3Q Earnings Preview
MariMed reports 3Q earnings on November 8 after the close. We are hosting an earnings review on X (Twitter) with CEO, Interim CFO, and President Jon Levine on November 9 at 11:00 am ET. Those interested can listen live using this link and it will also be recorded. Q/Q, we are expecting 5.4% revenue growth and a slight contraction in AEBITDA. Maryland should be the most significant driver of the top-line improvement. The state began allowing adult-use sales on July 1. According to BDSA, statewide sales are +126% Q/Q, with a 65% increase in prices and a 61% jump in unit volumes. MariMed has one adult-use store in Annapolis and a 90,000-square-foot cultivation facility in Hagerstown. The company also has a GMP-certified kitchen that allows it to make higher-dose edibles for the medical market. MariMed opened the adult-use Panacea Wellness store in Beverly, Massachusetts on April 25 and a Thrive Wellness medical dispensary in Tiffin, Ohio on June 12. While these opened in 2Q, this is the first quarter with a full contribution. Margins will be affected by increased competition and pricing pressure in Illinois and Massachusetts. While state sales were up Q/Q, this was driven by new stores opening and increases in unit volumes. Prices in Massachusetts declined 7% last quarter. Illinois prices fell 3% last quarter and competition has increased from new social-equity stores and Missouri transitioning to adult-use sales. Construction delays and higher input costs may weigh on margins. MariMed has not been immune to supply chain challenges and slow permitting processes. MariMed opened a new store in Casey Illinois on October 11 and is also close to opening its Illinois processing center. This will allow it to bring back its award-winning Betty’s Eddies edibles line. A craft grow is scheduled to open in early 2024 and this will make MariMed vertically integrated in Illinois. Adult-use sales in Ohio are also a potential boost next year. Finally, former CFO Susan Levine resigned effective October 31, 2023. While the company is searching for a new CFO, current CEO and President Jon Levine is interim CFO. Levine served as CFO from 2017-2022.
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