Grow, Gift, Repair

Information on investing in the state.

MariMed Advisors
Similar to AmeriCann, MariMed Advisors (OTC: MRMD) doesn’t actually hold a Massachusetts cannabis license. Instead, it provides consulting services for those wishing to obtain a license or operating facility in several states.

The company, based in Newton, Mass., has helped clients in eight states, and it offers the Kalm Fusion and Betty’s Eddies lines of branded products that it licenses to state-specific operators. In November, MariMed acquired a 137,000 square foot facility in New Bedford, Mass., a portion of which the company intends to lease to a licensed cannabis operator, ARL Healthcare. MariMed is also developing an 8,000 square foot dispensary in Middleborough, which will be leased to ARL Healthcare.

As of Nov. 14, 2017, the company had 171.3 million shares outstanding and 6.75 million options (all at or below $0.55). Subsequent to that date, it sold 6.95 million shares at an average of $0.407 and issued 3.48 million shares following conversions of debt and preferred shares. It also borrowed $4 million due June 18, 2008, and issued 1 million warrants at $0.50 per share. At a recent closing price of $1.13 and based on 188.5 million fully-diluted shares, MariMed has a market cap of approximately $213 million.

MPX Bioceutical
With substantial operations in Arizona and a presence in Nevada and Maryland, MPX Bioceuticals (CSE: MPX) (OTC: MPXEF), formerly Canadian Bioceuticals, owns 51% of a licensed Massachusetts cannabis operation.

MPX has shared production capacity projections for its Fall River facility of 2.25 million grams of flower and 500,000 grams of extracts, and the company has secured a second dispensary location in Attleboro. MPX, which is a client of New Cannabis Ventures, posted its most recent investor presentation in December. It hosted a recorded investor call in March as well.

As of Dec. 31, 2017, the company had 343.9 million shares outstanding and 23 million options with an average exercise price of C$0.42 and 56.2 million warrants with an average exercise price of C$0.50. Subsequent to the end of the quarter, it issued 4.75 million shares and 2.7 million warrants. Including only those options and warrants with exercise prices below the current price, there would be 422.6 million shares. At a recent closing price of $0.547 (USD), the company had a market capitalization of approximately $231 million. The company also has borrowed C$10 million from a credit facility that is convertible into 20 million shares that, if converted, would boost the market capitalization to approximately $242 million.

Bottom line: Massachusetts, which has a medical cannabis industry that has been slow to develop, will permit commercial adult-use cannabis sales beginning in July. The state is the first on the East Coast to tax and regulate adult-use cannabis, and several publicly-traded companies have exposure to the market.