MariMed Year-Over-Year Profits Sink, But Expansion Continues

MariMed Inc. (CSE: MRMD) (OTCQX: MRMD) lost $664,000 in the first quarter of 2023, a sharp drop from the $4.2 million profit the company posted in the same period in 2022.

The Massachusetts-based multistate operator posted $34.3 million in revenues for Q1 and had $21.5 million in cash as of March 31. That led CEO Jon Levine to boast of “another solid quarter” in a press release, in which he also highlighted MariMed’s four-year streak of positive operating cash flows.

“MariMed is one of the only companies in the cannabis industry to report positive cash flows and positive EBITDA over this extended period of time,” Levine said.

Chief Financial Officer Susan Villare called the Q1 results “very strong” and said leadership is “maintaining our positive outlook and guidance for 2023.”

“Our balance sheet remains conservatively leveraged and our ability to generate positive cash flows from operations remains a core strength of the company,” Villare said.

This year, MariMed is projecting:

• Minimum annual revenue of $150 million.
• Gross margin of “about 48%.”
• Capital expenditures of $30 million.

Also during the first quarter, MariMed closed a $35 million secured credit facility, with $30 million available immediately and another $5 million available in June, if necessary, all at an interest rate of 5.75% for three years. The funds will be used for capital improvements, acquisitions, and “other corporate expenses.”

In March, the company acquired a Massachusetts competitor, vertically integrated Ermont Inc. in Quincy. The retail portion of Ermont was rebranded to Panacea Wellness Dispensary, which is part of MariMed’s portfolio.

Then in April, MariMed opened its third medical cannabis shop in Massachusetts, another Panacea Wellness Dispensary in Beverly, and got its annual approval from Maryland regulators to continue producing high-dose 40-milligram medical edibles.