Exclusive Interview with MariMed President and CEO Bob Fireman
“Bigger doesn’t mean better,” according to MariMed (OTCQX: MRMD) President and CEO Bob Fireman. Cannabis MSO MariMed doesn’t have the footprint of some of its peers, but it is profitable and looking to grow. Fireman spoke with New Cannabis Ventures about the company’s current market presence, interest in M&A and bringing more attention to the company. The audio of the entire conversation is available at the end of this written summary.
A History of Organic Growth
The MariMed management team has been together for more than 10 years. Over that time, the team has built the company from the ground up, winning licenses to develop the core business. The business was financed through real estate management licensing fees, according to Fireman. Then a year and a half ago, the team made the decision to consolidate its client operating business into a public company.
The first operations rolled into the public company are in Massachusetts. MariMed owns a 135,000-square-foot manufacturing facility in New Bedford. It has developed 70,000 square feet, and it has ramped up to more than 1,000 pounds per month in the Massachusetts market. The company has a dispensary in Middleborough and two more in development. Its Betty’s Eddies, Kalm Fusion and Nature’s Heritage are top-selling brands in the state.
Operations in Illinois have also been rolled into the public company. MariMed has been in the state since the inception of its medical program, and it won four licenses when the adult-use program launched. Three dispensaries are open, and the company is about to open a fourth location in Metropolis, Illinois, near the Kentucky border.
In Maryland, MariMed has developed a 180,000-square-foot facility for its client Kind Therapeutics, and it is opening a dispensary in Annapolis.
The company launched a pilot program in Delaware and exclusively ran it for two years, according to Fireman. It developed a 46,000-square-foot facility in Wilmington, and now, it is working on developing a 100,000-square-foot facility in Milford.
In Nevada, MariMed has a small cultivation operation that it is looking to expand.
A Growing Team
As an attorney and entrepreneur, Fireman has a long history of working with startups. His work with Sky Vegetables, a company focused on urban rooftop farming, led him to the cannabis space. His team members in New York introduced him to the business, and eventually, they took over a dispensary.
Fireman also got involved in the development of the Thomas C. Slater Compassion Center in Rhode Island, a medical dispensary. With the best practices learned through the initial work in the cannabis space, Fireman and his team formed the initial part of MariMed, winning licenses in Massachusetts, Maryland, Delaware, Illinois and Nevada.
MariMed’s core team includes Fireman, CFO Jon Levine and COO Tim Shaw. Levine has a background in finance and startups, as well as real estate. Shaw has in-depth experience in cannabis, helping to develop a team of people who understand genetics and growing cannabis. Fireman also highlighted Senior Vice President of Sales and Chief Product Officer Ryan Crandall, IT Director Joseph Khoury and Director Eva Selhub, MD.
The company has 277 employees, and it is looking to add more. MariMed is planning to add more people to its C-suite and launching a whole division focused on diversity.
Last year was transformative for MariMed, according to Fireman. The company secured a long-term financial partner: Hadron Healthcare Fund. The $46 million financing facility has enabled the company to pay off all of its debt, save for bank debt and one convertible note. MariMed has also been able to clean up its balance sheet and finish expansion work, giving it increased canopy and capacity across its footprint. The recent capital infusion is also helping it to do the next roll-ups into the public company.
The company is profitable, cash-flow-positive and has a financial partner to help it expand. This makes MariMed well-positioned for M&A, according to Fireman.
While it is ready to participate in industry consolidation, the team does not want to overpay for any assets. They will likely be looking for other entrepreneurs similar to themselves who have developed licenses in certain states. Any expansion the company does will be in the service of profit and earnings for shareholders.
Markets of Interest
MariMed is considering markets like Pennsylvania, New Jersey and New York. It is also currently in discussions in Ohio and Michigan. The company also plans to grow by licensing its brands to partners in other states.
U.S. Regulatory Landscape
Following the passage of the 2018 Farm Bill, MariMed made an investment in hemp with the intention of creating a leading position in the CBD industry. Fireman ultimately sees a place for CBD and other cannabinoids in improving formulations. But, following the collapse of CBD prices, MariMed is currently focused on its cannabis business.
With potential federal legalization in the near future, Fireman expects the industry to continue becoming more mainstream with brands and direct-to-consumer strategies growing in importance. He also hopes legalization will come with some form of protection for the industry, particularly as cannabis grown in places like Colombia is much less expensive than cannabis grown in the U.S.
Access to Capital
With the company’s new long-term relationship, it has access to capital to continue its plans for growth. Fireman is now looking to tell MariMed’s story to the marketplace. The company did approximately $50 million in revenue and $16.3 million in EBITDA in 2020. He considers MariMed’s stock undervalued and hopes to reach multiples more in line with the average of its peers.
In 2020, the company’s cannabis revenue grew more than 200 percent. Now, MariMed is offering guidance for the first time, forecasting revenue of $100 million in 2021. With the opening of more dispensaries and the potential for more roll-up activity, the company could do substantially more than $100 million in revenue, according to Fireman.
MariMed has an internal review of every one of its business units. It leverages major metrics like revenue, efficiency, earnings and expenses to drive the business forward.
Last year, the COVID-19 pandemic posed a major challenge in the industry, one that led to innovations in home delivery and curbside pick-up. This year, MariMed is looking to continue its growth with the addition of more dispensaries, increased capacity and brand expansion through licensing partnerships.
Fireman is hopeful that MariMed’s management team, genetics, products and access to capital are powerful differentiators that will drive the company’s success in 2021.
To learn more, visit the MariMed website. Listen to the entire interview: