MedMen Stock: 30 Stores in Florida Might Build a Leader

MedMen Stock

Five days ago, MedMen stock began climbing again. The news of a $250 million investment from Gotham Green Partners to develop retail stores across Florida sat well with investors. Now those gains are correcting; at the time of writing, MMEN stock is selling for $4.30 CAD, down 2.71% on the CSE.

But is there truly longterm potential in the Florida market?

MedMen Stock: Will Florida Bring Long-term Gains?

According to the press release, the investment will help MedMen Enterprises (CSE:MMEN) (OTCQX:MMNFF) to fund “its national retail expansion.” A 30-store expansion in Florida, to be more precise. Other capital will go towards expanding the company’s technology infrastructure and integrating operations of its most recent acquisition, Illinois-based PharmaCann.

Planning such expansions in Florida suggests that MedMen is rapidly growing. In fact, it might be looking to take over—certainly in the Florida market anyway, where 30 stores means MedMen living on, practically, every street corner.

Florida is Active

On paper, this might appease investors. This is a medical marijuana company with plans to spread its footprint across a state with a medical marijuana market that is expanding quickly. Sounds good. Florida has a massive market potential with estimations of sales reaching $1.3 billion USD by 2021. Further, according to Forbes, at the beginning of 2019, the number of active medical marijuana patients grew to 168,000.

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These figures point to one thing: Florida is becoming one of America’s biggest medical marijuana markets.

>> Liberty Health Sciences Approved to Sell Flower Products in Florida

MedMen Stock in a Niche Market

MedMen Enterprises is focusing on a niche here and niches in the cannabis industry work. HEXO Corp (TSX:HEXO) (NYSE:HEXO), for example, holds a 35% share in Canada’s Quebec province. This province deal alone means continual steady revenue for the company. Simply put, being a market leader in one state or province can set a company up for a bright future.

30 stores will certainly play a huge part in establishing this type of dominance for MedMen in Florida.

But it won’t be plain sailing, because Florida has been difficult. The state is showing a surprising number of medical users despite how difficult the government here has made procuring the drug.

Florida Regulations are Tough

Medical marijuana is now legal in Florida, but it has high costs associated with it, putting it out of reach for many residents. This type of hindrance might effect MedMen stock down the line. Will there be enough demand to warrant 30 stores?

A new patient assessment can cost $250. Then there’s a required follow-up, 70 days later, and this costs a further $100. A 210-day recertification requirement is another $250, and only two refills are allowed before this becomes a necessity. Forbes states further:

“In short, the country’s third most populous state made medical marijuana expensive, limited, and cumbersome to manage.”

The Takeaway

MedMen stock has the potential to flourish on its Florida take-over. While it is going to face limitations due to the difficult state regulations, this isn’t stopping the company aiming big. 30 stores is a lot, and if Florida can reach that estimated sales figure, then MedMen Enterprises may become king here.

What do you think?

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