04/01/2022 - MariMed Inc. (MRMD)
Sell 100% of MariMed Inc. (MRMD) - Close the position.
11/16/2021 - MariMed Inc. (MRMD)
Initial Investment: 4% of the portfolio (III)
Caution before investing in MariMed Inc (MRMD).
MariMed Inc is trading on OTC which has least restrict rules for listing.
Most securities traded on OTC are not covered by traditional sell side security analysts; it means that securities traded on OTC are less scrutinized by professionals and public.
The price of securities traded on OTC almost are very volatile and easily influenced by market.
Due to the nature of MariMed Inc. (MRMD)
It is more likely to be impacted by competitors because of its small operation.
Slow growth is more likely due to the constraint of limited licenses issued by states which would constrain its ability to expand to more locations.
The reasons that MariMed Inc can be a good investment are:
MariMed can provide a long term growth even though it may not be robust.
MariMed begins to have positive free cash flow and has steady growth of revenue in the past few years.
MariMed is small and, the price is low now.
After the observation of activities from cultivation & production facilities and dispensaries in MA & IL, it is Softwater Investment's belief that the business of MariMed Inc is sound and easily seen.
The strategy MariMed Inc deployed is working well. (Help clients obtain cannabis licenses, develop facilities and dispensaries for leasing to clients, generate revenue from rentals and fees for facility management and operation. Acquire clients' businesses and their state cannabis licenses when cannabis adult-use is legalized in the state.)
Of course, there are downsides which are required extra close attention to:
The stewardship of management at MariMed Inc. Some of the transactions between MariMed and executives are legit, and they are derived from the arrangement of acquisitions and merges. However, too much always not a good sign. It is necessary to pay attention to the manners.
Due to it small size, it is also a good idea to closely watch its business progress and financial performance.
Financial report for the third quarter 2021 is out. The disappointed number is the expense of $9,481,030 dollars for "General and administrative" (link) of which is 28.55% of revenue. Also, this high cost is derived from stock option compensation of $6,441,744 dollars (link). This high cost is a demonstration of stewardship of management which is a matter of importance that investors should keep in mind until proved otherwise.