MariMed Reports Second Quarter 2024 Earnings


NORWOOD, Mass., Aug. 07, 2024 (GLOBE NEWSWIRE) -- MariMed Inc. (“MariMed” or the “Company”) (CSE: MRMD) (OTCQX: MRMD), a leading multi-state cannabis operator focused on improving lives every day, today announced its financial results for the second quarter ended June 30, 2024.

“With the first half of the year in the books, I’m pleased to say we remain on track to deliver our 2024 financial targets,” said Jon Levine, Chief Executive Officer. “Revenue growth in the second quarter of 2024 was very strong both year-over-year and sequentially, led by another tremendous quarter for our wholesale business. Our retail business also turned the corner, with a 24% increase in transactions year-over-year. While we continue to navigate the growth phase of our life cycle, and our results reflect a corresponding drag on margins and cash flow, we are pleased that we are already seeing margin improvements, particularly in our Illinois dispensaries. We are highly confident we will realize margin expansion and increased cash flow long-term as our new assets deliver their full revenue potential.”

Financial Highlights1

The following table summarizes the Company's consolidated financial highlights (in millions, except percentage amounts):

 Three months ended
June 30,
 Six months ended
June 30,
 
 2024 2023 2024 2023 
Revenue$40.4  $36.5  $78.4  $70.9  
GAAP Gross margin 42%  45%  43%  45% 
Non-GAAP Gross margin 43%  46%  43%  46% 
GAAP Net loss$(1.6) $(0.9) $(2.9) $(1.6) 
Non-GAAP Net (loss) income$(0.2) $0.6  $(0.8) $0.9  
Non-GAAP Adjusted EBITDA$4.4  $6.3  $9.0  $13.4  
Non-GAAP Adjusted EBITDA margin 11%  17%  12%  19% 
  
1 See the reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures and additional information about non-GAAP measures in the section entitled “Discussion of Non-GAAP Financial Measures” below and in the financials information included herewith. 
  

CONFERENCE CALL
MariMed management will host a conference call on Thursday, August 8, 2024 at 8:00 a.m. Eastern time, to discuss these results. The conference call may be accessed through MariMed’s Investor Relations website, or by clicking the following link: https://app.webinar.net/bWgXr1bNZB4.

SECOND QUARTER 2024 OPERATIONAL HIGHLIGHTS

During the second quarter, the Company announced the following developments in the implementation of its strategic growth plan:

  • April 9: MariMed announced closing the acquisition of an adult-use dispensary in Upper Marlboro, Maryland. This marks the second adult-use dispensary the Company owns in Maryland, and will commence retail sales upon receiving regulatory approvals, likely in 2024.
  • April 10: MariMed announced a partnership with two iconic Boston music venues, MGM Music Hall Fenway and Citizens House of Blues Boston. This groundbreaking partnership positions Nature’s Heritage as the exclusive cannabis sponsor at each venue. The brand will receive over one million consumer impressions resulting from onsite fan experiences, in-venue advertising, and digital advertising.
  • April 11: MariMed announced closing the acquisition of Thrive Dispensary in Casey, Illinois. The approval of the license transfer by the Illinois Department of Financial & Professional Regulation, and subsequent closing of the acquisition, allowed MariMed to fully consolidate the financial results of this dispensary, which had previously been operated under a Managed Services Agreement.

OTHER DEVELOPMENTS

Subsequent to the end of the second quarter, the Company announced the following further developments:

  • July 2: MariMed announced some operational and regulatory updates including:
    • Commencing adult-use sales at its Quincy, Massachusetts dispensary.
    • Receiving a provisional dual-license for its Tiffin, Ohio dispensary, which is required to commence adult-use sales, likely in 2024.
  • July 22: MariMed announced it commenced growing operations in its newly expanded cultivation facility in Hagerstown, MD. The new expansion should lead to a 100% increase in its flower yield, making MariMed one of the largest suppliers of flower in Maryland. The Company expects the first harvest to be on shelves throughout the state in the fourth quarter of 2024.
  • August 7: MariMed announced it had appointed Mario Pinho as the Company's Chief Financial Officer, effective August 9, 2024. Mr. Pinho is a CPA and finance executive with nearly 25 years of experience leading global organizations through various stages of dynamic growth. Most recently, he was CFO for the U.S. division of Rakuten, the global Internet Services, FinTech, and Mobile company. He led a team of 40 individuals across the globe in Financial Planning & Analysis, accounting, tax, procurement, and treasury; partnering with the CEO and senior leadership on M&A and other financial transactions; and leading the implementation of various systems and process improvements.

2024 FINANCIAL GUIDANCE

MariMed's full year 2024 financial targets are based on organic growth of its existing operating assets and do not include new revenue-generating projects requiring regulatory approvals. The Company believes this conservative approach to offering financial targets allows investors and analysts to focus on key operating milestones versus discussions around issues outside the Company's control. As such, the Company's full year 2024 financial targets remain at:

  • Revenue growth of 5% to 7%;
  • Non-GAAP Adjusted EBITDA growth of 0% to 2%;
  • Capital expenditures of $10 million.

DISCUSSION OF NON-GAAP FINANCIAL MEASURES

MariMed’s management uses several different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of its business, making operating decisions, and planning and forecasting future periods. The Company has provided in this release several non-GAAP financial measures: Non-GAAP Gross margin, Non-GAAP Net income (loss), Non-GAAP Adjusted EBITDA and non-GAAP Adjusted EBITDA margin, as supplements to Revenue, Gross margin, Net income (loss) and other financial measures prepared in accordance with GAAP.

Management believes these non-GAAP financial measures are useful in reviewing and assessing the performance of the Company, and when planning and forecasting future periods, as they provide meaningful operating results by excluding the effects of expenses that are not reflective of its operating business performance. In addition, the Company’s management uses these non-GAAP financial measures to understand and compare operating results across accounting periods and for financial and operational decision-making. The presentation of these non-GAAP measures is not intended to be considered in isolation or as a substitute for the financial information prepared in accordance with GAAP.

Management believes that investors and analysts benefit from considering non-GAAP financial measures in assessing the Company’s financial results and its ongoing business, as it allows for meaningful comparisons and analysis of trends in the business. In particular, non-GAAP adjusted EBITDA is used by many investors and analysts themselves, along with other metrics, to compare financial results across accounting periods and to those of peer companies.

As there are no standardized methods of calculating non-GAAP financial measures, the Company’s calculations may differ from those used by analysts, investors and other companies, even those within the cannabis industry, and therefore may not be directly comparable to similarly titled measures used by others.

Management defines non-GAAP Adjusted EBITDA as income (loss) from operations, determined in accordance with GAAP, excluding the following items:

  • depreciation of fixed assets;
  • amortization of acquired intangible assets;
  • Impairment or write-downs of intangible assets;
  • stock-based compensation;
  • legal settlements; and
  • acquisition-related and other expenses.

For further information, please refer to the publicly available financial filings available on MariMed's Investor Relations website, as filed with the U.S. Securities and Exchange Commission, or as filed with the Canadian securities regulatory authorities on the SEDAR website.

ABOUT MARIMED

MariMed Inc., a multi-state cannabis operator, is dedicated to improving lives every day through its high-quality products, its actions, and its values. The Company develops, owns, and manages seed to sale state-licensed cannabis facilities, which are models of excellence in horticultural principles, cannabis cultivation, cannabis-infused products, and dispensary operations. MariMed has an experienced management team that has produced consistent growth and success for the Company and its managed business units. Proprietary formulations created by the Company’s technicians are embedded in its top-selling and award-winning products and brands, including Betty’s Eddies, Nature’s Heritage, InHouse, Bubby’s Baked, K Fusion, Kalm Fusion, and Vibations, which are trademarks of MariMed Inc. For additional information, visit www.marimedinc.com.

IMPORTANT CAUTION REGARDING FORWARD-LOOKING STATEMENTS:

The information in this release contains “forward-looking” statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, which are subject to several risks and uncertainties. All statements other than statements of historical facts contained in this release, including without limitation statements regarding projected financial results for 2024, including management’s belief that it will report its fifth consecutive year of positive operating cash flow, anticipated openings of dispensaries and facilities, timing of regulatory approvals, plans and objectives of management for future operations, are forward-looking statements. Without limiting the foregoing, the words “anticipates”, “believes”, “estimates”, “expects”, “expectations”, “intends”, “may”, “plans”, and other similar language, whether in the negative or affirmative, are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

Forward-looking statements are based on our current beliefs and assumptions regarding our business, timing of regulatory approvals, the ability to obtain new licenses, business prospects and strategic growth plan, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated in these forward-looking statements due to various risks, uncertainties, and other important factors, including, among others, reductions in customer spending, our ability to recruit and retain key personnel, and disruptions from the integration efforts of acquired companies.

These factors are not intended to be an all-encompassing list of risks and uncertainties that may affect our business and results of operations. These statements are not a guarantee of future performance and involve risk and uncertainties that are difficult to predict, including, among other factors, changes in demand for the Company’s services and products, changes in the law and its enforcement, and changes in the economic environment. Additional information regarding these and other factors can be found in our reports filed with the U.S. Securities and Exchange Commission. In providing these forward-looking statements, the Company expressly disclaims any obligation to update these statements publicly or otherwise, whether as a result of new information, future events or otherwise, except as required by law.

All trademarks and service marks are the property of their respective owners.

For More Information Contact:

Investor Relations:
Steve West, Vice President, Investor Relations
Email: ir@marimedinc.com
Phone: (781) 277-0007

Company Contact:
Howard Schacter, Chief Communications Officer
Email: hschacter@marimedinc.com
Phone: (781) 277-0007

MariMed Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
 
  
 June 30,
2024
 December 31,
2023
 
Assets        
Current assets:        
  Cash and cash equivalents$10,192  $14,645  
  Accounts receivable, net 7,744   7,199  
  Inventory 31,139   25,306  
  Deferred rents receivable 593   630  
  Notes receivable, current portion 52   52  
  Investments, current portion    88  
  Due from related parties 233   105  
  Other current assets 3,101   3,407  
        Total current assets 53,054   51,432  
Property and equipment, net 93,977   89,103  
Intangible assets, net 20,404   17,012  
Goodwill 15,812   11,993  
Investments, net of current portion    221  
Notes receivable, net of current portion 814   814  
Operating lease right-of-use assets 9,219   9,716  
Finance lease right-of-use assets 4,151   3,295  
Other assets 11,103   12,537  
       Total assets$208,534  $196,123  
         
Liabilities, mezzanine equity and stockholders’ equity        
Current liabilities:        
  Mortgages and notes payable, current portion$3,871  $723  
  Accounts payable 11,854   9,001  
  Accrued expenses and other 5,048   3,549  
  Income taxes payable 16,387   14,434  
  Operating lease liabilities, current portion 1,965   1,945  
  Finance lease liabilities, current portion 1,534   1,210  
      Total current liabilities 40,659   30,862  
Mortgages and notes payable, net of current portion 69,504   65,652  
Operating lease liabilities, net of current portion 8,003   8,455  
Finance lease liabilities, net of current portion 2,665   2,140  
Other liabilities 100   100  
      Total liabilities 120,931   107,209  
         
Commitments and contingencies        
         
Mezzanine equity        
Series B convertible preferred stock 14,725   14,725  
Series C convertible preferred stock 4,275   4,275  
      Total mezzanine equity 19,000   19,000  
Stockholders’ equity        
Common stock 380   375  
Additional paid-in capital 172,842   171,144  
Accumulated deficit (102,904)  (99,955) 
Noncontrolling interests (1,715)  (1,650) 
      Total stockholders’ equity 68,603   69,914  
           Total liabilities, mezzanine equity and stockholders’ equity$208,534  $196,123  
  


MariMed Inc.
Condensed Consolidated Statements of Operations
(in thousands, except percentages and per share amounts)
(unaudited)
 
  
 Three months ended
June 30,
 Six months ended
June 30,
 
 2024 2023 2024 2023 
                 
Revenue$40,438  $36,519  $78,371  $70,899  
Cost of revenue 23,529   20,143   44,990   39,135  
Gross profit 16,909   16,376   33,381   31,764  
                 
Gross margin 41.8%  44.8%  42.6%  44.8% 
                 
Operating expenses:                
Personnel 6,958   5,619   13,423   10,275  
Marketing and promotion 1,856   1,666   3,618   2,812  
General and administrative 6,804   5,080   12,944   9,385  
Acquisition-related and other 350   425   434   615  
Bad debt (15)  39   (15)  (5) 
      Total operating expenses 15,953   12,829   30,404   23,082  
                 
Income from operations 956   3,547   2,977   8,682  
                 
Interest and other (expense) income:                
Interest expense (1,724)  (2,640)  (3,353)  (5,145) 
Interest income 25   115   51   214  
Other expense, net (30)  (10)  (50)  (910) 
      Total interest and other expense, net (1,729)  (2,535)  (3,352)  (5,841) 
                 
(Loss) income before income taxes (773)  1,012   (375)  2,841  
Provision for income taxes 866   1,947   2,556   4,440  
                 
Net loss (1,639)  (935)  (2,931)  (1,599) 
Less: Net income attributable to noncontrolling
interests
 12   23   18   4  
Net loss attributable to common stockholders$(1,651) $(958) $(2,949) $(1,603) 
                 
Net loss per share attributable to common
stockholders:
                
Basic$(0.00) $(0.00) $(0.01) $(0.00) 
Diluted$(0.00) $(0.00) $(0.01) $(0.00) 
                 
Weighted average common shares outstanding:                
Basic 379,514   361,261   377,362   352,079  
Diluted 379,514   361,261   377,362   352,079  
  


MariMed Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
 
  
 Six months ended
June 30,
 
 2024 2023 
Cash flows from operating activities:        
Net loss attributable to common stockholders$(2,949) $(1,603) 
Net income attributable to noncontrolling interests 18   4  
Adjustments to reconcile net loss to cash provided by operating activities:        
 Depreciation and amortization of property and equipment 3,946   2,247  
 Amortization of intangible assets 1,183   1,337  
 Stock-based compensation 492   505  
 Amortization of warrants issued to as payment for services received 218     
 Amortization of original debt issuance discount    131  
 Amortization of debt discount 175   1,607  
 Amortization of debt issuance costs 37     
 Payment-in-kind interest 69   299  
 Bad debt income (15)  (5) 
 Obligations settled with common stock 2   461  
 Write-off of disposed assets 36   906  
 Gain on finance lease adjustment    (13) 
 Loss on changes in fair value of investments 144   30  
 Changes in operating assets and liabilities:        
      Accounts receivable, net (530)  (1,449) 
      Deferred rents receivable 37   37  
      Inventory (5,833)  (5,309) 
      Other current assets 930   (1,497) 
      Other assets 1,919   359  
      Accounts payable 3,607   1,138  
      Accrued expenses and other 955   (535) 
      Income taxes payable 1,954   (1,874) 
           Net cash provided by (used in) operating activities 6,395   (3,224) 
         
Cash flows from investing activities:        
Purchases of property and equipment (8,336)  (8,786) 
Business acquisitions, net of cash acquired (4,250)  (2,987) 
Advances toward future business acquisitions (485)  (250) 
Purchases of cannabis licenses (623)  (601) 
Issuance of notes receivable    (879) 
Proceeds from notes receivable 13   87  
Due from related party (128)  (6) 
          Net cash used in investing activities (13,809)  (13,422) 
         
Cash flows from financing activities:        
Proceeds from term loan    29,100  
Proceeds from Construction to Permanent Commercial Real Estate
Mortgage Loan
 2,948     
Proceeds from mortgages 1,163     
Principal payments of term loan    (600) 
Principal payments of mortgages (138)  (404) 
Repayment and retirement of mortgages    (778) 
Principal payments of promissory notes (253)  (25) 
Repayment and retirement of promissory notes    (5,503) 
Proceeds from exercise of stock options    35  
Principal payments of finance leases (676)  (200) 
Distributions (83)  (81) 
  Net cash provided by financing activities 2,961   21,544  
         
Net increase in cash and cash equivalents (4,453)  4,898  
Cash and equivalents, beginning of year 14,645   9,737  
Cash and cash equivalents, end of period$10,192  $14,635  
  


MariMed Inc.
Reconciliation of Non-GAAP and GAAP Financial Measures
(in thousands, except percentages)
(unaudited)
 
  
 Three months ended
June 30,
 Six months ended
June 30,
 
  2024   2023   2024   2023  
Non-GAAP Adjusted EBITDA                
GAAP Income from operations$956  $3,547  $2,977  $8,682  
Depreciation and amortization of property and
equipment
 2,008   1,261   3,946   2,247  
Amortization of acquired intangible assets 809   780   1,183   1,337  
Stock-based compensation 248   299   492   505  
Acquisition-related and other 350   425   434   615  
Adjusted EBITDA$4,371  $6,312  $9,032  $13,386  
                 
Non-GAAP Adjusted EBITDA Margin (Non-
GAAP adjusted EBITDA as a percentage of
revenue)
                
GAAP Income from operations 2.4%  9.7%  3.8%  12.2% 
Depreciation and amortization of property and
equipment
 4.9%  3.5%  5.0%  3.2% 
Amortization of acquired intangible assets 2.0%  2.1%  1.5%  1.9% 
Stock-based compensation 0.6%  0.8%  0.6%  0.7% 
Acquisition-related and other 0.9%  1.2%  0.6%  0.9% 
Adjusted EBITDA margin 10.8%  17.3%  11.5%  18.9% 
  


GAAP Gross margin41.8% 44.8% 42.6% 44.8% 
Amortization of acquired intangible assets1.1% 1.2% 0.7% 1.0% 
Non-GAAP Gross margin42.9% 46.0% 43.3% 45.8% 
  


GAAP Net loss$(1,639) $(935) $(2,931) $(1,599) 
Amortization of acquired intangible assets 809   780   1,183   1,337  
Stock-based compensation 248   299   492   505  
Acquisition-related and other 350   425   434   615  
Non-GAAP Net (loss) income$(232) $569  $(822) $858  
  


MariMed Inc.
Supplemental Information
Revenue Components
(in thousands)
(unaudited)
 
  
 Three months ended
June 30,
 Six months ended
June 30,
 
 2024 2023 2024 2023 
Product revenue:            
Product revenue - retail$23,623 $24,336 $45,969 $47,519 
Product revenue - wholesale 15,868  11,031  30,373  21,407 
  Total product revenue 39,491  35,367  76,342  68,926 
Other revenue 947  1,152  2,029  1,973 
       Total revenue$40,438 $36,519 $78,371 $70,899