Body and Mind Is Capturing Market Share In Some Of The Most Sought After Cannabis Markets In The

United States

May 3, 2022

Although the United States (US) cannabis market has showing strong growth so far this year, the sector has been under considerable pressure.

From the opening of new recreational markets to voting on pro-cannabis legislation, we believe the US cannabis industry could be reaching an inflection point. States that have legalized recreational cannabis are generating millions of dollars of tax revenue and we are not surprised to see conservative states get on the cannabis bandwagon.

We continue to have a long-term bullish view on the US cannabis industry and believe the market is discounting the growth prospects that are associated with mid and large-scale multi-state operators (MSOs).

We consider Body and Mind Inc. (CSE: BAMM) (OTC: BMMJ) to be an undervalued US operator with leverage to several of the most attractive cannabis markets. During the last year, the company has been executing on a low-cost expansion strategy and expanded into California, Michigan, Ohio, and Arkansas.

Prior to entering these markets, Body and Mind was capturing market share in Las Vegas while also generating significant brand awareness. Sin City attracts more than 40 million visitors every year and we consider the market to be an attractive launch pad for cannabis brands.

A key reason for Body and Mind’s success in a market as competitive as Las Vegas is due to the strength of the management team. In the cannabis industry, the management team is the most important aspect of any business, and we are favorable on the expertise that is associated with Body and Mind’s leadership team.

When comparing Body and Mind’s expansion strategy with that of other US operators, we are impressed with its management team’s ability to identify, acquire, and revive distressed cannabis assets. The US cannabis operator was able to successfully expand into new markets for a fraction of the cost of other operators and we consider this to be a core pillar of our bullish view on the business.

When analyzing the company on valuation metrics, we believe Body and Mind is trading at a discount and our readers should be aware of this. With leverage to some of the largest recreational cannabis markets in the US, the company has significant growth catalysts and is an operator that is flying under the radar.

Over the next year, we expect to see renewed interest in operators like Body and Mind and believe the current weakness is transitory. Body and Mind has improving fundamentals, owns strategic assets, and has a favorable risk-reward profile. With FY 2021 revenues of $28 million (USD) ($35.5 million CAD) and a market capitalization that is below $25 million (CAD), we are of the opinion that Body and Mind has considerable upside potential and our readers need to be aware of the opportunity.

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