MRMD stock surged higher into the close on January 2, 2020. The stock is attracting lots of buyers after the company’s increased revenue forecast for 2020.
On December 31, 2019, MariMed Inc. (MRMD:OTCQX), a leading multi-state cannabis and hemp operator focused on health and wellness, announced that MariMed and GenCanna Global, Inc. (owned 33.5% by MariMed) are both expecting increased revenues in 2020.
MariMed’s plan to consolidate the cannabis license companies it developed and manages is on track heading into 2020. To date, the Company has received state approval and has completed the transfer of licenses in Massachusetts and Illinois and approval from the State of Nevada is imminent. Massachusetts operations and revenue generation began this month and in Illinois, the state has legalized adult use. As a result, the operations in both states are expected to experience significant revenue growth in 2020. During 2019, under MariMed management, revenue of the cannabis managed businesses in Delaware, Maryland and Illinois have experienced strong growth. Following state approvals, the consolidation will allow MariMed to report the revenues from these other states in the Company’s consolidated financial statements.
This fall, GenCanna successfully completed one of the largest hemp harvests in US history and has begun to process over 14 million pounds of CBD-rich biomass. GenCanna had its challenges in 2019 when capital market conditions affected the funding of their expanded production facilities and operations, which resulted in some negative press towards GenCanna when the development of the new facilities was put on hold. A fire in early November at its main processing and lab facility in Kentucky impacted GenCanna’s 2019 production, revenue and cash flow.
As GenCanna has reported, it has established a joint venture with a processing facility in South Carolina that uses specialized technology to harvest large quantities of biomass into saleable full and broad-spectrum oils and isolates. This facility enables GenCanna to offer tolling agreements to farmers outside GenCanna’s farming network to process potentially millions of pounds of CBD biomass providing GenCanna with an incremental revenue source. Under this initiative, GenCanna will continue to be the one of the largest producers of GMP compliant CBD oils and isolates in the United States.
In addition to the ownership interest in GenCanna, the Company’s wholly-owned subsidiary, MariMed Hemp, has an agreement with GenCanna to brand and distribute hemp-derived CBD products. MariMed continues to optimize its investment in GenCanna by curating creative brands of CBD infused products that it markets and distributes to national retailers and physician’s networks. In addition, MariMed’s Hemp Engine is being rolled out to liquor stores, drug chain stores and C-stores initially in New England and soon across the country.
MariMed CEO, Bob Fireman noted, “We are pleased that GenCanna has the majority of their 2019 challenges behind them and that they are well positioned for revenue and related cashflow growth in 2020 driven primarily by their successful harvest. At MariMed Hemp, we continue to introduce new CBD brands and to expand our retail presence for our hemp-based CBD products supplied primarily by GenCanna. Our customers have developed a trust for the GenCanna brand and approach to quality which is reflected in our branded products. MariMed is also expecting a strong 2020 from our cannabis businesses as the consolidation will create new incremental revenue and long-term value for our shareholders.”
On December 11, 2019, MariMed received final authority from Massachusetts Cannabis Control Commission to commence RMD operations at its Panacea Wellness Dispensary in Middleborough. ARL Healthcare Inc., a wholly-owned MariMed subsidiary, plans to open two additional dispensary licenses in Massachusetts. The Panacea Wellness Dispensary in Middleborough, MA will open for medical use on December 19, 2019, at 10 AM. New Panacea patients can register directly at the state-of-the-art facility at 29 Harding St. beginning that day. The initial opening of Panacea Wellness will serve patients who hold a valid Medical Cannabis card in the state. There are over 60,000 patients enrolled in the Massachusetts medical cannabis program. The Company is expecting adult-use approval from the CCC within the next three months, pending a final inspection by the agency.