Strategically Building a Leading Cannabis Brand — CFN Media


MedMen

MedMen’s store in downtown Los Angeles.

CFN Media

SEATTLE, WA, April 03, 2018 (GLOBE NEWSWIRE) — CFN Media Group (“CFN Media”), the leading agency and financial media network dedicated to the North American cannabis industry, announces publication of an article covering MedMen Enterprises Inc., the leading cannabis brand in the United States with a focus on emerging markets like California, Nevada, and New York. With a strategic focus on states with regulatory restrictions in place, the company has built a national brand capable of generating high-margin revenue across medical and adult-use markets. A recent deal with Cronos Group, the NASDAQ’s first cannabis pure play company, highlights MedMen’s intentions to expand into the Canadian market with its class-defining retail experience.

The cannabis industry is projected to exceed $50 billion in the United States and C$22.6 billion in Canada over the coming years, according to Cowen & Co. and Deloitte analysts, driven by the legalization of medical and adult-use cannabis in a growing number of states. There are only a handful of companies that have already proven their ability to execute on this opportunity and grow.

Not All States Are Created Equal

The U.S. cannabis industry is projected to exceed $50 billion by 2026, according to Cowen & Co., driven by the legalization of medical and adult-use cannabis across a growing number of states. In fact, more than 90 percent of the country has legalized some form of cannabis, ranging from CBD-only medical to full recreational usage. While many states have adopted the same stance on the drug, not all markets are equal when it comes to investors.

Colorado, Washington, and Oregon were the first three states to legalize adult-use cannabis and they’ve taken a laissez-faire approach to the market. While cannabis businesses must be licensed, there aren’t explicit limits when it comes to how many can exist in the state. Other states have taken a regulated oligopoly approach to the market by limiting the total number of licenses, including California, New York, Nevada, Florida, and Ohio.

These regulated oligopolies create an opportunity to build businesses that have a regulatory barrier to entry. In addition to limiting competition, the licensing limits could translate to higher margins given the finite supply into the market. MedMen Enterprises is focused squarely on these markets where the company can build a durable advantage and maintain higher margins and revenue growth than more competitive states.

MedMen is Building an Empire

MedMen Enterprises began with the simple vision of creating cannabis consumer products. While the idea is simple, the focus on the consumer rather than the process changes how marijuana is cultivated, produced, and marketed. The company sought to build a business with unparalleled quality standards, industry-leading best practices, and a strong brand reputation. In other words, they wanted to become the envy of the cannabis industry.

Since then, the company has become the single most dominant cannabis enterprise in the legal cannabis industry. The experienced management team has broken into top consumer markets with a robust operational track record spanning the entire supply chain. The company has maintained full ownership over its licensed assets along the way while accumulating a comprehensive real estate portfolio under its stores – similar to retailers like Target.

The company’s operations can be divided into three segments:

  • Cultivation: The company has cultivation facilities in California, Nevada and New York. These facilities and others in the pipeline could generate more than 50,000 kilograms per year at attractive margins.
  • Production: The company has production and extraction space that could yield about 6,000 kilograms per year of extract. These facilities also adhere to strict food-grade standards to ensure the highest quality.
  • Retail: The company has 12 branded stores in California, New York and Nevada, with plans for additional outlets across the U.S. and Canada. It’s early mover advantage in sub-markets, like Los Angeles, Las Vegas, and New York City has also provided it with prime real estate locations.

Significant Long-term Potential

Companies operating in highly competitive markets could see declining margins and higher capex as they seek to expand operations. On the other hand, those operating in regulated oligopolies could see strong revenue growth as states ramp up the legal market and ultimately expand patient and consumer access to cannabis.

MedMen Enterprises is a premier opportunity to capitalize on the latter markets with a remarkable management team and strong operational history in place. In addition, the company has numerous upcoming catalysts as it builds out its cultivation, production, and retail capacity to meet growing demand in these states.

The recently-announced partnership with Cronos Group further extends MedMen’s reach and potential. Licensed producers in Canada, like the Cronos Group, have been scrambling to secure retail assets ahead of the country’s pending full legalization of cannabis for adult use. All of these producers have been operating in the medical cannabis world, and the new retail environment demands a radically different approach in terms of marketing, products, and locations. The joint venture, called MedMen Canada, brings the best of two industry giants together to launch MedMen’s proven retail experience across Canada.

Looking Ahead

MedMen Enterprises is a unique player in the burgeoning cannabis industry.  In a market characterized by letters of intent and holding companies, MedMen offers a tangible business and a strong brand with a growing presence across the supply chain.

For more information, visit the company’s website at www.medmen.com.

Please follow the link to read the full article: http://www.cannabisfn.com/medmen-strategically-building-leading-cannabis-brand/

About CFN Media

CFN Media (CannabisFN) is the leading agency and financial media network dedicated to the global cannabis industry, helps companies operating in the space attract investors, capital, and publicity. Since 2013, private and public cannabis companies in the US and Canada have relied on CFN Media to grow and succeed.

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A photo accompanying this release is available at:  http://www.globenewswire.com/NewsRoom/AttachmentNg/d2643432-07eb-4342-b967-2680d652ba2a

CFN Media
Frank Lane
206-369-7050
flane@cannabisfn.com



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