MedMen Stock Fails to Attract Buying Interest, But Why?

MedMen Stock

MedMen stock has been trending lower since early July, with a fall of about 30%. However, the stock has been muted over the past few trading sessions despite the fact that MedMen Enterprises (CSE:MMEN) (OTCQX:MMNFF) made some positive announcements.

While it is true that the entire marijuana sector has gone through a bit of trouble over the past few months, most of the well-known companies have continued to make deals and launch new initiatives in order to grow their businesses. One such company is MedMen Enterprises, which has continued to work on its businesses despite the slowdown in the sector.

Delivery Service in California

Back in August, MedMen announced that it was going to start a delivery service of its products in the state of California. Considering the fact that the company has managed to create a significant presence in the state, it is a logical decision. In addition to that, it is important to keep in mind that California is the most lucrative market in the industry and MedMen Enterprises stated that total sales could eventually be as much as $11 billion per year.

One of the bigger reasons behind the company’s rise as a force in the marijuana industry is the fact that it is involved in selling high-quality premium marijuana at its upscale stores. Over the course of the past years, this strategy has worked for MedMen, and that has led to a remarkable expansion in the number of retail stores under its control.

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MedMen stock is trading lower by 0.50% at $1.97 on the OTC market in Thursday’s trading session.

Key Operational Analysis

While its presence in the state of California is considerable and remains the company’s anchor, it has expanded to other states as well. Currently, it has a total of 37 stores, and in addition to California, those stores are spread across Arizona, New York, Illinois, and Nevada. On the other hand, MedMen Enterprises has also made some canny acquisitions, and that has given it control of as many as 92 additional retail licenses spread over 12 states.

The five markets in which it currently operates are potentially high growth markets and could help the company in growing significantly in the years to come.

Despite all that, MedMen stock has been a massive underperformer in 2019, and the primary reason behind the poor performance has been the heavy dilution in value that took place in order to raise more cash. However, analysts believe that the company is primed to make a turnaround sooner rather than later.

What do you think about MedMen stock? Do you think it’s a bargain buying at the current market price?

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