MedMen stock is tanking during Tuesday trading after MedMen Enterprises (CSE:MMEN) (OTCQX:MMNFF) posted its fourth-quarter results, in which net loss more than doubled to $82.9 million USD.
Net Loss Takes the Gloss off Gains
Overall, MedMen Enterprises actually made some strong gains in fiscal 2019, with Q4 revenue of $42 million USD representing a year-over-year increase of 104%. The full fiscal year figure was a record $130 million USD, a massive gain of 227% from fiscal 2018. However, MedMen stock is feeling the burden of a net loss of $82.9 million USD for the quarter and $277 million USD for the year. Compare this with a net loss of $113.9 million USD, and it's easy to see why investors are bearish.
MedMen's CEO Adam Beirman attempted to put a gloss on the results, saying, "Fiscal 2019 was a transformative year for MedMen, with over two million completed retail transactions to date and revenues increasing 227% year-over-year [...] Throughout the year, we served over one million customers from all 50 states and more than 100 countries. In California, the largest cannabis market in the world, MedMen surpassed a record $110 million in annualized run-rate retail revenue.” The figures were not enough to impress investors, however, with MedMen stock down 17%.
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Dismal Year for MedMen Stock
Earlier this month, it was announced that MedMen Enterprises was pulling out of a deal to acquire private cannabis firm PharmaCann, which dragged MedMen shares towards a year-low. The company further explained its reasoning for pulling the plug on the deal in yesterday's earnings call, with Bierman citing "changing macroeconomic conditions," which led the company to reevaluate its assets and redetermine where capital could be best allocated.
The surge in net loss compounds a poor year for the company, which has seen MedMen stock lose over 60% of its value. In an attempt to counteract the struggles it has endured throughout 2019, MedMen has also announced an amendment to its credit facility arranged by Gotham Green Partners. Under the new terms, MedMen Enterprises has agreed to appoint an independent board of directors, which may go some way to increase its public image, after a series of scandals led to a lampooning by South Park, who described MedMen as "posers."
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