Cantor Downgrades MedMen After Steep Rally

Shares of MedMen Enterprises Inc. MMNFF remain volatile and have gained 197% year to date, outperforming all multi-state operators (MSOs), according to Cantor Fitzgerald.

The MedMen Enterprises Analyst: Pablo Zuanic downgraded the rating for MedMen Enterprises from Neutral to Underweight, while withdrawing the earlier price target of $12.

The MedMen Enterprises Thesis: The stock has limited fundamental value, taking into account the company’s financial debt, Zuanic said in the downgrade note.

“The company sold its store in Evanston IL (the only store in town), it has put its Scottsdale AZ store up for sale (AZ just started rec sales), and in late Feb it announced plans to divest its NY assets,” the analyst noted. “After the recent divestitures, the company has 14 operating stores,” he added.

“Privately-owned Ascend Wellness paid $73Mn to MedMen for an 86.7% equity stake in the NY operation plus the value of an option to buy the remaining 13.3% stake for $10Mn if NY goes rec. Effectively, the deal valued the NY MedMen franchise at $83Mn,” Zuanic wrote.

MMNFF Price Action: Shares of MedMen Enterprises had declined by 5.07% to 38 cents at the time of publication Wednesday.