Form 8-K - Current report

0001522767FALSE00015227672023-11-082023-11-08

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 8, 2023

MARIMED INC.

(Exact name of registrant as specified in its charter)

Delaware

0-54433

27-4672745

(State or other jurisdiction of incorporation)

(Commission File Number)

(IRS Employer Identification No.)

10 Oceana Way

Norwood, MA 02062

(Address of Principal Executive Offices)

Registrant’s telephone number, including area code: [phone]

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act: None.

Title of each class

Ticker symbol(s)

Name of each exchange on which registered

Not Applicable.

Not Applicable.

Not Applicable.

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

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Item 2.02. Results of Operations and Financial Condition.

On November 8, 2023, MariMed Inc. (the “Company”) issued a press release, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference, announcing its financial results for the three- and nine-month periods ended September 30, 2023.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.						Description
99.1						Press release, dated November 8, 2023, announcing financial results for the three- and nine-month periods ended September 30, 2023.
104						Cover Page Interactive Data File (embedded within the Inline XBRL document).

In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, furnished pursuant to Item 2.02, including Exhibit 99.1 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

			MARIMED INC.
Dated: November 8, 2023
			By:			/s/ Jon R. Levine
						Jon R. Levine
						President, Chief Executive Officer and Interim Chief Financial Officer

Exhibit 99.1

MariMed Reports Third Quarter 2023 Earnings

NORWOOD, MA, November 8, 2023 - MariMed Inc. (“MariMed” or the “Company”) (CSE: MRMD) (OTCQX: MRMD), a leading multi-state cannabis operator focused on improving lives every day, today announced its financial results for the third quarter ended September 30, 2023.

“I am pleased to report another solid quarter of strong revenue growth on both a year-over-year and a sequential basis as we continue to outperform the greater industry,” said Jon Levine, Chief Executive Officer. “We reported our 15th consecutive quarter of positive adjusted EBITDA. Our wholesale business continued to set quarterly sales records, which will continue for the remainder of this year and next. Our balance sheet remains one of the strongest in the industry, and we were particularly pleased with the exponential growth of our Maryland operations with the commencement of adult-use sales on July 1st.”

Financial Highlights1

The following table summarizes the Company's consolidated financial highlights (in millions, except percentage amounts):

			Three months ended September 30,												Nine months ended September 30,
			2023						2022						2023						2022
Revenue			$	38.8					$	33.9					$	109.7					$	98.2
GAAP Gross margin			43		%				48		%				44		%				49		%
Non-GAAP Gross margin			45		%				48		%				45		%				49		%
GAAP Net (loss) income			$	(4.3)					$	2.7					$	(5.9)					$	8.9
Non-GAAP Net (loss) income			$	(3.1)					$	4.7					$	(2.2)					$	17.0
Non-GAAP Adjusted EBITDA			$	6.1					$	8.6					$	19.4					$	27.9
Non-GAAP Adjusted EBITDA margin			16		%				25		%				18		%				28		%

1 See the reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures and additional information about non-GAAP measures in the section entitled “Discussion of Non-GAAP Financial Measures” below and in the financials information included herewith.

CONFERENCE CALL

MariMed management will host a conference call on Thursday, November 9, 2023 at 8:00 a.m. Eastern time, to discuss these results. The conference call may be accessed through MariMed’s Investor Relations website, or by clicking the following link: https://app.webinar.net/kpQmoVjo85M.

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THIRD QUARTER 2023 OPERATIONAL HIGHLIGHTS

During the third quarter, the Company announced the following developments in the implementation of its strategic growth plan:

•July 1: MariMed commenced adult-use retail and wholesale operations in Maryland. The Company's retail sales, which began in Q422, grew 88% sequentially, while its wholesale business grew 161% year-over-year.

•July 13: MariMed staged the ‘Boston 280E THC Party’ in Boston Harbor to protest unfair cannabis industry tax laws. Inspired by its 250th anniversary, the Company reenacted the Boston Tea Party. Onboard a schooner in Boston Harbor, MariMed management and employees dressed in colonial outfits and decried unfair IRS Code 280E on behalf of the entire cannabis industry.

OTHER DEVELOPMENTS

Subsequent to the end of the third quarter, the Company announced the following developments:

•October 11: MariMed announced the opening of Thrive Dispensary in Casey, Illinois, marking the fifth dispensary owned or managed in that state, and the twelfth dispensary it owns or manages across five states. In response to the state’s request to open as soon as possible, the Company operates Thrive Dispensary from a temporary mobile facility until construction of a permanent building is completed. MariMed continues to build its processing and cultivation facility in Mt. Vernon, Illinois. The processing facility is expected to open during the fourth quarter, at which time MariMed will produce its award-winning edibles for sale through retail and wholesale channels. The Company expects the cultivation facility construction to be completed in early 2024.

2023 FINANCIAL GUIDANCE

MariMed remains committed to its proven strategic growth plan and continues to operate some of the best facilities in the cannabis industry. Delayed openings of new revenue generating assets, input cost inflation, and increased competition continue to have a bigger impact than anticipated on operational and financial results. As such, the Company's guidance for full year 2023 is now:

•Revenue of $148 million to $150 million;

•Gross margin of approximately 45%;

•Non-GAAP Adjusted EBITDA of $27 million to $32 million;

•Capital expenditures of $22 million to $25 million;

DISCUSSION OF NON-GAAP FINANCIAL MEASURES

MariMed’s management uses several different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of its business, and making operating decisions, planning and forecasting future periods. The Company has provided in this release several non-GAAP financial measures: Non-GAAP Gross margin, Non-GAAP Net income (loss), Non-GAAP Adjusted EBITDA and non-GAAP Adjusted EBITDA margin, as supplements to Revenue, Gross margin, Net income (loss) and other financial measures prepared in accordance with GAAP.

Management believes these non-GAAP financial measures are useful in reviewing and assessing the performance of the Company, and when planning and forecasting future periods, as they provide meaningful operating results by excluding the effects of expenses that are not reflective of its operating business performance. In addition, the Company’s management uses these non-GAAP

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financial measures to understand and compare operating results across accounting periods and for financial and operational decision-making. The presentation of these non-GAAP measures is not intended to be considered in isolation or as a substitute for the financial information prepared in accordance with GAAP.

Management believes that investors and analysts benefit from considering non-GAAP financial measures in assessing the Company’s financial results and its ongoing business, as it allows for meaningful comparisons and analysis of trends in the business. In particular, non-GAAP adjusted EBITDA is used by many investors and analysts themselves, along with other metrics, to compare financial results across accounting periods and to those of peer companies.

As there are no standardized methods of calculating non-GAAP financial measures, the Company’s calculations may differ from those used by analysts, investors and other companies, even those within the cannabis industry, and therefore may not be directly comparable to similarly titled measures used by others.

Management defines non-GAAP Adjusted EBITDA as income (loss) from operations, determined in accordance with GAAP, excluding the following items:

•depreciation of fixed assets;

•amortization of acquired intangible assets;

•Impairment or write-downs of intangible assets;

•stock-based compensation;

•legal settlements; and

•acquisition-related and other expenses.

For further information, please refer to the publicly available financial filings available on MariMed's Investor Relations website, as filed with the U.S. Securities and Exchange Commission, or as filed with the Canadian securities regulatory authorities on the SEDAR website.

ABOUT MARIMED

MariMed Inc., a multi-state cannabis operator, is dedicated to improving lives every day through its high-quality products, its actions, and its values. The Company develops, owns, and manages seed to sale state-licensed cannabis facilities, which are models of excellence in horticultural principles, cannabis cultivation, cannabis-infused products, and dispensary operations. MariMed has an experienced management team that has produced consistent growth and success for the Company and its managed business units. Proprietary formulations created by the Company’s technicians are embedded in its top-selling and award-winning products and brands, including Betty’s Eddies, Nature’s Heritage, InHouse, Bubby’s Baked, K Fusion, Kalm Fusion, and Vibations: High + Energy, which are trademarks of MariMed Inc. For additional information, visit www.marimedinc.com.

IMPORTANT CAUTION REGARDING FORWARD-LOOKING STATEMENTS:

The information in this release contains “forward-looking” statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, which are subject to several risks and uncertainties. All statements other than statements of historical facts contained in this release, including without limitation statements regarding projected financial results for 2023, including management’s belief that it will have its fourth consecutive year of positive operating cash flow, anticipated openings of dispensaries and facilities, timing of regulatory approvals, plans and objectives of management for future operations, are forward-looking statements. Without limiting the foregoing, the words “anticipates”, “believes”, “estimates”, “expects”, “expectations”, “intends”, “may”, “plans”, and other similar language, whether in the negative or affirmative, are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

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Forward-looking statements are based on our current beliefs and assumptions regarding our business, timing of regulatory approvals, the ability to obtain new licenses, business prospects and strategic growth plan, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated in these forward-looking statements due to various risks, uncertainties, and other important factors, including, among others, reductions in customer spending, our ability to recruit and retain key personnel, and disruptions from the integration efforts of acquired companies.

These factors are not intended to be an all-encompassing list of risks and uncertainties that may affect our business and results of operations. These statements are not a guarantee of future performance and involve risk and uncertainties that are difficult to predict, including, among other factors, changes in demand for the Company’s services and products, changes in the law and its enforcement, and changes in the economic environment. Additional information regarding these and other factors can be found in our reports filed with the U.S. Securities and Exchange Commission. In providing these forward-looking statements, the Company expressly disclaims any obligation to update these statements publicly or otherwise, whether as a result of new information, future events or otherwise, except as required by law.

All trademarks and service marks are the property of their respective owners.

For More Information Contact:

Investor Relations:

Steve West, Vice President, Investor Relations

Email: [e-mail]

Phone: [phone]

Company Contact:

Howard Schacter, Chief Communications Officer

Email: [e-mail]

Phone: [phone]

# # #

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MariMed Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

			September 30, 2023						December 31, 2022
Assets
Current assets:
Cash and cash equivalents			$	13,259					$	9,737
Accounts receivable, net			6,352						4,157
Inventory			24,206						19,477
Deferred rents receivable			649						704
Notes receivable, current portion			52						2,637
Investments, current portion			161						123
Due from related parties			87						29
Other current assets			6,026						7,282
Total current assets			50,792						44,146
Property and equipment, net			85,195						71,641
Intangible assets, net			17,856						14,201
Goodwill			11,993						8,079
Notes receivable, net of current portion			814						7,467
Investments, net of current portion			164						—
Operating lease right-of-use assets			9,679						4,931
Finance lease right-of-use assets			2,717						713
Other assets			11,607						1,024
Total assets			$	190,817					$	152,202
Liabilities, mezzanine equity and stockholders’ equity
Current liabilities:
Term loan			$	3,600					$	—
Mortgages and notes payable, current portion			1,009						3,774
Accounts payable			8,494						6,626
Accrued expenses and other			5,347						3,091
Income taxes payable			14,014						11,489
Operating lease liabilities, current portion			1,865						1,273
Finance lease liabilities, current portion			963						237
Total current liabilities			35,292						26,490
Term loan, net of current portion			18,895						—
Mortgages and notes payable, net of current portion			27,444						25,943
Operating lease liabilities, net of current portion			8,449						4,173
Finance lease liabilities, net of current portion			1,775						461
Other liabilities			100						100
Total liabilities			91,955						57,167
Commitments and contingencies
Mezzanine equity
Series B convertible preferred stock			14,725						14,725
Series C convertible preferred stock			4,275						23,000
Total mezzanine equity			19,000						37,725
Stockholders’ equity
Common stock			376						341
Common stock subscribed but not issued			—						39
Additional paid-in capital			170,922						142,365
Accumulated deficit			(89,786)						(83,924)
Noncontrolling interests			(1,650)						(1,511)
Total stockholders’ equity			79,862						57,310
Total liabilities, mezzanine equity and stockholders’ equity			$	190,817					$	152,202

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MariMed Inc.

Condensed Consolidated Statements of Operations

(in thousands, except percentages and per share amounts)

(unaudited)

			Three months ended												Nine months ended
			September 30,												September 30,
			2023						2022						2023						2022
Revenue			$	38,800					$	33,912					$	109,699					$	98,180
Cost of revenue			21,962						17,748						61,097						50,035
Gross profit			16,838						16,164						48,602						48,145
Gross margin			43.4		%				47.7		%				44.3		%				49.0		%
Operating expenses:
Personnel			5,916						3,746						16,191						10,170
Marketing and promotion			1,585						1,402						4,397						2,854
General and administrative			6,135						5,097						15,520						16,890
Acquisition-related and other			32						143						647						897
Bad debt			(122)						40						(127)						54
Total operating expenses			13,546						10,428						36,628						30,865
Income from operations			3,292						5,736						11,974						17,280
Interest and other (expense) income:
Interest expense			(2,482)						(518)						(7,627)						(1,271)
Interest income			29						239						243						720
Other (expense) income, net			(646)						(251)						(1,556)						24
Total interest and other expense, net			(3,099)						(530)						(8,940)						(527)
Income before income taxes			193						5,206						3,034						16,753
Provision for income taxes			4,462						2,484						8,902						7,894
Net (loss) income			(4,269)						2,722						(5,868)						8,859
Less: Net (loss) income attributable to noncontrolling interests			(10)						16						(6)						142
Net (loss) income attributable to common stockholders			$	(4,259)					$	2,706					$	(5,862)					$	8,717
Net (loss) earnings per share attributable to common stockholders:
Basic			$	(0.01)					$	0.01					$	(0.02)					$	0.03
Diluted			$	(0.01)					$	0.01					$	(0.02)					$	0.02
Weighted average common shares outstanding:
Basic			373,081						339,025						359,156						337,111
Diluted			373,081						381,071						359,156						379,868

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MariMed Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

			Nine months ended
			September 30,
			2023						2022
Cash flows from operating activities:
Net (loss) income attributable to common stockholders			$	(5,862)					$	8,717
Net (loss) income attributable to noncontrolling interests			(6)						142
Adjustments to reconcile net (loss) income to cash provided by operating activities:
Depreciation and amortization of property and equipment			3,838						2,469
Amortization of intangible assets			2,181						854
Stock-based compensation			801						6,396
Amortization of original debt issuance discount			206						—
Amortization of debt discount			1,840						—
Payment-in-kind interest			301						—
Present value adjustment of notes payable			719						—
Bad debt (income) expense			(127)						54
Obligations settled with common stock			463						637
Write-off of disposed assets			906						—
Gain on finance lease adjustment			(31)						—
(Gain) loss on changes in fair value of investments			(16)						930
Write-down of prepaid purchase consideration			200						—
Other investment income			—						(954)
Changes in operating assets and liabilities:
Accounts receivable, net			(2,065)						(4,856)
Deferred rents receivable			55						111
Inventory			(4,728)						(4,215)
Other current assets			2,040						(1,973)
Other assets			(300)						(113)
Accounts payable			1,868						2,372
Accrued expenses and other			(132)						(193)
Income taxes payable			2,525						(4,804)
Net cash provided by operating activities			4,676						5,574
Cash flows from investing activities:
Purchases of property and equipment			(14,749)						(9,985)
Business acquisitions, net of cash acquired			(2,987)						(12,746)
Advances toward future business acquisitions			(250)						(800)
Purchases of investments			(187)						—
Purchases of cannabis licenses			(626)						(330)
Issuance of notes receivable			(879)						—
Proceeds from notes receivable			99						130
Due from related party			(58)						—
Net cash used in investing activities			(19,637)						(23,731)

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			Nine months ended
			September 30,
			2023						2022
Cash flows from financing activities:
Proceeds from term loan			29,100						—
Payment of third-party debt issuance costs in connection with term loan			(1,798)						—
Principal payments of term loan			(1,500)						—
Principal payments of mortgages and promissory notes			(519)						(1,033)
Repayment and retirement of mortgage			(778)						—
Repayment and retirement of promissory notes			(5,503)						—
Proceeds from mortgages			—						3,000
Proceeds from exercise of stock options			109						10
Principal payments of finance leases			(500)						(166)
Redemption of minority interests			—						(2,000)
Distributions			(128)						(224)
Net cash provided by (used in) financing activities			18,483						(413)
Net increase (decrease) in cash and cash equivalents			3,522						(18,570)
Cash and equivalents, beginning of year			9,737						29,683
Cash and cash equivalents, end of period			$	13,259					$	11,113

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MariMed Inc.

Reconciliation of Non-GAAP and GAAP Financial Measures

(in thousands, except percentages)

(unaudited)

			Three months ended												Nine months ended
			September 30,												September 30,
			2023						2022						2023						2022
Non-GAAP Adjusted EBITDA
GAAP Income from operations			$	3,292					$	5,736					$	11,974					$	17,280
Depreciation and amortization of property and equipment			1,591						917						3,838						2,469
Amortization of acquired intangible assets			844						429						2,181						854
Stock-based compensation			296						1,372						801						6,396
Acquisition-related and other			32						143						647						897
Adjusted EBITDA			$	6,055					$	8,597					$	19,441					$	27,896
Non-GAAP Adjusted EBITDA Margin (Non-GAAP adjusted EBITDA as a percentage of revenue)
GAAP Income from operations			8.5		%				16.9		%				10.9		%				17.6		%
Depreciation and amortization of property and equipment			4.0		%				2.7		%				3.5		%				2.5		%
Amortization of acquired intangible assets			2.2		%				1.3		%				2.0		%				0.9		%
Stock-based compensation			0.8		%				4.1		%				0.7		%				6.5		%
Acquisition-related and other			0.1		%				0.4		%				0.6		%				0.9		%
Adjusted EBITDA margin			15.6		%				25.4		%				17.7		%				28.4		%

GAAP Gross margin			43.4		%				47.7		%				44.3		%				49.0		%
Amortization of acquired intangible assets			1.1		%				0.5		%				1.0		%				0.3		%
Non-GAAP Gross margin			44.5		%				48.2		%				45.3		%				49.3		%

GAAP Net income (loss)			$	(4,269)					$	2,722					$	(5,868)					$	8,859
Amortization of acquired intangible assets			844						429						2,181						854
Stock-based compensation			296						1,372						801						6,396
Acquisition-related and other			32						143						647						897
Non-GAAP Net income			$	(3,097)					$	4,666					$	(2,239)					$	17,006

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MariMed Inc.

Supplemental Information

Revenue Components

(in thousands)

(unaudited)

			Three months ended												Nine months ended
			September 30,												September 30,
			2023						2022						2023						2022
Product revenue:
Product revenue - retail			24,121						23,593						71,640						68,121
Product revenue - wholesale			13,643						9,009						35,050						23,029
Total product revenue			37,764						32,602						106,690						91,150
Other revenue			1,036						1,310						3,009						7,030
Total revenue			$	38,800					$	33,912					$	109,699					$	98,180

Cover	Nov. 08, 2023
Cover [Abstract]
Document Type	8-K
Document Period End Date	Nov. 08, 2023
Entity Registrant Name	MARIMED INC.
Entity Incorporation, State or Country Code	DE
Entity File Number	0-54433
Entity Tax Identification Number	27-4672745
Entity Address, Address Line One	10 Oceana Way
Entity Address, City or Town	Norwood
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02062
City Area Code	(781)
Local Phone Number	277-0007
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Central Index Key	0001522767
Amendment Flag	false

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