MariMed Inc (OTCMKTS:MRMD) upside action has come under pressure, a move that has seen the stock relegated to a tight trading range. The stock has struggled to break past the $3 and $5 a share trading range, even on the broader cannabis sector turning bullish.
Share Price Analysis
While the company has announced plans to expand its footprint in New York among other states in pursuit of growth opportunities, the stock has continued to struggle to climb the ladder. In February, the company confirmed the conversion of $30 million in GenCanna Global debentures as part of an effort to deepen hemp CBD market commitment.The company has also sought to shore its sentiments in the market by announcing the formation of a subsidiary that would pursue growth opportunities in the Hemp sector. Even so, the stock has struggled to continue powering high, even as other cannabis stocks continue to register higher highs.After threatening to break through the $5 a share resistance level, the stock came down tumbling in what could as well be a minor correction, pending further movements on the upside. The stock appears to have found strong support at the$3.60 level from where it is showing signs of bouncing back to the top. MRMD Daily ChartAbove the $3.60 level, MariMed is a solid buy in continuation of the long-term bull trend. A rally followed by a close above the $5 a share level, should affirm the long-term uptrend. Conversely, a sell-off followed by a close below the $3.60 level, could see the stock plunging back to the $2.40 level.In our view, MariMed remains well positioned to continue powering high in line with the long-term uptrend.
About MRMD
MariMed is a consulting service provider. The company provides consulting services on matters design, development and optimization of medical cannabis cultivation. The company also develops facilities for use in the cultivation, production and dispensing of legal marijuana.
Why MariMed is destined for Greatness
Even on coming under pressure in recent months, MariMed is still destined for greatness. For starters, it is one of the companies that remain well positioned to benefit from the expected marijuana legalization in New York. Marijuana legalization in the state is gaining pace having received the endorsement of Governor Andrew Cuomo as well as residents who see it as an opportunity to support social and economic justice.MariMed has already confirmed plans to expand its footprint into New York to support its operations in neighboring states. The state’s cannabis market has big potential with initial estimates citing $1 billion worth of sales.
Debentures Conversion
The company has also confirmed the conversion of $30 million worth of Debentures, to GenCanna, to an equity stake. With the conversion, MariMed gains access to a dedicated supply of GMP-quality CBD from GenCanna to be used in the development of new products. The conversion will have a positive impact on MariMed net income, as it is entitled to GenCanna’s earnings in proportion to its equity share
“We are delighted that MariMed has converted its debentures into equity in our company. They are a great strategic partner and this conversion further aligns our shared interests. Our industry is growing rapidly. With strong partners like MariMed, we are confident we can extend our leadership position and set new standards for our products and services,” said Steve Bevan, President of GenCanna.
Hemp-Focused Unit
In addition, MariMed has confirmed the formation of MariMed hemp a subsidiary, dedicated to pursuing growth opportunities around hemp-derived products. The subsidiary is currently developing a pipeline of hemp-derived CBD products for the U.S market.
“With the recent signing of the U.S. Farm Bill that declared hemp fully legal at the federal level, we believe the hemp CBD industry may grow even faster than the cannabis industry,” said Robert Fireman, CEO of MariMed.
What Next For MRMD
MariMed has pulled back after skyrocketing to record highs early in the year. The pullback appears to be a minor correction, as the stock looks set to continue rallying in continuation of the long-term uptrend. The stock is an ideal play for investors eyeing opportunities in the cannabis sector, given that it is trading at a discount but with tremendous prospects going forward.We will be updating our subscribers as soon as we know more. For the latest updates on MRMD, sign up below!Disclosure: We have no position in MRMD and have not been compensated for this article.
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