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MedMen Enterprises (CNSX:MMEN) (OTCMKTS:MMNFF): A Bounce Play After Price Slump

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OTCMKTS:MMNFF

MedMen Enterprises (CNSX:MMEN) (OTCMKTS:MMNFF) has come under immense pressure if a 60% plus slide in share price, since the start of the year, is anything to go by. While the slide is a point of concern, the stock is slowly emerging as a potential bounce-back play having hit a bottom. A restructuring drive geared towards balancing the balance sheet is one of the developments that continues to affirm the company’s long-term prospects.

OTCMKTS:MMNFF Price Analysis

Likewise, the company has provided updated guidance in the wake of the restructuring drive that could signal the worst is behind. In addition, the company has enhanced its corporate governance underscoring the fact that management remains focused on value creation.

That said, the stock has started climbing the ladder after bouncing off the $0.40 support level. The bounce-back has come on renewed investor interest in response to the restructuring drive. Considering the bounce back, OTCMKTS:MMNFF needs to rise and find support above the $0.60 resistance level to reaffirm its breakout credentials.

Conversely, failure to take out the $0.60 resistance level could leave the stock susceptible to further drops. A breach of the $0.40 support level could trigger further sell-offs in continuation of the long-term descending trend line.

About OTCMKTS:MMNFF

MedMen Enterprises is a cannabis-focused company that cultivates, produces, and distributes recreational and medicinal cannabis across the United States. Headquartered in Culver City, California, the company operates over 34 retail stores for cannabis sales.

Lay-offs Drive

Following a poor run, OTCMKTS:MMNFF embarked on a restructuring drive that sought to reduce operating costs in a bid to shore the bottom line. The company has already laid off more than 190 workers and more than 40% of its corporate staff as part of the restructuring drive.

The layoffs were part of an effort that sought to lower spending on selling general and administrative efforts. Likewise, the company expects its annualized run rate on salaries to reduce to $65 million translating to $10 million in cost savings.

The layoffs have also coincided with the transfer of super-voting rights made up of 815, 295 Class A shares from co-founder and President, Andrew Modlin. The transfer is part of an effort that seeks to improve corporate governance.

According to the Chief Executive Officer Adam Bierman, the layoffs, as well as the Class A share transfer, affirms management ability to execute on capital allocation and cost-saving initiatives geared towards improving long-term growth.

“Our long-term investors have shown confidence in our strategic direction and industry-leading retail brand. With this strong level of support, we can now further focus management’s attention on maximizing our core assets while also reducing our corporate expenses to achieve positive EBITDA in the calendar year 2020,” said Mr. Bierman.

OTCMKTS:MMNFF Outlook

The restructuring drive comes high on the heels of OTCMKTS:MMNFF reporting a 105% increase in revenues in the first quarter. Amidst the increase, the company still fell short of analysts’ estimates of $47.9 million in sales. Similarly, the company plunged to a net loss of $31.5 million in the quarter compared to a net loss of $12.5 million reported a year ago.

Concerned by the widening net loss, the management has reaffirmed plans to build a more nimble and financially flexible company. The focus going forward will be on the right sizing the company and implementing strategies focused on enhancing free cash flow generation. The CEO expects the company to become more efficient to allow for better serving of the stakeholders.

For the current fiscal year, MedMen Enterprises expects its revenues to range between $225 million and $245 million.  For the 2021 fiscal year that begins in June 2020, the company expects revenues of between $450 million and $500 million.

Bottom line

The tide is slowly turning in favor of MedMen Enterprises after a rollercoaster 2019 that has seen the company shed a significant amount of market value. After bottoming out of the $0.40, the stock looks set to continue its solid performance as it continues to implement its restructuring plan.

The strengthening of the balance sheet, as well as the enhancing of corporate governance, underscores a company focused on generating long-term value. Likewise, impressive guidance for the 2020 and 2021 fiscal year affirms the company’s growth metrics.

That said, MedMen Enterprises looks set to continue climbing the ladder up after bottoming out from all-time lows.

We will be updating our subscribers as soon as we know more. For the latest updates on OTCMKTS:MMNFF, sign up below!

Disclosure: We have no position in OTCMKTS:MMNFF and have not been compensated for this article.

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Is Neptune Wellness Solutions Inc (TSE:NEPT)(NASDAQ:NEPT) A Good Bet Right Now?

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Neptune Wellness Solutions

There is no doubt 2019 was a tough year for the hemp/cannabis businesses. However, there are a few hemp/cannabis stocks that still managed to make their investors proud. Neptune Wellness Solutions Inc (TSE:NEPT)(NASDAQ:NEPT) is one of those stocks. Investors who put their bet on Neptune at a time like this saw their investment increase 130% by July of last year.

Neptune Wellness Solutions is already off to a strong start in 2020. The stock has gained more than 15% in the past week alone. Looking at how Neptune has positioned itself in the hemp/cannabis market, you cannot dispute 2020 is shaping up to be a great year for the stock. Then you notice that Neptune insiders are deeply invested in the stock. Insiders own more than 17% of all shares in the company. The company’s market cap of $280 million shows that insiders alone have sunk $48 million in the stock.

You are about to find out more reasons why Neptune Wellness Solutions looks to be a good pick right now. But first, here’s what you should know about the company we’re discussing.

About Neptune Wellness Solutions

Neptune Wellness Solutions has been around since 1998 and is headquartered in Laval, Canada. It is engaged in the extraction, formulation, and packaging of value-added cannabis products for both Canadian and global markets.

This is shaping up to be Neptune’s year for a number of…

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Is Tetra Bio-Pharma (CVE:TBP) (OTCMKTS:TBPMF) A Smart Pick?

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Tetra Bio-Pharma

Investors will remember that 2019 wasn’t a great year for cannabis stocks, especially Canadian stocks. Issues from uncertainty over Canada’s national elections to shortage of cannabis retail stores in Ontario greatly weighed on Canadian cannabis stocks last year. These problems are largely out of the way and investors can now spot cannabis stocks with a promising outlook in 2020. Tetra Bio-Pharma (CVE:TBP) (OTCMKTS:TBPMF) is one play poised for a big breakout in 2020 as its drug products go on sale.

Tetra Bio-Pharma is one of the most promising cannabis stocks in 2020 and investors have really warmed up to the stock. At $0.50, Tetra stock has already gained more than 60% year-to-date. But that is just the beginning and we feel there is a great story to tell here. First, however, it is important for investors to understand the company we’re discussing.

About Tetra Bio-Pharma

For investors who may have just come across Tetra Bio-Pharma for the very first time, this is a Canadian cannabis company. It is focused on developing cannabis-based drugs for a variety of conditions, including cancer.

Tetra Bio-Pharma about to begin commercializing its drug products

As a drug company, Tetra Bio-Pharma is insulated from many challenges that face conventional cannabis companies. For example, companies that make adult-use cannabis products must cope with cutthroat competition in the market. Moreover, Canadian cannabis companies have Continue Reading

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Why Investors Are Warming Up To Fire & Flower Holdings Corp (TSE:FAF) (OTCMKTS:FFLWF)

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Fire & Flower Holdings

The disastrous 2019 taught investors the importance of carefully screening cannabis stocks for great picks that can withstand industrywide shocks. That explains why investors are warming up to Fire & Flower Holdings Corp (TSE:FAF) (OTCMKTS:FFLWF) in 2020.

Fire & Flower Holdings has positioned itself to take full advantage of the recently expanded cannabis market under Cannabis 2.0. Investors are realizing that FFLWF is one pick that can make a huge difference in their cannabis portfolio. Fire & Flower Holdings has already gained more than 25% year-to-date, a testament to the strong investor interest in the stock in 2020.

About Fire & Flower Holdings

Fire & Flower Holdings is a Canadian cannabis company. It operates as a cannabis product retail chain. It operates a network of dozens of cannabis retail outlets in Canada. FFLWF currently has licenses to operate cannabis retail stores in Alberta and Saskatchewan provinces. In addition, it runs a cannabis distributor business in Saskatchewan.

Investors will no doubt remember that 2019 was a tough year for the cannabis sector, with a widespread collapse of many cannabis stocks big and small. That shows why in 2020 investors are looking for cannabis stocks that can deliver excellent returns and make them forget the pain of the past year. FFLWF has emerged as one of the favorite cannabis stock picks for investors early on in 2020. There are several reasons behind that and here are…

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