Aug 3, 2022
During the last year, Body and Mind Inc. (CSE: BAMM) (OTCQB: BMMJ) has expanded into several burgeoning cannabis markets in the United States (US).
Body and Mind’s management team has proven its ability to execute on an efficient multi-state expansion strategy and we believe the US multi-state operator (MSO) is one of the most undervalued businesses in the cannabis sector.
When we analyze a US cannabis company, we conduct due diligence on the state(s) it has leverage to. We prefer operators that are levered to states that have placed a cap or limited the number of cannabis licenses that can be issued. We believe that licenses in states which have a limit are more valuable and consider this to be an important part of the Body and Mind story.
From Michigan to Ohio, the emerging MSO has been able to enter several limited license cannabis markets and we believe this has enhanced the growth profile of the business. Most recently, Body and Mind was awarded conditional dispensary licenses in the Chicago area. Based on population alone, we consider the windy city to be an attractive market and will monitor how this aspect of Body and Mind’s story advances over the next year.
Although Body and Mind reported several major developments in the first half of the year (as well as the second half due to the Chicago license announcement), the stock has lost more than 60% of its value. With a market capitalization that is less than C$15 million, we find the risk-reward profile to be favorable and believe the business is very undervalued.
Going forward, we are excited about Body and Mind and believe the business has several potential growth catalysts. Three key points of the Body and Mind story that our readers should be aware of include:
In late June, Body and Mind announced third quarter financial results and reported $7.88 million of revenue for the period. The MSO reported to have $3.71 million of cash at the end of the quarter and we are favorable on the revenue growth (on a year-over-year basis) that was reported.
Prior to the earnings report, the MSO reported to have expanded the product line in Ohio and to have started to sell concentrates in Arkansas. Concurrent with the announcement, Body and Mind also reported to have collaborated with Froot to create custom branded products at all of its dispensaries in California. Going forward, we expect these markets to play an important role in how the brand continues to gain traction.
A core focus of the company has been on the balance sheet. Between the cash on hand and the previously announced agreement to extend debt financing, we believe the business is positioned to execute on the states it has leverage to.
https://technical420.com/cannabis-article/body-and-mind-inc-continues-to-expand-its-footprint-and-execute-in-key-u-s-cannabis-markets/#
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