MedMen Enterprises Inc. (“MedMen” or the “Company”) (CSE: MMEN) (OTCQB: MMNFF) (FSE: A2JM6N) announced today unaudited systemwide retail revenue for its fiscal 2018 fourth quarter ended June 30, 2018. Across the Company’s operations in California, Nevada and New York, systemwide retail revenue was US$19.2 million (CA$25.2 million). The Company is expected to post its audited fiscal 2018 full year results in October.
Strong systemwide retail revenue for the quarter is primarily attributable to MedMen’s stores in Southern California’s recreational market. Excluding its Abbot Kinney store, which opened in early June of this year, the Company’s other 7 retail locations reported a combined US$17.4 million in revenue (CA$22.8 million), with an average retail markup over wholesale of 90%. These 7 locations saw 94,000 new customers and nearly 130,000 returning customers, with an average spend per transaction of US$77.76 (CA$102.09), operating at an annualized per square foot revenue of US$6,541 (CA$8,470). By comparison, according to CoStar, the average sales per square foot for an Apple store is approximately US$5,546 (CA$7,282) and approximately US$2,951 (CA$3,875) for Tiffany & Co stores.1
MedMen continued to expand its operations in Nevada, successfully opening its first branded store in downtown Las Vegas in July and recently won approval to operate a second location near the Hard Rock Hotel, the Thomas and Mack Center and McCarran International Airport, set to open in October.
“Retail is the key to the fast-evolving cannabis industry. It is where brands are built and where the margins can be maintained,” said Adam Bierman, MedMen chief executive officer and co-founder. “The rapid revenue growth in our California stores, only six months into recreational sales, is a solid reflection of our continued execution of our business thesis. We will remain focused on our strategy and the kind of growth that generates long-term value for our shareholders.”
In conjunction with its growing retail footprint, MedMen’s strategy is to complement its operations in every market with robust vertical integration with the objective of better margins and overall control of the supply chain. During the fourth quarter, the Company opened its Project Mustang, a 45,000-square-foot, state-of-the-art cultivation and manufacturing facility in northern Nevada. The same factory design is currently being built in Desert Hot Springs, California, with completion scheduled for early 2019. The Company plans to build the same factories in New York, where it currently holds one of 10 medical marijuana licenses, and, if it closes its proposed acquisition, near Orlando, Florida. MedMen announced in July that it had entered into a definitive agreement to purchase a Florida license holder with a cultivation facility and rights to open 25 stores in that state.
MedMen Enterprises is a leading cannabis company in the U.S. with assets and operations across the country. Based in Los Angeles, MedMen brings expertise and capital to the cannabis industry and is one of the nation’s largest financial supporters of progressive marijuana laws. Visit http://www.medmen.com.
USD/CAD of $1.3130 as of August 13, 2018.
Cautionary Note Regarding Forward-Looking Information and Statements
This press release contains certain “forward-looking information” within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only MedMen’s beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of MedMen’s control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or may contain statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “will continue”, “will occur” or “will be achieved”. The forward-looking information and forward-looking statements contained herein may include, but is not limited to, information concerning plans for and the timing of new cultivation and manufacturing facilities, including in Florida, and the results of the Company’s strategy of vertical integration and expectations that MedMen’s proposed Florida acquisition will be completed.
By identifying such information and statements in this manner, MedMen is alerting the reader that such information and statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of MedMen to be materially different from those expressed or implied by such information and statements. In addition, in connection with the forward-looking information and forward-looking statements contained in this press release, MedMen has made certain assumptions. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking information and statements are the following: failure to obtain all necessary approvals with respect to MedMen’s proposed Florida acquisition, delays in opening new cultivation and manufacturing facilities, higher than expected costs to construct and operate cultivation and manufacturing facilities, adverse changes in the public perception of cannabis; changes in consumer demand for cannabis; decreases in the prevailing prices for cannabis and cannabis products in the markets in which the Company operates; adverse changes in applicable laws; adverse changes in the application or enforcement of current laws, including those related to taxation; increasing costs of compliance with extensive government regulation; changes in general economic, business and political conditions, including changes in the financial markets and in particular in the ability of the Company to raise debt and equity capital in the amounts and at the costs that it expects; risks related to licensing, including the ability to obtain the requisite licenses or renew existing licenses for the Company’s proposed operations; dependence upon third party service providers skilled labor and key inputs for purposes for example facility design and construction activities; risks inherent in the agricultural business; intellectual property risks; risks related to litigation; dependence upon senior management. Should one or more of these risks, uncertainties or other factors materialize, or should assumptions underlying the forward-looking information or statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected.
Although MedMen believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements. Key assumption used herein are that the revenue for the fourth quarter could be achieved in further quarterly periods over an annual period such that annualizing is reasonable; that vertical integration can be used to achieve cost efficiencies; that the Company has the requisite capabilities to execute on a vertical integration strategy; and that construction of new facilities will be on budget and not delayed. The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and MedMen does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws. All subsequent written and oral forward-looking information and statements attributable to MedMen or persons acting on its behalf is expressly qualified in its entirety by this notice.
Source: MedMen Enterprises
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