Item 1. Business
Item 1. Business
Company Overview
We are a multi-state cannabis operator in the United States, headquartered in Norwood, Massachusetts, dedicated to improving lives every day through our high-quality products, our actions, and our values. We develop, own, and manage seed to sale state-licensed, state-of-the-art, regulatory-compliant facilities for the cultivation, production, and dispensing of medicinal and adult-use cannabis. We have created and continue to develop our own brands of premium cannabis flower, concentrates, edibles, and other precision-dosed products utilizing our proprietary strains and formulations. We also license our proprietary brands, along with other top cannabis products, in domestic markets.
Our common stock trades on both the OTCQX and the Canadian Securities Exchange under the ticker symbol MRMD.
Company History
In 2014, we entered the cannabis industry as an advisory and real estate management firm that procured state-issued cannabis licenses on behalf of our clients, developed cannabis facilities that we leased to these newly licensed companies, and provided industry-leading expertise and oversight in all aspects of their cannabis operations.
In 2018, we made the strategic decision to transition from an advisory business to a direct owner and operator of cannabis licenses in high-growth states. Key to this transition was the acquisition and consolidation of our clients for whom we had played a key role in their success, including securing their cannabis licenses, developing facilities that are models of excellence, funding their operations, and providing operational and corporate guidance. We have successfully acquired and integrated certain client businesses in several states, and believe that our prior experience in managing these businesses has provided us with the skills and expertise required to manage the continuing growth of these operations.
Throughout our history, we have created our own brands of craft-quality cannabis flower, concentrates, edibles, and other precision-dosed products, which have been award winners and top sellers in multiple states. Applying proprietary cultivation and processing procedures and following the strictest quality standards, our portfolio of brands was developed to fill gaps in the marketplace and meet specific effects desired by today’s cannabis consumer. We invest in ongoing research and development and intend to continue to introduce new and innovative products in the future.
Today, we operate state-of-the-art, regulatory compliant cannabis cultivation and processing facilities that grow and manufacture our proprietary, high quality, branded cannabis consumer products. We distribute our products via the wholesale market to hundreds of dispensaries operated by other cannabis license holders. We also operate our own dispensaries, which are recognized for their excellent customer service and product selection. Revenue is generated at these dispensaries through the sales of our own products and those marketed by other cannabis license holders.
We utilize dedicated sales teams to sell our products to wholesale buyers representing the dispensaries operated by other cannabis license holders. Customers at our own dispensaries purchase cannabis for, among other reasons, the relief of pain and stress, to promote better sleep, and to address other health and wellness needs. We deploy a variety of marketing strategies to drive the sales of our products, including customer loyalty programs, digital advertising, in-store displays and public relations.
We also generate nominal revenue from licensing, management fees, and real estate income.
Our Strategic Growth Plan
We continue to focus on executing our strategic growth plan, with priority on activities that include the following:
• Completing the acquisition and consolidation of our original advisory clients:
◦ First State Compassion Center ("FSCC") in Delaware is the last of these businesses, which acquisition we completed on February 28, 2025 in accordance with the Omnibus Agreement between MariMed and FSCC, dated July 1, 2023, that defined the terms under which FSCC's cultivation and processing facilities and two dispensaries would be acquired by MariMed (the "Omnibus Agreement").
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• Increasing our product brand revenue by:
◦ strengthening our cultivation and processing capabilities to ensure a reliable, high-quality supply of raw materials that will enhance product consistency, quality, and innovation;
◦ developing and launching innovative new products that align with consumer preferences and demand;
◦ offering new effects and formulations that differentiate our existing brands;
◦ broadening our distribution network in existing markets to maximize our reach and brand visibility; and
◦ expanding our distribution into new markets through new license applications, acquisitions of existing cannabis businesses, and/or identification of qualified licensing partners.
• Increasing retail store revenue by:
◦ driving additional and higher average transactions in our existing stores through an outstanding customer experience that prioritizes our product selection and the ease of the shopping experience; and
◦ expanding our dispensary footprint in current markets where regulations allow and into new markets through new license applications and/or acquisitions of existing cannabis businesses.
In November 2023 we announced the closing of a $58.7 million secured credit facility with Needham Bank, a Massachusetts co-operative bank (“Needham Bank”), at a lower rate compared to both our previous debt facility with Chicago Atlantic Admin, LLC (“Chicago Atlantic”) and rates achieved in debt transactions by other cannabis companies. This debt refinancing enabled us to repay our term loan with Chicago Atlantic, satisfy the mortgage on our New Bedford and Middleborough, Massachusetts facilities with Bank of New England, and reduce the principal outstanding on the note we issued to the sellers in connection with our acquisition of the operating assets of Ermont, Inc. The credit facility has allowed us to unencumber our operating assets in Illinois, Ohio and Delaware, as well as our branded products, providing more options for future financing at attractive rates should we choose to increase our borrowings.
Our Competitive Strengths
We believe that our strengths in the following areas provide us with certain competitive advantages and the tools necessary to successfully implement our strategic plans:
Portfolio of Proprietary and Innovative Brands
We have developed a portfolio of unique and cannabis market leading brands which are currently distributed in cannabis-legal states. Our brands and products are developed with a consumer first approach and are available in the most popular consumption formats, including whole flower, pre-rolled flower, vape cartridges, concentrates, and edibles. We intend to continue expanding our brand portfolio to meet the effects that today’s cannabis consumers seek.
Our portfolio includes several award-winning brands that are among the top sellers in markets where they are available. They include:
• Nature’s Heritage™ , a premium brand of cannabis flower, vapes, and concentrates;
• Betty’s Eddies™ , cannabis fruit chews that deliver better sleep, pain relief, stress relief, and more. The Betty's Eddies line also includes a limited collection of cannabis-infused ice creams created in partnership with ice cream brand Emack & Bolio's ®;
• Bubby’s Baked™ , soft and chewy baked goods and a hot chocolate mix;
• Vibations™ , a cannabis-infused hydrating drink mix for discrete, on-the-go consumption; and
• InHouse™ , a value-priced brand of flower, vapes, and edibles.
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Retail Footprint and Operations
Our expanding retail footprint and operations drive a significant portion of our revenue and align strategically with our drive to grow a portfolio of proprietary and innovative brands. All retail stores are positioned in states that offer a strong consumer base and favorable regulatory environments that promote market stability. We believe today’s cannabis consumer seeks a shopping experience that is comfortable, educational, and easy. Our dispensaries are models of excellence in this regard. We carefully curate a menu of the highest quality brands and products, and merchandise them in beautifully designed, upscale environments. We invest in budtender and retail personnel training, as well as product programming displayed on in-store monitors to help deliver exceptional customer service throughout the shopping experience. In Massachusetts and Delaware, we complement our in-store operations with a home delivery option. We intend to do the same in other markets once permitted by state regulations.
Finally, our retail footprint and operations enable our ability to drive wholesale distribution through reciprocal relationships (balance of trade relationships) that are common in the cannabis industry. This relationship has accelerated MariMed brands, such as Betty’s Eddies, to market leadership positions in most states in which we operate. Additionally, we gain significant customer insights from our retail operations which allow us to rapidly innovate to meet emerging consumer trends. Combined, our retail footprint and our robust wholesale brand portfolio work together to promote overall growth in revenue, gross profit and market share.
Experienced Management
Our management team is one of the most experienced and longest tenured in the cannabis industry. Several of our executive team members, including our President and Chief Executive Officer, our Chief Operating Officer, and our Chief Revenue Officer, have each worked in the industry for a decade or more. Our leadership team has achieved considerable success creating and growing businesses in the industry by successfully applying for cannabis licenses, overseeing the development of cannabis operations and facilities, raising capital to purchase and develop facilities, and conducting operations in adherence with regulations established by individual state governments, including all environmental and social governance requirements. The strength of our executive team is further enhanced by other members who have significant senior management experience and expertise working in beer and alcohol, retail, consumer products, and marketing industries.
Current and Pending Operations
Over the past several years, we have invested in our own operating facilities, applied for and secured new licenses, and acquired new assets to strengthen and expand our brand portfolio and our retail and wholesale networks. We currently hold a total of 33 cannabis licenses in six states. We believe our investment and expansion initiatives will enable us to capture additional market share and provide us with a stronger presence in the states where we conduct business.
We believe that operating as a fully vertical, seed to sale cannabis company provides us the greatest opportunity to maximize revenue and profits in each state where we operate. To date, we are fully vertical through businesses we either own or manage in Illinois, Maryland, Massachusetts, and Delaware.
Our current and pending operations are as follows:
Massachusetts
Massachusetts operates both adult-use and medical cannabis programs. According to the Massachusetts Cannabis Control Commission (the "CCC"), the state’s cannabis market generated $1.6 billion in sales in 2024 (source: Massachusetts Cannabis Control Commission).
We operate three Panacea Wellness- branded dispensaries in the Boston area:
• a dispensary in Middleborough that is licensed for both medical and adult-use cannabis sales ;
• an adult-use dispensary in Beverly; and
• a dispensary in Quincy that had initially been licensed for medical sales and which commenced adult-use cannabis sales in 2024.
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Our three retail stores are easily accessible to all cannabis consumers in eastern Massachusetts. Access is further enhanced through home delivery as the result of our April 2023 investment in Artis LLC (d/b/a Little Dog Delivery).
We also operate a cultivation and production facility in New Bedford, as well as a cultivation facility in Quincy.
Delaware
Delaware’s medical cannabis program has approximately 17,000 registered patients, according to the Delaware Department of Health and Social Services 2023 annual report. It legalized adult-use cannabis sales in 2023, with such sales expected to commence in 2025.
We provide comprehensive management and real estate services to FSCC, our longstanding client in Delaware. We were instrumental in helping FSCC obtain Delaware’s first-ever seed to sale medical cannabis license in 2014. Today, FSCC operates under two of only eleven cannabis licenses in the state.
We developed and currently lease to FSCC a number of facilities, including:
• a cultivation facility, production kitchen, and dispensary in Wilmington;
• a cultivation facility in Milford; and
• a dispensary in Lewes.
FSCC licenses and distributes all of our top selling edibles brands in the state. We anticipate that we will acquire the assets of FSCC when adult-use sales commence in 2025. State law, which had prevented such a transaction, has been amended as part of the expansion of Delaware’s legal cannabis program.
Illinois
Illinois permits both adult-use and medical cannabis programs. According to the Illinois Department of Financial and Professional Regulation, the state reported over $2 billion in total legal cannabis sales in the rolling twelve months ended June 30, 2024. With a population of nearly 13 million, Illinois is one of the largest and fastest-growing cannabis markets in the United States.
We operate five Thrive -branded dispensaries in the state, including an adult-use dispensary in Metropolis, near the Kentucky border, an adult-use dispensary in Casey, near the Indiana border, and an adult-use dispensary in Mt. Vernon. We also operate dispensaries in Anna and Harrisburg that each serve both medical and adult-use customers. These five locations provide easy access for most residents in southern Illinois and several states that don’t have legal cannabis programs, including Kentucky, Indiana, and Tennessee.
In December 2023, we completed construction of and commenced operations of our processing facility in Mt. Vernon. We began selling certain of our award-winning branded edibles products and InHouse vape products in our own dispensaries and in certain other dispensaries in the state during the final weeks of 2023. We significantly increased distribution of our core products throughout the state in 2024.
On September 12, 2024, we received final regulatory approval for cultivation in the Mt. Vernon facility, establishing our Illinois operations as fully vertical. We immediately began our cultivation activities in the facility and expect to distribute Nature’s Heritage flower and vapes throughout the state in the second quarter of 2025.
Maryland
Maryland operates both adult-use and medical cannabis programs. The state’s adult-use program began on July 1, 2023, making 2024 the first full year of the program. According to the Maryland Cannabis Administration, the state reported $1.1 billion in medical and adult-use cannabis sales during the first 12 months of the adult-use program, positioning it among the top legal cannabis markets in the United States.
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Our operations are fully vertical in Maryland, including a cultivation and processing facility in Hagerstown which produces and distributes all of our premium branded cannabis flower, concentrates, vapes and edibles. In 2024 we completed the expansion of the facility to increase our cultivation capacity to meet the increased demand for our products.
We also operate two Thrive -branded medical and adult-use dispensaries in Maryland. One is located in Annapolis and the other is located in the Upper Marlboro part of Prince George’s County.
The Upper Marlboro dispensary became part of our network as the result of the April 9, 2024 acquisition of the medical cannabis retail license and certain assets of Our Community Wellness & Compassionate Care Center, Inc. ("MedLeaf") in exchange for $5.25 million, adjusted for certain items. The purchase consideration was comprised of $2.0 million of cash, a $2.0 million note issued to the sellers of MedLeaf (the "MedLeaf Sellers") at the closing, and shares of our common stock with a fair value of $1.25 million, based on a formulaic calculation, that were issued at the closing.
Missouri
Missouri permits both successful medical and adult-use cannabis programs. According to the Missouri Division of Cannabis Regulation, over $1.4 billion worth of legal cannabis was sold in Missouri in 2024.
We announced a management contract in September 2022 that would enable us to sell certain of our award-winning branded edibles products in the state. We experienced significant regulatory delays before receiving approval to begin sales, which commenced in the final weeks of the 2024 calendar year.
Ohio
Ohio’s successful medical cannabis program expanded to include adult-use sales in June 2024. BDSA, a leading provider of market intelligence for the cannabis industry, estimates that total cannabis sales in Ohio will reach $802 million in 2025.
Our Thrive -branded medical cannabis dispensary in Tiffin, which we opened in 2023, received regulatory approval to commence adult-use sales in September 2024.
Recent Development
On February 28, 2025, we completed the acquisition of FSCC in accordance with the terms of the Omnibus Agreement. We believe this recent development is critical to the implementation of our strategic growth plan.
Competition
In the markets where we currently operate, we face competition from licensed cannabis companies of varying sizes and geographic reach. These include other Multi-State Operators (MSOs) who, like our company, maintain vertical operations in at least two states. Others, called Single State Operators, are either fully vertical in just one state focused solely on producing and selling cannabis products, or operate solely as dispensaries and sell the goods of other businesses. Some of our competitors that create and sell their own products have offerings that are on par with those we offer. We believe that by utilizing our own best practices and operational expertise, we are able to produce premium cannabis products at one of the lowest cost structures in the industry, which enables us to remain competitive in our markets. However, our sales could decline significantly if our competitors develop and market products that are more effective, more convenient, or less expensive than our products.
As cannabis products become more mainstream and gain greater acceptance, it is likely that larger and more established companies with greater available resources, including name recognition and national distribution networks, will enter the market. However, we believe that there are many barriers to entry, and to duplicate our licenses, knowledge, and facilities would be costly and time-consuming. We have upgraded our marketing efforts to expand branding and distribution, as well as implemented home delivery, where permissible, and other business strategies developed by more conventional industries. As a result, we have successfully increased the number of retail transactions at our stores and increased market share of our core products sold through wholesale. We have also developed a loyal customer base at our retail locations through the launch and continued refinement of customer loyalty programs.
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Intellectual Property
We own registered trademarks for Betty’s Eddies, Nature’s Heritage , and Thrive , and are pursuing registration of the Bubby’s Baked, InHouse, and Vibations trademarks with the United States Patent and Trademark Office.
Our proprietary processing and manufacturing techniques and technologies, while not patented, are kept strictly confidential. We enter into and enforce confidentiality agreements with key employees and consultants to protect our intellectual property, trade secrets, and general know-how.
Our Employees
At December 31, 2024, we had a total of 832 employees, of which 715 were full-time, plus an additional 117 employees in the aggregate, primarily full-time, who are employed by our managed cannabis-licensed client and the delivery company in which we hold a minority interest.
Website Access to Company Reports
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Definitive Proxy Statements, Current Reports on Form 8-K and all amendments to those reports are available free of charge on the Company’s website at www.marimedinc.com as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC, or as filed with the Canadian securities regulatory authorities on the SEDAR website. In addition, copies of our annual report will be made available, free of charge, upon written request.
Our common stock trades on both the OTCQX and the Canadian Securities Exchange under the ticker symbol MRMD.