To marijuana enthusiasts, the “MedMen” brand should be familiar. The company—MedMen Enterprises Inc (CNSX:MMEN, OTCMKTS:MMNFF)—has a portfolio of some of the most iconic legal cannabis retail stores in the U.S., including locations in Beverly Hills, Venice Beach, downtown L.A., and New York’s Fifth Avenue.
But the journey of MedMen stock has not exactly been sunshine and rainbows. After peaking in late 2018, the company’s share price went on a downtrend and is now at just $0.39.
MedMen reported earnings on February 16. The report showed that, in the second quarter of the company’s fiscal year 2021, which ended December 26, 2020, it generated $33.8 million of revenue. That represented a 0.3% increase quarter-over-quarter, excluding the divestiture of its Evanston store. (Source: “MedMen Reports Second Quarter Fiscal Year 2021 Financial Results,” MedMen Enterprises Inc, February 16, 2021.)
On a year-over-year comparison, things look less rosy, as the company earned $44.1 million of net revenue in the second quarter of its fiscal 2020.
The big challenge for MedMen—and one of the main reasons MMNFF stock tanked earlier on—was that the company’s costs seemed to be getting out of control. More recently, though, MedMen has made some solid progress on that front.
For the second quarter of fiscal 2021, MedMen Enterprises Inc’s company-wide gross margin rate was 53%, marking a substantial increase from the 47% in the first fiscal quarter. At the same time, the company’s general and administrative expenses totaled $33.8 million, down 47% from the same period of the previous year.
However, the progress was not enough, as the company still incurred a substantial net loss of $68.9 million for the quarter, which included $24.0 million of tax provision expense.
That said, in the year-ago period, MedMen had a much bigger net