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.
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.
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.
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.
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.
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Disclosure: We have no position in OTCMKTS:MMNFF and have not been compensated for this article.
What Do Investors See In Medical Marijuana Stock (OTCMKTS:MJNA)?
Medical Marijuana Stock (OTCMKTS:MJNA) has emerged as one of many investor’s favorite pot stocks in the legal cannabis universe in 2020. The stock is already up about 10% in 2020, demonstrating how investors have warmed up to the stock early on in the New Year.
Following a disastrous 2019, cannabis investors lost money but have also learned that their best bets are stocks with strong fundamentals. They are looking for companies that have positioned themselves well in the cannabis industry and have what it takes to go for the opportunities. That is why MJNA stock is catching a lot of investor attention in 2020 because of how it has positioned itself in the cannabis market.
Robust revenue growth and strong financial position have also helped put MJNA on the radar of investors hunting for quality cannabis stocks. Revenue at MJNA more than doubled from $26.5 million in 2017 to $60 million in 2018. MJNA is also not in financial distress as may be the case with other cannabis companies out there. The company finished the third quarter, the most recent reported period, with $5.5 million in cash reserves.
Moreover, MJNA has recently taken steps to expand into new international markets and invest in companies that are leaders in their segments. These prudent actions are helping lift Medical Marijuana stock as more investors learn about them.
About Medical Marijuana stock
Is Tilray Inc (NASDAQ:TLRY) A Buy Or Sell?
For Tilray Inc (NASDAQ:TLRY) and the rest of cannabis stocks, 2019 was no doubt a bad year. But 2020 is shaping up to be a promising year for the stock. To start with, Tilray stock has already gained 8.35% year-to-date. If that says anything, it shows following the broad selloff in Tilray stock last year, we’ve got to a point where sellers are giving way to buyers in the stock.
There are several catalysts that should continue driving NASDAQ:TLRY as you’re about to see. First, below is a brief profile of the company we’re discussing.
Tilray is a Canada-headquartered global cannabis company. It is engaged in activities of cannabis cultivation and processing as well as marketing and distribution of cannabis products. Tilray already has several cannabis products brands to its portfolio. It operates across five continents through subsidiaries in Canada, Australia, Germany, and Portugal.
Following the broad collapse of cannabis stocks in 2019, investors are looking for cannabis stocks that can make a positive impact on their portfolios in 2020. Tilray stands out as an attractive cannabis stock pick in 2020. Here are some of the exciting things about the company.
Tilray CEO sees a bright future for the cannabis industry
On January 25, Tilray CEO Brendan Kennedy spoke on Bloomberg. In that interview, Kennedy framed a rosy outlook for the…
Is Cronos Stock (TSE:CRON)(NASDAQ:CRON) A Buy?
Cronos Stock (TSE:CRON)(NASDAQ:CRON) stock fell 9.22% on January 24, marking its steepest decline so far in 2020. The stock plunge followed an important disclosure that you would only expect from a company that is trying to be straight and transparent with investors. Here’s what happened.
On January 22, after market close, Cronos made a regulatory filing detailing changes in its executive team. In that SEC filing, Cronos revealed that David Hsu and William Hilson have stepped down as its chief operating officer and chief commercial officer, respectively. Unfortunately, some investors read bad news in the executive exits and sold their shares in Cronos.
But a careful reading of the filing doesn’t seem to raise any red flags. Therefore, the big stock plunged points to investors panicking to the degree of responding to a mosquito bite with a missile.
There is no doubt that 2019 was a difficult year for cannabis stocks and Cronos Stock is no exception. But before the uncalled for reaction to Cronos’s regulatory filing, we had been at a point where sellers were starting to give way to buyers in Cronos stock. The stock has gained about 8.0% in the past one month. It had gained more than 13% year-to-date before the January 24 big selloff.
About Cronos Stock
Cronos Stock is a Canada-based global cannabis company. Cronos operates through subsidiaries and…