Earnings: MedMen Q1 Revenue Increases 13% to $39.8M

MedMen Enterprises Inc. CSE: MMEN) MMNFF, a premier cannabis retailer with operations across the U.S., announced its financial results on Tuesday evening for the first fiscal quarter of 2022 that ended September 25, 2021.

First Quarter Financial Highlights:

• Net revenue across MedMen’s continuing operations in California, Nevada, Illinois, Arizona, and Florida was $39.8 million for the first quarter, a 13.4% increase year-over-year.
• Total gross margin was 43.9% in the first quarter, compared to 46.9% in the previous-year period.
• Total retail gross margin rate was 52.0% in the first quarter, compared to 53.8% in the year-ago period.
• General and administrative expenses (SG&A) were $37.2 million in the first quarter, a 22.2% increase from the same period last year.
• Corporate SG&A excluding store pre-opening costs totaled $14.6 million in the first quarter, a 42.6% increase from the year-ago period. The increase was largely driven by a $3.9 million increase year-over-year in professional fees as a result of litigation costs associated with previous officers of the company.
• Net loss was $55.3 million compared to a net loss of $21.9 million in the year-ago period.
• Retail Adjusted EBITDA from continuing operations was 17.3% compared to 15.1% in the same period of 2020.
• The Company executed definitive investment agreements to complete a majority investment in New York, subject to regulatory approval. New York operations are classified as discontinued operations.
• As of September 25, 2021, MedMen had total assets of $531.9 million, including cash and cash equivalents of $78.2 million.

“The past quarter we were able to deliver solid increases in year-over-year revenue despite sequential softening in the overall macro environment,” said Tom Lynch, MedMen chairman and CEO. “On the top-line, we outperformed Headset industry data in the majority of our markets, and we generated positive retail adjusted EBITDA for the fifth consecutive quarter. Additionally, shoring up our balance sheet during the quarter (and attracting strong partners in Tilray and Serruya) allows us to focus on executing our growth plan in the coming quarters, including plans to continue increasing our store footprint during fiscal 2022.”

In August, Tilray, Inc. TLRY, and MedMen announced that Tilray had acquired the majority of MedMen’s outstanding senior secured convertible notes that were originally held by certain funds affiliated with Gotham Green Partners, LLC (GGP) and others.

Price Action:

MedMen's shares closed down 0.44% and the stock was trading at $0.28 after the market closed on Tuesday.