end for cannabis now that Federal Reform died yet again last year, but nothing could be further from the truth. Study any emerging new industry and there are lots of booms and busts. The companies that are able to get aggressive in the tough times often emerge stronger and more resilient when the boom times return. MariMed is making its move and the result should be an exciting 2023/2024 of strong growth and healthy cash flows.
Click on the link below to listen to the recorded Twitter Spaces (the conversation starts about 1 minute in):
And further here is excellent interview with the CEO Jon Levine in which he says that “next year will be amazing.” And I agree, with everything MariMed is turning on this year, next year should be quite special.