MedMen Reports 55% YoY Increase In Q4 2021 Revenue, Continues 2.0 Growth Plan After Partnering With Tilray And Serruya Private Equity

Cannabis retailer MedMen Enterprises Inc. MMEN MMNFF reported its consolidated financial results Thursday for its fourth quarter and for the fiscal year ended June 26, revealing a 55.4% year-over-year and 18.5% sequential increase in revenue to $42 million in the last three months of 2021.

Tom Lynch, chairman and CEO of MedMen, said that the Los Angeles-based company "set a new record for quarterly revenue at MedMen, driven by broad-based increases in traffic and frequency of transactions across nearly all of our retail locations."

Over the quarter, MedMed managed to raise $10 million in additional gross proceeds via a private placement transaction with an institutional investor.

In August, the company revealed it had secured $100 million in financing through a private placement of its units. Investors, led by Serruya Private Equity, agreed to purchase $100 million of the Los Angeles-based company's units at a purchase price of $0.24 per unit.

Concurrently, MedMen disclosed that Tilray, Inc. TLRY acquired the majority of its's outstanding senior secured convertible notes that were initially held by certain funds affiliated with Gotham Green Partners LLC (GGP) and others.

Q4 2021 Financial Highlights

• Company-wide gross margin rate, a non-GAAP financial measure, totaled 46.9% compared to 40.5% in the previous period. The growth was mainly driven by the company's increased gross margin at its cultivation and manufacturing facilities.
• The retail gross margin rate was 54.9% versus 55.6% in the previous quarter.
• General and administrative expenses amounted to $33.5 million, representing a 13.7% decrease from the same period last year.
• Corporate selling,  general and administrative expenses, a non-GAAP financial measure, excluding store pre-opening costs, totaled $12.1 million, up by 9.7% from the previous quarter and down by 19.1% from the same period last year.
• Net loss was $46.2 million compared to a net loss of $9.7 million in the previous quarter, which prior quarter included a $32.7 million tax provision benefit.
• Retail Adjusted EBITDA margin rate from continuing operations, a non-GAAP financial measure, was 22% for the period.

Full-Year 2021 Financial Highlights

• Net revenue across the company's continuing operations in California, Nevada, Illinois, Arizona
• and Florida was $145.1 million, down 6.6% from the prior year, reflecting the impact of COVID-19.
• Company-wide gross margin rate, a non-GAAP financial measure, was 46.4% compared to 35.6% in the previous year.
• The retail gross margin rate was 54.7% versus 49.6% in the previous year.
• General and administrative expenses totaled $125.7 million, representing a 38.2% decrease from the previous year.
• Corporate selling, general and administrative expenses, a non-GAAP financial measure, excluding store pre-opening costs, totaled $42.6 million, down by 52.% from the previous year's total of $88.8 million.
• Net loss totaled $157.6 million versus a net loss of $526.5 million in the previous year, which included an impairment charge of $246.7 million.
• Retail Adjusted EBITDA margin rate from continuing operations, a non-GAAP financial measure, was 20% for the fiscal year 2021.
• As of June 26, MedMen had total assets of $472.5 million, including cash and cash equivalents of $11.9 million.

Price Action

MedMen's shares traded 8.51% higher at $0.325 per share after the market close on Thursday.

Photo: Courtesy of Austin Distel on Unsplash