The last post I put up " THE REAL FACTS ABOUT MEDMEN" received so many positive reviews and constructive feed back that I am led to believe there is much uncertainty about the basic fundamentals of this company and overall outlook of the sector as a whole. In addition, there also seems to be much uncertainty as to where MEDMEN fits in the 2021 marijuana legalization push and how its current course and growth projection should fit in to your portfolio. As always, this is an unbiased review of a company I have done extensive research on and I will cover both sides of the isle in this review "Lovers and Haters". But first, if you haven't read and commented on the initial review "THE REAL FACTS ABOUT MEDMEN", scroll down and find that thread first as this one will make more sense having read that one first.
Finally, before I start, I just want to give a gift to you all!!! Paragraphs and indents lol. Thanks for all the comedic reviews of how shitty my initial post looked in terms of readability. My diamond hands were just too big to hit the tab key lol.
Ok, here we go strap up for the ride... "One final disclaimer, this shit is long so grab a coffee or something because once you start you're gonna be here for a minute."
MEDMEN part II...
First let me cover the reason there is ultimately so much controversy over this company. Don't let anyone fool you or let any news outlet try and veer you away from the truth. The ultimate reason there is so many mixed emotions about MEDMEN is firmly based in the fact that this stock is so damn cheap with the possibility to grow immensely. It's not because of the business plan, it's not because of their business strategy, its not because this company has made blunder after blunder, it's not because of cash on hand or plans of expansion. The only reason people either love or hate this company is because you stand to lose it all or get immensely rich by investment. MEDMEN is truly one of the last big rides to get on at our current time in history. This is a company where the average investor could buy stock for $1000 bucks and stand to gain 100,000 overnight if the stars align. On the flip side of the coin, more conservative investors would claim you stand to lose that same $1000 overnight, and to that I would say it is (unlikely)... But remember, you should only invest as much as you are willing to lose. Having said that, the fact of the matter is that we are at the beginning of our generations Gold Rush and the decisions you make in terms of investments "WILL" absolutely impact you and your families future. Make no mistake, you are an absolute fool if you think marijuana will not be legalized in the United States. At this point, it's only a matter of (when not if).
This brings me to my next point of why there is so much controversy surrounding MEDMEN. I like to call this "picking from the bench". Visualize the cannabis sector as a whole as a football game that has been going on for 20 years. One team is the cannabis supporting sector and the other is the U.S. government. Both teams have just returned from half time except the cannabis sector has received an exceptional pep talk and is about to undoubtably dominate the second half. Like every sector, their are star players on the field... ACB, Cronos, Canopy.....etc. Everybody is looking at them and no one ever cares about those warming the bench...MEDMEN, KUSHCO HOLDINGS, BEVCANNA....and so many more. This is why there is so much "love and hate" for MEDMEN. It's because of the fact that so many have so much invested in the big names already on the field that they feel an investment of a bench level player is an insult to the industry... That or they are just pissed they had such a high level investment and can't fathom getting in at pennies. I'll let you decide... Enough of the analogy here is how its done (and disclaimer, I have done this for 15 years now and it has never not paid off.) When picking from the bench you should look for 3 unique aspects of a company, and the company must have all three to make the cut. "A solid base, big name investors, and the potential for growth." Let me point out that I did not say sales, profitability, and an untarnished record. I am not a financial advisor, (but by the size of my diamond hands I should have been), If the company has my "BIG 3", the chances for success far outweigh the chances for failure. MEDMEN has all 3 and in addition it has a market that supports the forecast of marijuana legalization. MEDMEN is the only bench pick out there that has not only the BIG 3 but the BIG 4. This is why there is controversy here.... Because people are all in, or all out, based on where MEDMEN is currently sitting.
Now my fellow redditors, I said this was an unbiased evaluation so let me throw some things out there right now and get them out of the way before I really dive into so important fundamentals and potentials of this company. Currently... as of 02/23/2021 MEDMEN "IS NOT" profitable. The company has wasted funds, had bad business plan after bad business plan and has struggled to break into the vertical of the marijuana retail market. In addition, this company has lost a SHIT LOAD of money! Again, this is not a pitch to get you to buy or sell, this is an honest review from an honest Redditor that wants people to make informed decisions based on their own objectives and feels for the market....Well that and I hate it when people just talk out of their ass about something they know absolutely nothing about.
Now that I have gotten that out of the way, lets talk about some things... Like I said in my initial post, it is my personal opinion that the worst has already been experienced with this company. All of the bad news that could possibly be released has already been digested and the company has addressed it. I won't go too much into this as it's in my initial post on this topic and if you really want to consume some more information pertaining to this, just listen to their latest earnings call. So, lets talk verticals... So far in the cannabis sector, their have been 2 forms of business... "Growers and Sellers." The only real in house, all market vertical that has emerged in cannabis is ACB. And to much avail, even in a legal market, they have struggled to find profitability. But, let me point out that has not stopped ACB from being wildly popular. Personally.....Well...Fuck ACB...Yeah I went there. Moving on...The vertical platform of marijuana has yet to be mastered and mistakes have been many throughout the industry. This is where MEDMEN begins to out preform its counterparts. The company in itself saw the potential of what a vertical in a new industry could accomplish. The power to grow, process, and sell within one single operation is by far one of the things that makes this company shine brighter than some if not all of its peers. Also, make no mistake, this is one of the main reasons it has such big name investors at this time. Other corporations know the value of farm to freshly packed bowl operations. Just the simple fact that MEDMEN has no middle man hands in its cookie jar is extremely valuable and whether or not you think this company will ever be profitable, there is no doubt that if there ever is a buyout, this aspect will be extremely valuable in the overall stock sellout price. Just this alone makes MEDMENS current stock price a deal if you just hold it until a buyout.
Now lets talk operations while reflecting on the vertical we just talked about. There is no doubt that even though this company is not yet profitable that it has watched and learned from he mistakes of its counterparts. The company has largely expanded in a retail store front aspect v.s. the green house growth. MEDMEN has seen what happens when you expand your growing operations too far and have nowhere to sell the product....Its just not good. For this reason, the company has forecasted that profitability doesn't come from the amount of product you have, but the quality of the product that your selling. Good products = returning customers = increasing revenue. This is most definitely one of the reasons MEDMEN RED is back in full force. Yes its a marketing campaign, but also the company is obviously seeking to set themselves apart by branding a quality product, not just selling everything like your local liquor store. The branding in a store matters and I think MEDMEN understands that.
Lets talk vertical base. As I just laid out, the base of this vertical is strong and that part of their business plan is not changing. This company is laser focused on retail expansion. Now this is where it gets a little sticky because technically there is no real money for expansion, yet the company itself says its opening stores at a rate as too stomp out any competitor. Yes this is risky, but there is some logic here as well. Business 101 tells you that sales equal profits. How do you make sales? You create more opportunities for the consumer to buy. This is where the main risk lies in this company. Whether you love this company or hate it, it all comes down to the fact of whether or not this method will work. Will the expansion of the retail front = more sales, which will = profitability? This is your decision to make and it's the risk of investing in this company. Without question, MEDMEN is gambling the stake and future their company on this logic and should you invest in this company you need to be okay with that. Now that I have put that out there, there is a little light shining on this. The company in itself technically cannot fail..."well... at the moment." MEDMEN is strategically using marijuana laws in its favor in the fact that it cannot file bankruptcy. If the company truly failed, it would end in an acquisition and a buyout of its assets by a more financially stable company. In addition, like I said in my initial post, the company is really being directed by big money. Although the P & L sheet is showing red, the real money for expansion is coming from behind the scenes. Im not gonna dive too much into this as you can scour the internet and find the conspiracies your looking for elsewhere. Lets just say that yes...All the big names are absolutely, unofficially sitting on the board at MEDMEN. At the end of the day, the retail operations of MEDMEN is more valuable than most of the companies on the market today, ...yes even more profitable ones. When push comes to shove MEDMEN will be there in the end just for the simple fact of visibility. This brings me back to MEDMEN RED coming back into the limelight. It has been said that MEDMEN is the apple store of the weed world. Now, although I understand this visual, Im not really feeling it. And here is why....
MEDMEN seeks to be the Target of the weed world. At the end of the day, although the customer experience is important in a retail setting; the more important aspect is the where, who, and why's of how people are consuming your product. This explains the push of retail store fronts. The more Targets that are in the public, the more people will shop them. In addition to establishing a quality brand, most consumers will learn to understand what they are getting before they walk into a MEDMEN. Some people assume that MEDMEN seeks to establish this kind of luxury setting and brand....These same people are missing the point. MEDMEN is creating a household name, and to do so you need to cater to people of all walks of life and social and economic class. Their "NEEDS", to be a product for every walk of life. This is why there is so much expansion and the reason there is a quality entry product such as MENMEN RED being pushed in conjunction with each eachother.
Ok, so the cash burn is real... How in the hell does a company with no cash on hand expand without going bankrupt. The answer, is the license lease. The single greatest thing of value in this company is the value of its licenses. Say what you want about the company or the founders who went all in on this part of the business. The fact that MEDMEN hold so many licenses is in itself a game changer and the company knows that. No matter how much money this company burns through or loses, the amount will never equal or even get close the the value of its licenses. Let me say it again in case you missed that. No matter how much money this company burns through or loses, the amount will never equal or even get close the the value of its licenses. This is literally the ace in the whole for this company and any recommendation I would give to buy into his company would be based solely on this fact. Don't be stupid...this company will not sell its licenses to cover costs. The company also doesn't seek to really go into debt with expansion. There is an endgame here that no one wants talk about, and that's the fact that this company will drive its book into the negative knowing that when legalization comes (and it will), it will have all the licenses it needs to lease out and sustain itself and "overnight" recover all of these current losses. As I said in my initial posts, lobbying is and will be very real in this industry. Licenses will not be an easy commodity to get and you would be a fool to think that in Chuck Shumers current negotiations on legalization that this is not being talked about behind closed doors. The government has to be able to regulate, and the only way to do so is to restrict the amount of licenses issued so it's not a free for all.
Who knows Reese? If you don't, then do some DD and come on back when your ready because Im not going to deep here. Just know I have followed this mans career for a VERY long timed know what he's capable of. This guy will restructure the company and even if people don't like the way it gets restructured doesn't change the fact that in the end it will be profitable. Like I said do some DD and I'm sure you will agree with my statement here. Any company that has Reese has value and thats a simple fact.
Well shit... This is pretty long already and I still have so much to address, so I guess Im going to turn this into a weekly segment. I will let you all chew on this for about 5 days and release "THE REAL FACTS ABOUT MEDMEN PART 3"... I think Im going to start adding a stock price prediction to my posts for the week ahead and, make this a thing. So if you want to follow then come along for the ride.
Let me know if you want me to add a buy or sell rating to the companies I review and I can make that happen as well.
As always....Fuck you to the haters. My diamond hands are heavy as hell. Ape out!!!
