Marijuana stocks have been on a tear this year, with the biggest gainer being MRMD. In early October 2018, shares shot up from $0.59 to an all-time high of $1.50 in one day’s trading only to fall back down again by the end of November and continue their descent ever since despite strong fundamentals including partnerships signed worldwide and commercialization efforts ramping up across North America and Europe
Cannabis stocks continue to be the hottest sector in the market, as investors worldwide are trying to figure out what’s next. While some companies like Canopy Growth (NYSE:CGC) and Maricann Group (OTCMKTS:MRRCF) have been performing well this year, others such as MariMed Inc (OTCMKTS:MRMD), MedMen Enterprises, and Emerald Health Therapeutics disappointed shareholders with poor returns.
“MRMD stock forecast” is a company that has been up 500% YOY but could still double or triple. The company’s main product, MariMed Inc (OTCMKTS:MRMD), is a cannabis-focused company that was founded in 2014 and has been on the market since 2015. It is currently trading at $1.70 per share.
By B.Comm. George Leong Originally published on July 23, 2021.
MRMD Stock Shouldn’t Be Ignored
While we wait to see whether the Joe Biden administration will follow through on federal marijuana legalization, Connecticut just became the 19th state to do so.
Because millions of dollars of more tax money are at risk, state legislators have jumped on board the marijuana train.
MariMed Inc (OTCMKTS:MRMD), a vertically integrated producer of medicinal and recreational cannabis, is a micro-cap bet on the US marijuana industry with enormous capital-appreciation potential.
I appreciate MariMed stock’s potential at this early stage of the company’s expansion since it has facilities completed or under construction in six states: Delaware, Illinois, Maryland, Massachusetts, Nevada, and Rhode Island.
MariMed’s stock is up 500% year over year.
At first sight, the 500 percent year-over-year gain in MRMD stock seems overbought, but keep in mind that it has recovered from an all-time low of $0.13 a year ago.
MariMed Inc’s stock hit a 52-week high of $1.20 on June 3 before falling 28 percent to below $1.00.
After the frenzy-buying sparked by the legalization of recreational marijuana in Canada in October 2018, MariMed stock is far off its record $5.80 high.
StockCharts.com provided the chart.
MRMD stock has achieved numerous channel breakouts in the last year. MariMed stock has returned to its former channel after a breakthrough from $1.00 in May failed to hold. Look for support in the $0.55 to $0.60 range, which represents channel support.
I’m not sure MRMD stock will revisit these lower levels, but if it does, investors may wish to join or add to existing holdings.
If MariMed stock can rebound to $1.20, it has the potential to rise to $1.50 to $2.00.
StockCharts.com provided the chart.
The results of the first quarter point to strong growth.
In the first quarter of 2021, MariMed recorded its highest quarterly core revenue of $24.6 million, up 230 percent year over year. (Source: MariMed Inc, May 17, 2021, “MariMed Q1 2021 Results Reflect Highest Core Cannabis Revenue and Profitability.”)
Depending on the economic situation, the company’s sales have been increasing at a run rate of about $100.0 million for 2021 and may accelerate.
| a financial year | Earnings (Millions) | Growth |
| 2016 | $3.6 | N/A |
| 2017 | $5.1 | 70.3% |
| 2018 | $11.9 | 95.3% |
| 2019 | $45.6 | 284.8% |
| 2020 | $50.9 | 11.6% |
(Source: MarketWatch, “MariMed Inc.,” accessed July 22, 2021.)
MariMed must keep its cash burn under control until it can generate consistent earnings before interest, taxes, depreciation, and amortization (EBITDA) income and profitability.
MariMed Inc did generate EBITDA income of $16.7 million in 2020, after two years of negative EBITDA.
MariMed is on track to exceed its 2020 EBITDA with adjusted EBITDA income of $7.6 million in the first quarter of 2021.
| a financial year | EBITDA | Growth |
| 2016 | $877,480 | N/A |
| 2017 | $490,340 | -44.1% |
| 2018 | $3.4 Million in Loss | -786.5% |
| 2019 | -$37.7 MILLION $$$$$$$$$$$$ | -1,019% |
| 2020 | $16.7 million in total | 144.4% |
(MarketWatch, cited above.)
MariMed Inc was able to achieve GAAP earnings-per-share (EPS) profitability for the first time because to the increase in EBITDA income.
The business is on pace to increase its profitability this year, based on first-quarter earnings of $0.01 per share.
| a financial year | GAAP Diluted Earnings Per Share | Growth |
| 2016 | -$0.00 | 90.5% |
| 2017 | -$0.01 | -171.1% |
| 2018 | -$0.07 | -586.4% |
| 2019 | -$0.39 | -450.2% |
| 2020 | $0.01 | 101.7% |
(MarketWatch, cited above.)
The firm’s free cash flow (FCF) continues to be negative. That’s not unexpected, but MariMed Inc did reduce its yearly FCF deficit to $1.4 million in 2020, which is a considerable improvement.
The company’s chances of generating positive FCF in 2021 are reasonable. MariMed reported $6.8 million in cash flow from operations in the first quarter.
| a financial year | If you’re looking for a unique way to (Millions) | Growth |
| 2016 | -$3.6 | N/A |
| 2017 | -$19.2 | -439.3% |
| 2018 | -$11.8 | 38.4% |
| 2019 | -$34.3 | -190.1% |
| 2020 | -$1.4 | 96.0% |
(MarketWatch, cited above.)
Expert Opinion
MariMed Inc looks likely to post significantly stronger earnings for 2021 than for 2020, based on its first-quarter report, particularly with the economy recovering.
Furthermore, insiders have added 550,000 shares of MRMD stock in the past six months, indicating that they are becoming more optimistic on the company. (Source: Yahoo! Finance, “MariMed Inc. (MRMD),” latest viewed July 22, 2021.)
It’s a good idea to pay attention to what the insiders are doing. You don’t want to be looking back in a few years and wondering why you didn’t.
MariMed Inc (OTCMKTS:MRMD) is up 500% YOY but could still double or triple. The company’s stock forecast for 2021 is $2.00, which means the company will be worth more than $1 billion in five years if it meets its goal. Reference: mrmd stock forecast 2021.
Frequently Asked Questions
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