MariMed Inc (OTCMKTS: MRMD) is one of the cannabis plays setting the pace in the multi-billion-dollar sector after delivering stellar financial results. The stock has started showing signs of taking off, after a period of consolidation, following a steep pullback from this year’s highs.
MRMD Catalysts And Share Price Analysis
In addition to stellar financial results, the confirmation that the company will be the exclusive distributor of the revolutionary DabTabs brand tablet on the east coast is another development fuelling the upward momentum. The company has also sought to strengthen its financial position by converting $30 million worth of debenture belonging to GenCanna Global to equity stake.The conversion according to the Chief Executive Officer, Bob Fireman, should deepen the company’s hemp CBD market commitment. Investors have reacted to the wave of positive developments pushing the stock up.With the stock finding support above the $3 a share level, the next resistance level as part of the emerging uptrend is seen at the $4 a share level. A rally followed by a close above the critical resistance level should open the door for the stock to make a run for 52-week highs of $5.80. MRMD Daily ChartConversely, a sell-off followed by a close below the $3 a share level would leave the stock susceptible to further drops, back to the $2.50 mark, the next substantial support level. A breach of the $2.50 support could give short sellers a reason to push the stock back to 52-week lows.
About MariMed
MariMed is a service provider focused on providing consulting services for the design, development, and funding of medical cannabis cultivation production and dispensary facility development. The company also develops and manages cannabis cultivation production and dispensing facilities.
Why is MariMed a Potential breakout play?
MariMed is threatening to break out after a period of consolidation as a solid financial report continues to strengthen investor’s sentiments in the stock. The company say’s revenue in Q4 grew 118% to $3.44 million compared to $1.58 million reported a year earlier. Full year revenue, on the other hand, was up 95% to $6.07 million.However, the company plunged to a full year net loss of -$13.6 million attributed to a non-cash amortization relating to equity compensation. Amidst the wider than expected net loss, the company ended the year with a much stronger balance sheet as cash and current assets more than tripled. Net cash from operations improved 78% to $3.6 million as debt to equity ratio improved to 0.34 from 1.93.
“We are encouraged that the Company maintained its strong operating performance and dynamic growth. We made a series of key investments to leverage opportunities we see for the years ahead, from branding and marketing to a major investment in GenCanna Global, perhaps the world’s leader in industrial hemp genetics and production,” explained Mr. Fireman.
Strategic Investments
In addition to revenue growth, MariMed also achieved critical milestones throughout the fiscal year key among them being strategic acquisitions and investments. The acquisitions and investments should go a long way in enhancing the company’s vertical integration as well as the competitive position and long-term profitability.For starters, MariMed made a strategic investment in Iconic Ventures consequently securing exclusive distribution rights in multiple states. The company also made a $30 million investment in GenCanna Global USA. With the investment, the company is poised to become the largest US producer of CBD derived from hemp.MariMed has also established a new division tasked with the responsibility of developing CBD brands and products. The division will also pursue high margin business opportunities as part of the company’s growth strategy.
“Our ongoing consolidation and these strategic investments position us for continued growth, geographic expansion, and brand development. We look forward to continuing rapid growth in the coming year,” added Mr. Fireman.
Bottom Line
MariMed has served a catalyst sure to strengthen market sentiments. A 118% increase in revenue underlines robust growth that should continue to support sentiments of further growth. Recent financial results provide clear evidence of a positive trend materializing.The company has also made strategic investments expected to fuel accelerated growth going forward as the company moves to expand its footprint into other US states. The stock is likely to continue its solid performance as investors react to a wave of positive developments that affirm long-term growth prospects.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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