Finding the next Jushi (549% 12-month return) – Part 5: MariMed

In Part 1, with the help of my Cannabis Investor Portal, I narrowed 29 cannabis stocks down to 11 companies with less than $400 million in market cap and a price-to-sales (P/S) of 5 or less. In Part 2, I eliminated the 5 companies I felt would do well in the future, but not gain 549% in the next 12 months. I will now cover the final six – each with their own article and analysis on why I think a 549% is possible. Hollister Biosciences was the first, Harborside was the second and now I review MariMed.

MariMed (OTCQX: MRMD)

Price target to gain 549%:  $4.45 (from $0.81)

Full Disclosure: I started a position in MariMed at $0.63.

MariMed is a Multi-State Operator (MSO) with 17 developed licenses in six states: Delaware, Illinois, Maryland, Massachusetts, Nevada, and Rhode Island. The company also designs and manages over 300,000 square feet of cannabis cultivation, production, distribution, and retail facilities.

Source: MariMed investor presentation.

2021 will be the first year MariMed realizes medical and adult-use cannabis revenue in Massachusetts. They own a 70,000 square foot grow facility that produces 1,000 lbs of cannabis per month. MariMed sells wholesale in the state, owns one dispensary, and expects to open two more dispensaries in 2021.

2021 also will be the first full year of revenue from three dispensaries in Illinois with a fourth dispensary expected to open soon. One dispensary is located in southeastern Illinois near the Kentucky, Tennessee, and Missouri borders – snatching customers from states that haven’t fully legalized marijuana. In Maryland, Betty’s Eddies fruit chews product has expanded to more than 80 dispensaries state-wide.

MariMed also earns money from managing cannabis facilities in Delaware, Maryland, and Nevada and is in the process of consolidating these assets. They also recently announced medical distribution in Puerto Rico.

Financials

MariMed is one of the fastest-growing cannabis companies in the world growing revenue annually by 220% year-over-year and 41% quarter-over-quarter. Their gross margins are excellent at 64% and the company has 33% EBITDA margins. While the company’s annualized revenues stand at $54 million dollars, the MariMed leadership has provided $100-$200 million in revenue guidance once their Maryland, Nevada, and Delaware assets are consolidated. With a current market capitalization of $280 million, their future price-to-sales (P/S) would be less than 2 with $150 million in revenue. If MariMed management executes at the $150 million revenue mark, MariMed’s P/S would sit around under 2. The current industry P/S average is 10. If MariMed caught up to the industry average the stock price would increase almost 549% – if management achieves $200 million in revenue then you likely have more than the next Jushi.

Up next: Cansortium.

NOTE: Micro-cap stocks are speculative in nature and this article should not be considered advice to buy the stock. Do your own research and consult a financial expert before investing.

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