MedMen (CNSX: MMEN) has reported significant losses for the fourth quarter and also for the full year. However, the losses are attributed to aggressive moves to expand and become the largest US weed provider in the market, a move that will continue in the hopes to turn the tide of the company’s fortune.
MedMen announced plans to acquire PharmaCann, a medical cannabis provider, in early October. The move will allow MedMen to operate in 12 states and expand operations to 79 facilities. The proposed merger will expand the company’s reach within the US and allow them the opportunity to add scale to a currently vertical market plan.
The announcement came at a time when stocks were falling, and the trend has continued to hit MedMen in the wake of the announcement. However, with the recently acquired locations and licenses the company has worked to add to their economic arsenal, the tide may change.
MedMen operates 14 facilities in California, Nevada, and the state of New York. However, news for the business in recent months has included purchasing prime locations in Florida and acquiring a license to operate in the state (30 new stores to open), planning a new dispensary to open in San Francisco in the Bay area and the PharmaCann acquisition.
PharmaCann operates 10 stores and three facilities for cultivation and production in various states. The opportunity to fold these facilities into those already under MedMen operation will extend the reach of a company that is already touted as the ‘Apple’ of marijuana sales in the US. The company receives the comparison due to a similar business model that focuses on the visual appeal and trendy approach to marijuana sales, similar to what is used for an Apple store location.
These expansion opportunities may help to stem the tide of revenue loss for MedMen, which is up to $112.3 million from $15.4 million for the year. Meanwhile, revenue has increased from $2.7 million one year ago to $39.8 million currently.
These drastic changes come at a time when a new Chief Operating Officer was announced. Ben Cook took the reins for MedMen in October, making a change from previous positions at Sam’s Club, Target, and Apple.