After plunging to its all-time lows in late October, MedMen Stock (CSE:MMEN) (OTCQX:MMNFF) has reversed course and now looks destined for greater highs. The stock has notched two positive closings in the last three sessions, an indication of a bounce back. The recent gains have seen the stock pull up from the $1.00 bottom it sank to on October 31 to $1.20 on November 4. Notably, MedMen bounce back comes on large volume, showing strong investor interest in the stock.
About MedMen Stock
MedMen Enterprises was founded in 2010. It bills itself as a premium cannabis retailer. MedMen has operations across the United States and runs flagship stores in Los Angeles, Las Vegas and New York. MedMen says its mission is to provide an unparalleled experience that invites the world to discover the remarkable benefits of cannabis. The company believes that a world where cannabis is legal and regulated is not only safer, but healthier and happier.
The decline that took MedMen to its record lows begin unfolding on October 8. If we look at MedMen’s investor relations page and go to press release section where it publishes updates about its business activities and developments, we see that the company made several important announcements in October.
The first major announcement came on October 8, and in it MedMen informed investors that it decided not to proceed with its proposed acquisition of PharmaCann. MedMen announced its intention to acquire PharmaCann on December 24, 2018. MedMen provided several reasons why it decided not to proceed with the acquisition of PharmaCann, including that it has found a better way to create greater value for shareholders than purchasing PharmaCann. The company went on to state that terminating the proposed acquisition of PharmaCann will free up its balance sheet to allow it to invest more in building its brand and developing its retail network. Moreover, MedMen said it actually gained from terminating the merger agreement because it will now take PharmaCann’s retail and cultivation assets in Virginia and Illinois.
On October 28, MedMen made another major announcement. The company released financial results for its fiscal 2019, which showed triple-digit revenue growth and an impressive margin improvement. MedMen’s revenue for fiscal 2019 increased 227% from the previous year and gross margin jumped to 47% from 35% in the previous year. MedMen is currently making losses but the company has set its sight on profitability.
“Our success was due, largely in part, to our loyal customer base. Throughout the year, we served over one million customers from all 50 states and more than 100 countries. In California…MedMen surpassed a record $110 million in annualized run-rate retail revenue,” commented Adam Bierman, CEO of MedMen.
Another major announcement from MedMen came on October 29. On that date, MedMen provided an update on its credit facility arrangement with Gotham Green Partners. Specifically, MedMen said it amended the credit facility to minimize dilution to is stock and boost its balance sheet flexibility. Also in October, MedMen announced expansion of its retail footprint with the opening of new retail locations in Florida.
Investors ignore positive updates from MedMen leaving the stock to plummet to record lows from where it looks set for a strong comeback
The updates that MedMen provided in October did little to provide upward lift for its stock, as the stock moved up only a little but then resumed its downward spiral. However, if you analyze the charts, it is hard to dispute that MedMen looks set for a powerful bounce back from its current levels. And history supports that.
As it rebounds, MedMen has found critical support at $1.0. The stock’s immediate resistance stands at $1.4, which if breached should confirm a bounce back. Breaching this resistance should pressure short-sellers who bet against MedMen to rush to cover their positions before their losses mount. A rush by short-sellers to cover their position should create a powerful short squeeze in the market.
A look at the charts shows MedMen stock has rock solid support at the the $1 level. We believe that the lows are indeed in for MedMen stock and higher prices are ahead. When it comes to investing, it is important to pinpoint when a stock is about to break out, and we are at that point now.
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Disclosure: We have no position in MedMen stock 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…