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Medical Marijuana, Inc. Reports 2019 Fourth Quarter and Year-End Financial and Operational Results: Net Revenue Surpasses $75 Million, Increasing 26% Year-Over-Year and Positive Adjusted EBITDA

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SAN DIEGO, April 29, 2020 /PRNewswire/ -- Medical Marijuana, Inc. (OTC:MJNA) (the "Company"), the first-ever publicly traded cannabis company in the United States that launched the world's first-ever cannabis-derived nutraceutical products, brands and supply chain, announced today financial results for the quarter and year ending Dec. 31, 2019, and provided an overview of recent operational highlights.

Year-End 2019 Financial and Operational Highlights

  • Generated $75.6 million in net revenue in 2019, a 26.3% increase year-over-year when compared to 2018;
  • GAAP Net income increased to $84.4 million;
  • Company reported positive adjusted EBITDA of $139 thousand as compared to a loss of $1.2 million in 2018
  • GAAP Gross profit for the year was $57.7 million, an increase 900 basis points over 2018;
  • GAAP General & Administrative expense decreased as a percentage of sales from 24.1% in 2018 to 16.9% in 2019;
  • GAAP Sales & Marketing expense decreased as a percentage of sales from 56.6% in 2018 to 54.6% in 2019;
  • Cash position at the end of 2019 was $5.8 million, an increase of 35.2% over 2018;
  • Pharmaceutical investment company Kannalife, Inc. began trading on the OTC Venture Market under the ticker symbol "KLFE," adding to the Company's Other Assets in Investments - Equities Securities
  • Achieved positive results from a one-year milestone in long-term stability testing on its flagship THC-free CBD oil product Real Scientific Hemp Oil-X™ (RSHO-X™)
  • CEO Dr. Stuart Titus was invited to speak at the FDA Hearing on Cannabis and CBD Products in May 2019
  • Subsidiaries HempMeds®, Dixie Botanicals® and Kannaway® received the U.S. Hemp Authority Certification Seal
  • Subsidiaries HempMeds® and Kannaway® became the first companies to have their CBD products listed in the Prescribers' Digital Reference

"In 2019, Medical Marijuana, Inc. and its subsidiaries continued to execute on our strategic growth and fiscal responsibility action plan that rendered our best results yet and I could not be more excited to share them with shareholders," said Medical Marijuana, Inc. CEO Dr. Stuart Titus. "We were able to not only generate increased revenues but focus on our bottom line by making strategic adjustments to expenditures."

"In addition to our success in the U.S., our international operations have continued to flourish in Europe, Latin America and we are excited for our development in Asia," said Medical Marijuana, Inc. COO Blake Schroeder. "We hope that these efforts will continue to build shareholder value and help bring our industry-leading products to broader audiences worldwide."

Operating Results – Year-End 2019 Compared to Year-End 2018
Sales for 2019 exceeded $75.5 million, an increase of 26.3% over 2018. The Company executed on a strategic plan that resulted in gross margins increasing from 67.4% in 2018 to 76.4% in 2019.

Financial Data: Year-End 2019 Compared to Year-End 2018 Numbers
(in thousands)
Gross Revenue:
2019 – $75,560
2018 – $59,825

Cost of Goods Sold:
2019 – $17,829
2018 – $19,485

Gross Margin:
2019 – 76.4%
2018 – 67.4%

Net Ordinary Income/(Loss)
2019 – $3,298
2018 – ($8,018)

In 2019, Medical Marijuana, Inc. had a number of significant accomplishments, including:

  • The Company was recognized as a top-five hemp-derived CBD company by Yahoo Finance
  • Subsidiaries HempMeds® and Kannaway® became the first companies to have their CBD products listed in the Prescribers' Digital Reference
  • Subsidiaries HempMeds®, Dixie Botanicals® and Kannaway® received the U.S. Hemp Authority Certification Seal
  • Dr. Titus was invited to speak at the FDA Hearing on Cannabis and CBD Products in May 2019
  • Brooke Beers was promoted to Chief Financial Officer

Medical Marijuana, Inc. subsidiary Kannaway® was the first direct sales company to offer phyto-cannabinoid botanical products to consumers. Kannaway® encourages its brand ambassadors to create their own successful distribution businesses that will positively benefit the well being of the people around them.

In 2019, Kannaway® had a number of significant accomplishments, including:

  • Welcomed former professional athletes such as NBA All-Star James Donaldson, NFL Veteran Bryan Barker, Former NFL Placekicker Mike Hollis, Former Miami Dolphins Linebacker Bruce Bannon, Kansas City Chiefs Hall-of-Famer John Alt, Cincinnati Bengals Super Bowl Legend Kenneth Christopher "Skip" McClendon, NFL Veteran Mark Walczak, and U.S. Paralympic Athlete Samantha Tucker to the Kannaway® Sports team
  • Was listed among the Top 100 Direct Selling Companies in the world by Direct Selling News
  • Received a Gold Stevie® Award in the Medium Company of the Year - Health Products & Services category and a Bronze Stevie® Award in the Consumer Products Category for its CBD skincare line in The 17th Annual American Business Awards®
  • Expanded its international leadership team by hiring Peter Dale as General Manager of the Company's Asia Division
  • Became a member of the European Industrial Hemp Association (EIHA)
  • Presented to the European Parliament during the special "The State of Hemp in Europe" event in Brussels, Belgium
  • Received a Bronze Best in Biz Award for Most Innovative Product of the Year – Consumer for its CBD products
  • Respected industry group, the U.S. Hemp Roundtable, selected the Company to join its Board of Directors
  • The Golden Bridge Awards® honored the Company with a Silver Award for Company of the Year in the Healthcare Products and Services category
  • Secured a 2019 BIG Awards for Business award for Small Business Company of the Year in the Life Sciences, Health, Wellness, and Nutrition category
  • CEO Blake Schroeder received several prestigious awards including a Gold Award for the International Executive of the Year from the Golden Bridge Awards, a Silver International Stevie Award for Executive of the Year – Healthcare Products and Services, Small Business Executive of the Year in the Life Sciences, Health, Wellness, and Nutrition category from the 2019 BIG Awards for Business, and the Best in Biz Bronze Award for Executive of the Year – Small Companies

Medical Marijuana, Inc.'s wholly-owned subsidiary HempMeds®, which operates in North America in the U.S. as well as in Latin America as HempMeds® Brasil and HempMeds® Mexico offer the portfolio's predominate consumer brands Real Scientific Hemp Oil™ (RSHO™)  and Dixie Botanicals®.

In 2019, HempMeds® had a number of significant accomplishments, including:

  • Launched new product lines including RSHO™ Maximum Strength CBD oil, functional Everyday Wellness, Personal Care for Hair and Skin and Hemp for Pets
  • Partnered and signed distribution agreements with new partners such as Mr. Checkout, Shopaholic Boutique Inc., Vim N' Vigor, Surface Products, Leafly Market and more than 100 other retailers
  • Sponsored Harper's Heroes First Annual Gala in partnership with non-profit organization ECHO Connection
  • HempMeds® Brasil hosted several cannabinoid medicine courses for doctors in Brazil
  • HempMeds® Brasil sponsored International Autistic Week in Ribeirao Preto, Brazil
  • Raul Elizalde, President of HempMeds® Mexico and Latin American operations, spoke at HempToday™'s Latin American and Caribbean Hemp Summit
  • HempMeds® Brasil organized and executed an International Symposium on Cannabinoid Medicine for Brazilian doctors in San Diego
  • HempMeds® Brasil Vice President Caroline Heinz was chosen to present at the MJBizDaily Marijuana Business Conference in Las Vegas
  • Appointed Gabriel Barbosa, MSc as HempMeds Brasil® Scientific Projects and Regulatory Developing Analyst in Brazil

About Medical Marijuana, Inc.
We are a company of firsts®. Medical Marijuana, Inc. (MJNA) is a cannabis company with three distinct business units in the non-psychoactive cannabinoid space: a global portfolio of cannabinoid-based nutraceutical brands led by Kannaway® and HempMeds®; a pioneer in sourcing the highest-quality legal non-psychoactive cannabis products derived from industrial hemp; and a cannabinoid-based clinical research and botanical drug development sector led by its pharmaceutical investment companies and partners including AXIM® Biotechnologies, Inc. and Kannalife, Inc. Medical Marijuana, Inc. was named a top CBD producer by CNBC. Medical Marijuana, Inc. was also the first company to receive historic import permits for CBD products from the governments of Brazil, Mexico, Argentina, and Paraguay and is a leader in the development of international markets. The company's flagship product Real Scientific Hemp Oil has been used in several successful clinical studies throughout Mexico and Brazil to understand its safety and efficacy.

Medical Marijuana, Inc.'s headquarters is in San Diego, California, and additional information is available at OTCMarkets.com or by visiting www.medicalmarijuanainc.com. To see Medical Marijuana, Inc.'s corporate video, click here.

Shareholders and consumers are also encouraged to buy CBD oil and other products at Medical Marijuana, Inc.'s shop.

FORWARD-LOOKING DISCLAIMER

This press release may contain certain forward-looking statements and information, as defined within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and is subject to the Safe Harbor created by those sections. This material contains statements about expected future events and/or financial results that are forward-looking in nature and subject to risks and uncertainties. Such forward-looking statements by definition involve risks, uncertainties and other factors, which may cause the actual results, performance or achievements of Medical Marijuana, Inc. to be materially different from the statements made herein.

FOOD AND DRUG ADMINISTRATION (FDA) DISCLOSURE

These statements have not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure, or prevent any disease.

LEGAL DISCLOSURE

Medical Marijuana, Inc. does not sell or distribute any products that are in violation of the United States Controlled Substances Act.

CONTACT:

Public Relations Contact:
Andrew Hard
Chief Executive Officer
CMW Media
P. 858-264-6600
andrew.hard@cmwmedia.com
www.cmwmedia.com

Investor Relations Contact:
P. (858) 283-4016
Investors@medicalmarijuanainc.com  

Non-GAAP Net Income/(Loss) is defined as net income/(loss) excluding share-based compensation expenses. Although share-based compensation is necessary to attract and retain quality employees, our consideration of share-based compensation places its primary emphasis on overall shareholder dilution rather than the accounting charges associated with such grants. Because of the varying availability of valuation methodologies and subjective assumptions, we believe that the exclusion of share-based compensation allows for more accurate comparison of our financial results to previous periods. In addition, we believe it useful to investors to understand the specific impact of the application of the fair value method of accounting for share-based compensation on our operating results.

Adjusted EBITDA is defined by the company as EBITDA (net income (loss) adjusted for interest income/(expense), income taxes, depreciation and amortization), further adjusted to exclude certain non-cash expenses and other adjustments as set forth below (share-based compensation, litigation expenses, deferred revenues* and gains/(losses) on investments). We use adjusted EBITDA because we believe it more clearly highlights trends in our business that may not otherwise be apparent when relying solely on GAAP financial measures, since adjusted EBITDA eliminates from our results specific financial items that have less bearing on our core operating performance.

A reconciliation from our net income / (loss) to adjusted EBITDA, a non-GAAP measure, for the quarter ended December 31, 2019, and 2018 is below:


Three Months Ending June 30


2019


2018

Net Income (loss)

$               84,404


$            ( 202,630)

  Depreciation

306


124

Taxes

574



  Interest expense

578


1,615

EBITDA

85,862


(200,891)

  Stock-based compensation

(1,510)


4,371

  Gain (loss) on investments

(82,243)


189,974

  Litigation expense

858


1,100

Other Income

(1,627)



Bad Debt

1,699



  Inventory adjustments

(1,004)


1,209

  Deferred revenue

(1,896)


2,992

Adjusted EBITDA

$                     139


$                   (1,245)

 

Cision View original content:http://www.prnewswire.com/news-releases/medical-marijuana-inc-reports-2019-fourth-quarter-and-year-end-financial-and-operational-results-net-revenue-surpasses-75-million-increasing-26-year-over-year-and-positive-adjusted-ebitda-301049141.html

SOURCE Medical Marijuana, Inc.

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