MariMed Reports Fourth Quarter and Full Year 2023 Earnings

NORWOOD, Mass., March 06, 2024 (GLOBE NEWSWIRE) — MariMed Inc. (“MariMed” or the “Company”) (CSE:MRMD) (OTCQX:MRMD), a leading multi-state cannabis operator focused on improving lives every day, today announced its financial results for the fourth quarter and year ended December 31, 2023.

“I am pleased to report another year of strong operational and financial performance,” said Jon Levine, Chief Executive Officer. “We had a record year with respect to revenue generation, particularly in wholesale, new asset openings, and leveraging our balance sheet strength to secure capital. We reported double-digit revenue growth for the sixth consecutive year and positive adjusted EBITDA for the fourth consecutive year. I believe MariMed stands alone among cannabis companies for the longevity of delivering these strong financial results. We anticipate continuing this track record as the commencement of wholesale operations in Illinois is contributing to a solid start in 2024, positioning us for outsized, long-term growth.”

Financial Highlights1

The following table summarizes the Company’s consolidated financial highlights (in millions, except percentage amounts):

 
Three months ended
December 31,
 
Year ended
December 31,

 
 
2023
 
 
 
2022
 
 
 
2023
 
 
 
2022
 

Revenue
$
38.9
 
 
$
35.8
 
 
$
148.6
 
 
$
134.0
 

GAAP Gross margin
 
45
%
 
 
44
%
 
 
44
%
 
 
48
%

Non-GAAP Gross margin
 
46
%
 
 
45
%
 
 
45
%
 
 
48
%

GAAP Net (loss) income
$
(10.1
)
 
$
4.8
 
 
$
(16.0
)
 
$
13.6
 

Non-GAAP Net income (loss)
$
1.4
 
 
$
5.2
 
 
$
(0.8
)
 
$
22.2
 

Non-GAAP Adjusted EBITDA
$
5.2
 
 
$
4.5
 
 
$
24.7
 
 
$
32.4
 

Non-GAAP Adjusted EBITDA margin
 
14
%
 
 
13
%
 
 
17
%
 
 
24
%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

1 See the reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures and additional information about non-GAAP measures in the section entitled “Discussion of Non-GAAP Financial Measures” below and in the financials information included herewith.

CONFERENCE CALL

MariMed management will host a conference call on Thursday, March 7, 2024 at 8:00 a.m. Eastern time, to discuss these results. The conference call may be accessed through MariMed’s Investor Relations website, or by clicking the following link: MRMD Q432 Earnings Call.

FOURTH QUARTER 2023 OPERATIONAL HIGHLIGHTS

During the fourth quarter, the Company announced the following developments in the implementation of its strategic growth plan:

October 11: MariMed announced the opening of Thrive Dispensary in Casey, Illinois, marking the fifth dispensary it owns or manages in that state, and the 12th dispensary it owns or manages across its five-state footprint. In response to the state’s request to open as soon as possible, the Company began operating the dispensary from a temporary mobile facility until regulatory approval for a permanent brick-and-mortar facility is received.
November 20: The Company announced a $58.7 million debt refinancing, lowering the Company’s weighted average cost of debt to an industry low 8%. Highlights of the deal include a 10-year term with a fixed 8.4% interest rate for the first five years, and interest-only payments for the initial 12 months. Principal payments calculated on a 20-year amortization schedule will begin in the 13th month and continue for the life of the loan. There are no pre-payment penalties. The deal resulted in ZERO dilution to shareholders – no new equity was issued.
December 4: MariMed announced commencement of operations at its new processing facility in Mt. Vernon, Illinois. The state-of-the-art facility contains an extraction lab to produce concentrates and a production kitchen for the manufacture of edibles and other derivative products. Later that month, MariMed’s began selling its branded products through the Company’s five Thrive Dispensary locations in the state, and began state-wide wholesale operations in January, 2024. The co-located cultivation facility is currently under construction and is expected to be completed in 2024.

OTHER DEVELOPMENTS
Subsequent to the end of the fourth quarter, the Company announced the following developments:

February 26: MariMed received Certificate of Occupancy from the Illinois Cannabis Control Commission to commence operations in its permanent brick-and-mortar facility for its Casey, Illinois adult-use dispensary. The Company anticipates transitioning from its temporary facility at the same location and commencing operations in the new facility during the first quarter of 2024.

March 6: MariMed announced expanded Maryland footprint with pending dispensary acquisition in Upper Marlboro. On February 1st, the Company entered into a definitive agreement to acquire the operating assets of Our Community Wellness & Compassionate Care Center, Inc, a medical licensed dispensary operator located in Upper Marlboro, Maryland. Total considerations were $5.25 million for the acquisition, which is subject to approval by the Maryland Cannabis Administration (“MCA”), will provide the Company with its second owned dispensary in Maryland. Upon MCA approval of the license transfer, MariMed will apply for an adult-use dispensary license to commence recreational dispensary sales.

2024 FINANCIAL TARGETS

MariMed’s full year 2024 financial targets are based on organic growth of its existing operating assets and do not include new revenue-generating projects such as commencing adult-use sales in Ohio, opening the new processing facility in Missouri, opening the new dispensary in Maryland, or acquiring other operating assets or licenses. The Company believes this more conservative approach to offering financial targets will allow investors and analysts to focus on key operating milestones versus discussions about issues outside the Company’s control such as construction or regulatory delays. As such, the Company’s full year 2024 financial targets are:

Revenue growth of 5% to 7%;
Non-GAAP Adjusted EBITDA growth of 0% to 2%; and
Capital expenditures of $10 million.

DISCUSSION OF NON-GAAP FINANCIAL MEASURES

MariMed’s management uses several different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of its business, and making operating decisions, planning and forecasting future periods. The Company has provided in this release several non-GAAP financial measures: Non-GAAP Gross margin, Non-GAAP Net income (loss), Non-GAAP Adjusted EBITDA and non-GAAP Adjusted EBITDA margin, as supplements to Revenue, Gross margin, Net (loss) income and other financial measures prepared in accordance with GAAP.

Management believes these non-GAAP financial measures are useful in reviewing and assessing the performance of the Company, and when planning and forecasting future periods, as they provide meaningful operating results by excluding the effects of expenses that are not reflective of its operating business performance. In addition, the Company’s management uses these non-GAAP financial measures to understand and compare operating results across accounting periods and for financial and operational decision-making. The presentation of these non-GAAP measures is not intended to be considered in isolation or as a substitute for the financial information prepared in accordance with GAAP.

Management believes that investors and analysts benefit from considering non-GAAP financial measures in assessing the Company’s financial results and its ongoing business, as it allows for meaningful comparisons and analysis of trends in the business. In particular, non-GAAP adjusted EBITDA is used by many investors and analysts themselves, along with other metrics, to compare financial results across accounting periods and to those of peer companies.

As there are no standardized methods of calculating non-GAAP financial measures, the Company’s calculations may differ from those used by analysts, investors and other companies, even those within the cannabis industry, and therefore may not be directly comparable to similarly titled measures used by others.

Management defines non-GAAP Adjusted EBITDA as income from operations, determined in accordance with GAAP, excluding the following items:

depreciation of fixed assets;
amortization of acquired intangible assets;
Impairment or write-downs of intangible assets;
stock-based compensation;
legal settlements; and
acquisition-related and other expenses.

For further information, please refer to the publicly available financial filings available on MariMed’s Investor Relations website, as filed with the U.S. Securities and Exchange Commission, or as filed with the Canadian securities regulatory authorities on the SEDAR website.

ABOUT MARIMED

MariMed Inc., a multi-state cannabis operator, is dedicated to improving lives every day through its high-quality products, its actions, and its values. The Company develops, owns, and manages seed to sale state-licensed cannabis facilities, which are models of excellence in horticultural principles, cannabis cultivation, cannabis-infused products, and dispensary operations. MariMed has an experienced management team that has produced consistent growth and success for the Company and its managed business units. Proprietary formulations created by the Company’s technicians are embedded in its top-selling and award-winning products and brands, including Betty’s Eddies, Nature’s Heritage, InHouse, Bubby’s Baked, K Fusion, Kalm Fusion, and Vibations: High + Energy, which are trademarks of MariMed Inc. For additional information, visit www.marimedinc.com.

IMPORTANT CAUTION REGARDING FORWARD-LOOKING STATEMENTS:

The information in this release contains “forward-looking” statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, which are subject to several risks and uncertainties.   All statements other than statements of historical facts contained in this release, including without limitation statements regarding projected financial results for 2023, including management’s belief that it will have its fourth consecutive year of positive operating cash flow, anticipated openings of dispensaries and facilities, timing of regulatory approvals, plans and objectives of management for future operations, are forward-looking statements.   Without limiting the foregoing, the words “anticipates”, “believes”, “estimates”, “expects”, “expectations”, “intends”, “may”, “plans”, and other similar language, whether in the negative or affirmative, are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

Forward-looking statements are based on our current beliefs and assumptions regarding our business, timing of regulatory approvals, the ability to obtain new licenses, business prospects and strategic growth plan, and other future conditions.   Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict.   Our actual results may differ materially from those contemplated in these forward-looking statements due to various risks, uncertainties, and other important factors, including, among others, reductions in customer spending, our ability to recruit and retain key personnel, and disruptions from the integration efforts of acquired companies.

These factors are not intended to be an all-encompassing list of risks and uncertainties that may affect our business and results of operations.   These statements are not a guarantee of future performance and involve risk and uncertainties that are difficult to predict, including, among other factors, changes in demand for the Company’s services and products, changes in the law and its enforcement, and changes in the economic environment. Additional information regarding these and other factors can be found in our reports filed with the U.S. Securities and Exchange Commission.   In providing these forward-looking statements, the Company expressly disclaims any obligation to update these statements publicly or otherwise, whether as a result of new information, future events or otherwise, except as required by law.

All trademarks and service marks are the property of their respective owners.

For More Information Contact:

Investor Relations:
Steve West, Vice President, Investor Relations
Email: ir@marimedinc.com 
Phone: (781) 277-0007

Company Contact:
Howard Schacter, Chief Communications Officer
Email: hschacter@marimedinc.com 
Phone: (781) 277-0007

MariMed Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)

 
December 31,

 
 
2023
 
 
 
2022
 

Assets
 
 
 

Current assets:
 
 
 

Cash and cash equivalents
$
14,645
 
 
$
9,737
 

Accounts receivable, net
 
7,199
 
 
 
4,157
 

Inventory
 
25,306
 
 
 
19,477
 

Deferred rents receivable
 
630
 
 
 
704
 

Notes receivable, current portion
 
52
 
 
 
2,637
 

Investments, current portion
 
88
 
 
 
123
 

Due from related parties
 
105
 
 
 
29
 

Other current assets
 
3,407
 
 
 
7,282
 

Total current assets
 
51,432
 
 
 
44,146
 

Property and equipment, net
 
89,103
 
 
 
71,641
 

Intangible assets, net
 
17,012
 
 
 
14,201
 

Goodwill
 
11,993
 
 
 
8,079
 

Investments, net of current portion
 
221
 
 
 
—
 

Notes receivable, net of current portion
 
814
 
 
 
7,467
 

Operating lease right-of-use assets
 
9,716
 
 
 
4,931
 

Finance lease right-of-use assets
 
3,295
 
 
 
713
 

Other assets
 
12,537
 
 
 
1,024
 

Total assets
$
196,123
 
 
$
152,202
 

 
 
 
 

Liabilities, mezzanine equity and stockholders’ equity
 
 
 

Current liabilities:
 
 
 

Mortgages and notes payable, current portion
$
723
 
 
$
3,774
 

Accounts payable
 
9,001
 
 
 
6,626
 

Accrued expenses and other
 
3,549
 
 
 
3,091
 

Income taxes payable
 
14,434
 
 
 
11,489
 

Operating lease liabilities, current portion
 
1,945
 
 
 
1,273
 

Finance lease liabilities, current portion
 
1,210
 
 
 
237
 

Total current liabilities
 
30,862
 
 
 
26,490
 

Mortgages and notes payable, net of current portion
 
65,652
 
 
 
25,943
 

Operating lease liabilities, net of current portion
 
8,455
 
 
 
4,173
 

Finance lease liabilities, net of current portion
 
2,140
 
 
 
461
 

Other liabilities
 
100
 
 
 
100
 

Total liabilities
 
107,209
 
 
 
57,167
 

 
 
 
 

Commitments and contingencies
 
 
 

 
 
 
 

Mezzanine equity:
 
 
 

Series B convertible preferred stock
 
14,725
 
 
 
14,725
 

Series C convertible preferred stock
 
4,275
 
 
 
23,000
 

Total mezzanine equity
 
19,000
 
 
 
37,725
 

 
 
 
 

Stockholders’ equity:
 
 
 

Common stock
 
375
 
 
 
341
 

Common stock subscribed but not issued
 
—
 
 
 
39
 

Additional paid-in capital
 
171,144
 
 
 
142,365
 

Accumulated deficit
 
(99,955
)
 
 
(83,924
)

Noncontrolling interests
 
(1,650
)
 
 
(1,511
)

Total stockholders’ equity
 
69,914