MariMed Inc (OTCMKTS:MRMD) has been on an impressive run, ever since it reported an 81% increase in revenue in the first quarter. A 200% plus increase in share price over the past one month is a testament of renewed investor interest in the stock, which continues to trade in a steep uptrend.
After the meteoric rise, the big question now is whether the stock has what it takes to continue climbing high. Given that the stock is currently trading in a strong uptrend, it may be wise to wait for pullbacks, which in this case would act as good buying opportunities.
MariMed faces immediate support at the $3 a share level on any pullback, from which, the uptrend is likely to continue. A breach followed by a close below the $3 a share mark, could see the stock plummeting to the $2.40 level, seen as the next support level.
The stock is likely to continue powering high after minor corrections, given the strong fundamentals supporting the uptrend, as well as, a string of strong catalysts that the company has served in the recent past.
MariMed provides consulting services that help companies design, develop, and optimize cannabis cultivation and production. The company also develops and manages facilities for the production and dispensing of legal cannabis products under the Kalm Fusion brand.
Renewed investor interest in MariMed follows the announcement of an 81% increase in revenue in the first quarter, which once again underlined solid trajectory of year-over-year growth. Revenue came in at $1.15 million attributed to expanded operations of MariMed’s from real estate revenue as well as management fees and licensing fees.
“Our new Maryland cultivation and production facility, which came online in Q1, will bring increased rent, management, and licensing fees, adding to our existing revenue streams from facilities in Illinois, Delaware, and Nevada. We anticipate increases in our revenue from our assets as the cannabis business in Maryland and Massachusetts continues to expand,” stated Robert Fireman, CEO of MariMed Inc.
The company remains confident of further revenue growth as it moves to pursue new sales opportunities in Massachusetts. Cannabis legalization is set to come into effect in the state on July 1, 2018.
MariMed intends to supply dispensaries in the state with its marijuana products. The company has also hit the ground running as it looks to open its first dispensary in the state in the third quarter. Operations in the state should strengthen the company’s revenue stream from managed services and the leasing of cannabis facilities.
The company also expects incremental growth in licensing from new product lines as well as organic growth from product sales. According to the Chief Executive officer, plans are already underway to raise additional capital for new business and product development. MariMed is also eyeing strategic acquisitions that it hopes will strengthen its product line and competitive edge the booming business.
In addition to pursuing opportunities for growth in Massachusetts, MariMed has also expanded the licensing and distribution of its branded cannabis product line into Maryland. The products are to be produced by Kind Therapeutics US at the company’s 100,000 sq. State licensed medical marijuana facility.
MariMed developed the cultivation and production facility before leasing it to Kind Therapeutics. The facility has 11 grow rooms, producing world-class marijuana strains. Two harvests have so far been completed’ as well as organically grown flowers, oil extracts, and infused products. Kind Therapeutics is also tasked with the responsibility of distributing the products to approximately 35 dispensaries.
“This next-gen facility utilizes advanced eco-friendly, sustainable cultivation techniques to produce pesticide and contaminant-free medical marijuana that has the power to transform human health and wellness. We’ve had robust harvests and are thrilled with the results,” noted Timothy Shaw, MariMed COO and cultivation expert.
In addition, MariMed and Kind Therapeutics have debuted Nature’s Heritage Cannabis, a new branded line of organic Marijuana products set to strengthen revenue streams further.
What Next For MeriMed
MariMed has broken out of a tight a trading range that it had been trading in, for the better part of the first quarter. High turnover in traded shares in recent weeks is a testament of renewed and strengthening investor confidence in the company’s growth prospects.
The company has already proved it has what it takes to accelerate revenue growth if Q1 performance is anything to go by. Expansion of a licensing agreement with Kind Therapeutics should strengthen the company’s revenue streams throughout the year.
However, the pursuit of sales opportunity in Massachusetts is a catalyst that is expected to push the stock even higher, as the broader industry recovers from the first quarter slow down. That said MariMed has every reason to succeed, and any pullback should be viewed as a buying opportunity.
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Disclosure: We have no position in MRMD and have not been compensated for this article.