MedMen Q2 Revenue Grows 39% from Q1 to $29.9 Million with Operating Loss of $61.8 Million

MedMen Reports Second Quarter Fiscal Year 2019 Financial Results
  • Increased revenue sequentially by 39% to $29.9 million.
  • Continued to perform favorably in California with eight retail locations reporting a combined $23.7 million in revenue, representing a 28% quarter-over-quarter increase.
  • Increased overall gross profit margin to 53%, compared to 45% in the previous quarter.
  • Appointed key personnel to the management team, including Michael Kramer as CFO.
  • During the quarter, closed on acquisition of vertically-integrated license in Scottsdale, Arizona and dispensary license in Emeryville, California.

LOS ANGELES, February 27, 2019–(BUSINESS WIRE)–MedMen Enterprises Inc. (“MedMen” or the “Company”) (CSE: MMEN) (OTCQX: MMNFF) (FSE: A2JM6N) today released its consolidated financial results for the second quarter of fiscal 2019. All financial information for the 13-week period ended December 29, 2018 is reported in U.S. dollars, unless otherwise indicated.

Management Commentary

Our strong second quarter results support MedMen’s commitment to drive strong retail and sales performance, while efficiently scaling the Company and executing on our growth strategy. As we emphasized last quarter, we are in a new phase of growth, one focused on continuing to operationalize our industry-leading retail footprint and increasing our profitability. We are confident in the team we’ve built to drive our success.

Adam Bierman, MedMen Chief Executive Officer and Co-Founder

After going public almost one year ago, MedMen has established a track record of growth and success. With approximately 7% market share in California, the largest cannabis market in the U.S., the Company is planning to open 16 new locations across the U.S. in calendar 2019. Of the 16 new locations, 12 will be based in Florida, where MedMen is licensed for up to 30 locations. Additionally, four retail sites in Florida are expected to open in the next 90 days in the following locations: Key West, Orlando, West Palm Beach, and St. Petersburg.

Second Quarter 2019 Overview

Financial Results:

  • Systemwide sales revenue of $29.9 million, which represents at 39.1% quarter-over-quarter increase over fiscal 2019 first quarter ended September 30, 2018.
  • Gross profit margin improved to 53% from 45% in the prior quarter due to unrealized gain on changes in fair value of biological assets.
  • Company’s eight retail locations in California reported a combined $23.7 million in revenue, a 28% quarter-over-quarter increase.

Corporate Developments:

  • Signed definitive agreement in December to acquire PharmaCann in an all-stock transaction. The transaction will double MedMen’s geographic footprint to 12 states, which account for over 50% of the U.S. population.
  • Expanded California footprint into Northern California through the signing of definitive agreements for the acquisitions of a retail license in Emeryville and a microbusiness license for retail, distribution, cultivation and manufacturing cannabis onsite in San Jose. The first transaction closed in Q2 2019 and the second transaction closed in Q3 2019.
  • Signed definitive agreement to acquire the retail operations and license for a store in Santa Ana, California, through an all-stock transaction with Captor Capital Corp. This location was already operating under the MedMen brand through a management contract. Transaction closed in Q3 2019.
  • Closed on acquisition of Omaha Management Services, LLC, which owns Monarch, a Arizona-based vertically-integrated medical license holder with a flagship retail location in Scottsdale, plus cultivation and processing operations.

Brand Strategy:

  • Launched a comprehensive suite of new cannabis products under the brand [statemade], which are currently being sold in MedMen’s Nevada stores.
  • Announced the completion of investment in California-based flower brand Old Pal, which provides every day, high-quality cannabis flower for customers.


  • Appointed Michael Kramer as chief financial officer. Mr. Kramer offers three decades of retail experience and has excelled in both operational and financial roles, including as CFO of high-profile retailers such as Apple Retail Inc., Forever 21, and Abercrombie & Fitch.
  • Appointed Ben Cook as chief operating officer. Mr. Cook has extensive experience leading omnichannel distribution, global market expansion and supply chain optimization. His experience executing complex strategies for global, high-growth companies, including Apple, Sam’s Club, and Target is invaluable to MedMen’s growing multi-state operations and expansion plans.

Capital Markets and Financing Activities:

  • Announced relationship with newly formed Treehouse Real Estate Investment Trust (“Treehouse”), a cannabis-focused REIT that has now raised $133 million to acquire properties from MedMen and other cannabis real estate.
  • Closed a $77 million senior secured term loan with funds managed by Hankey Capital and with an affiliate of Stable Road Capital.
  • Closed, on December 5, a $56 million bought deal equity financing, issuing 13,640,000 units at a price per unit of $4.11, with each unit being comprised of one Class B subordinate voting share and one Class B subordinate voting share purchase warrant. The exercise price of such warrants is US$5.16 per share and they are exercisable for a term expiring on September 27, 2021.
  • Uplisted to the OTCQX® Best Market by OTC Markets Group under the ticker symbol “MMNFF” on October 24.

Subsequent Events

Corporate Developments:

  • Closed acquisition of Seven Point, a licensed medical cannabis dispensary located in Oak Park, Illinois.
  • Closed acquisition of Kannaboost Technology Inc. and CSI Solutions LLC, collectively referred to as “Level Up,” in a cash and stock transaction valued at $33 million on February 12, 2019. Level Up holds licenses for two vertically-integrated operations in Arizona, including retail locations in Scottsdale and Tempe and 25,000 square feet of cultivation and production capacity in Tempe and Phoenix. The Company also received a 40% stake in top-selling brand K.I.N.D. Concentrates, which is currently distributed in over 90% of the dispensaries in Arizona.

Capital Markets and Financing Activities:

  • Completed the sale of three properties to Treehouse for net proceeds of approximately $18.4 million, after repayment of debt.

Second Quarter Fiscal Year 2019 Review

In an effort to increase transparency, provide a better understanding of MedMen’s business, and ensure sales comparability between years, the Company is basing accounting on the 4-5-4 calendar structure. Additionally, the Company is now breaking out performance in the MD&A by retail, cultivation and manufacturing, corporate SG&A and pre-opening expenses.

For the second quarter of fiscal 2019, systemwide revenue was $29.9 million. This represents a 39.1% quarter-over-quarter increase over the first quarter of fiscal 2019 ended September 30, 2018. Systemwide revenue, pro forma to include pending acquisitions that have not yet closed, would have been $49.5 million for the quarter.

Retail: Systemwide retail revenue for the quarter is based on 16 retail stores that were operational at the end of the quarter. This includes the MedMen Paradise location near McCarran International Airport in Las Vegas, which opened in October, and the MedMen Scottsdale location in Arizona, which began to be included in MedMen’s results in December following the closing of the Monarch acquisition.

Strong systemwide retail revenue for the quarter is primarily attributable to MedMen’s stores in Southern California’s recreational market. In California, the Company’s eight retail locations reported a combined $23.7 million in revenue, which represents a 28% quarter-over-quarter increase.

Cultivation and Manufacturing: For the second quarter of fiscal 2019, the Company reported a $4.9 million EBITDA loss for cultivation and manufacturing, of which approximately $4 million is related to costs associated with the Company’s first full-scale factory, Project Mustang in Nevada, which has already begun producing [statemade] products.

Corporate SG&A: During the second quarter, the Company continued to make significant investments in building the corporate infrastructure and team required to execute its strategy for long-term growth. Corporate SG&A includes corporate infrastructure and growth initiatives such as corporate payroll, sales and marketing, technology, among other things. Of the total $40.9 million corporate SG&A expenses, $14.4 million was corporate payroll, which included the buildout of several teams within the Company including finance and accounting, digital, business intelligence and marketing. SG&A expenses also included $8.6 million in marketing and branding as compared to $4.8 million in the first quarter of 2019.

Pre-Opening Expenses: The Company incurred $3.0 million of pre-opening expenses in the second fiscal quarter of 2019, primarily driven by rent expenses of retail stores, cultivation/manufacturing sites and facilities that are not yet operational.

Gross profit for the second quarter, before biological asset adjustment, was $13.3 million, as compared to $0.5 million in the second fiscal quarter of last year. For the second quarter, gross profit margin after biological asset adjustment was 53%, compared to 45% in the previous quarter.

For the second quarter 2019, the Company reported a total net loss of $64.6 million compared to a net loss of $66.5 million for the first quarter. Net loss per share attributable to the Company in the second quarter was $0.25 versus a net loss of $0.27 for the first quarter.


Additional information relating to the Company’s second quarter 2019 results is available in the Company’s Interim Financial Statements and related Management Discussion & Analysis (“MD&A”) filed on SEDAR at

MedMen refers to certain non-IFRS financial measures such as annualized sales per square foot, Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), Four Wall EBITDA, and adjusted EBITDA (earnings defined as earnings before interest, taxes, depreciation, amortization, less certain non-cash equity compensation expense, including one-time transaction fees and all other non-cash items). These measures do not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other issuers.

Please see the supplemental information (unaudited) regarding non-IFRS financial measures at the end of this press release and the MD&A for more detailed information regarding non-IFRS financial measures.


MedMen Enterprises will host a conference call and audio webcast with Chief Executive Officer and Co-Founder Adam Bierman and Chief Financial Officer Michael Kramer today at 5:00 pm Eastern to discuss the financial results in further detail.

Webcast Information:

A live audio webcast of the call will be available on the Events and Presentations section of MedMen’s website at:

Calling Information:

Toll Free Dial-In Number: (844) 559-7829
International Dial-In Number: (647) 689-5387
Conference ID: 9283806


MedMen is a cannabis retailer with operations across the U.S. and flagship stores in Los Angeles, Las Vegas and New York. MedMen’s mission is to provide an unparalleled experience that invites the world to discover the remarkable benefits of cannabis because a world where cannabis is legal and regulated is a safer, healthier and happier world.

Learn more at

California Market Share by Revenue

For the 13 weeks ended December 29, 2018, the State of California collected $50.8 million in excise taxes at a rate of 15%, which equates to approximately $338.7 million in retail sales according to the California Department of Tax and Fee Administration (see The Company’s California stores reported $23.7 million in revenue over the same period, which equates to an approximate 7% market share.

Original press release

Published by NCV Newswire
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