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Marimed Inc (OTCMKTS:MRMD) Retires $7.3 Million Short-term Debt: Robust Sales Of Adult-Use Programs Improves Cash Flow



Marimed Inc (OTCMKTS:MRMD) restructured its debt to provide financial flexibility at reduced interest rates.

Marimed replaced the mortgage-backed financing of $13.0 million with a $4.8 million 5-year loan by offering one of its properties as collateral. It carries an interest of 6.5% annually and amortized for 20 years. The company also retired high interest (15%) short term debt of $7.3 million.

Adult-use programs promote cash flow

Marimed enjoys enhanced cash flow because of improved sales of its adult-use programs through Massachusetts and Illinois based businesses. The company also reported improvement in earnings from sales reported from its Maryland and Delaware based medical businesses.

Production is in full swing at New Bedford facility

Marimed completed New Bedford, Massachusetts manufacturing facility, and ramped up the production. Already two dispensaries that provide the adult-use program in Illinois are operating at full-swing. Marimed is finalizing the requirements to commence operations at its third facility based in Mt. Vermont.

Cannabis Control Commission (CCC) completed the inspection of adult-use New Bedford based production and cultivation facilities of Marimed. CCC expects to commence inspection of Middleborough based Panacea Wellness Dispensary in early August 2020.

CFO of Marimed, John Levine said obtaining favorable financing showcases the operational efficiency and its business strategy strength. The debt restructuring helped to strengthen its balance sheet. Also, improvements in revenues from Massachusetts and Illinois based businesses helped to improve free cash flow.

SVP (sales) of Marimed, Ryan Crandall said the expansion of its cultivation facility in New Bedford to 17 sophisticated cultivation rooms will improve monthly sales of products under Nature’s Heritage Brand.

Reports robust growth

Marimed posted a growth of 112% YoY to $7.5 million in revenues in Q1 2020. It reported better than expected sales by consolidating its cannabis businesses in IL and Massachusetts. The company posted an increase of 115% to $4.9 million in Q1 2020.

CEO of Marimed, Bob Fireman, said the company started posting better results beginning Q1 2020 following the consolidation of businesses and expects to report improved sales going forward. He further said the company commenced the sales of branded products and well-known products to Middleborough based Panacea Wellness Dispensary and wholesale markets in other regions.

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