Poised for Growth in 2024
MariMed reported 4Q revenue of $38.9 million, which was exactly in line with our estimate. This represents a 0.26% increase Q/Q and an 8.66% improvement Y/Y. Gross margins were 44.47%, a gain of 1.80% sequentially and 0.34% Y/Y. Revenue was helped by a full contribution from the Thrive Dispensary in Casey, Illinois and beginning operations at the Mt. Vernon, Illinois manufacturing facility. These gains were offset by increased competition in Illinois and smaller basket sizes due to lower consumer spending. 4Q adjusted EBITDA of $5.2 million missed our estimate of $6.2 million. Adjusted EBITDA declined 14.75% Q/Q and increased 15.56% Y/Y. Operating expenses increased 10.03% sequentially, which contributed to adjusted EBITDA margins dropping to 13.37% in 4Q. This represents a 2.35% decline Q/Q and 0.80% improvement Y/Y. Margins should increase in 2024 as new assets turn on and the benefits of prior investments are realized. MariMed expanded its Maryland footprint on March 6 with a pending medical-licensed dispensary acquisition in Upper Marlboro. Total considerations were $5.25 million and once approved by the Maryland Cannabis Association, MariMed will apply for an adult-use license. This would give the company two adult-use dispensaries plus one of the larger cultivation and processing facilities in the state. On February 26, MariMed received a certificate of occupancy for its brick-and-mortar location in Casey, Illinois. The company expects to transition from the temporary facility to the new store at the same location sometime during 1Q24. MariMed issued full-year 2024 financial targets based on organic growth of its existing operating assets. The company projects revenue growth of 5-7%, adjusted EBITDA growth of 0-2%, and capex of $10 million. This does not include adult-use sales in Ohio, opening the new processing facility in Missouri, opening the new dispensary in Maryland, starting adult-use at the Quincy, Massachusetts store, or acquiring other operating assets or licenses. We hosted an earnings review with CEO, Interim CFO, and President Jon Levine. Those interested can listen to the recording on X using the link in our full report.
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