Body and Mind Has Had A Flawless 2021 In Terms Of Execution And They Are Surely One To Watch In 2022

While attending MJ Biz Con in Las Vegas in October, we had the opportunity to meet with Body and Mind’s (CSE: BAMM) (OTCQB: BMMJ) management team and tour the facility.

Although the facility does not stand out from a size standpoint, the level of efficiency at the facility is beyond impressive. We were surprised with the amount of revenue that is generated by the Las Vegas operation and this made us even more bullish as Body and Mind has been executing on a low-cost multi-state expansion strategy.

Based on our tour of the facility and our meeting with the management team, we determined that Body and Mind deserves to be highlighted in the series of 7 articles that we are publishing on North American cannabis companies that are positioned to record growth in 2022. Below, we mention 7 important developments and potential catalysts for the business and believe our readers should be aware of these factors.

1. Last month, Body and Mind released fourth quarter financial results and issued an operational update. During the period, the company generated $8.14 million of revenue and $1.53 million of adjusted EBITDA*. Operational cash flow is a metric that stands out to us in the quarterly report. In the fourth quarter, the US MSO generated positive operational cash flow and this is a metric that we will continue to follow.
2. We are of the opinion that Body and Mind’s management team has been flawlessly executing on a low-cost multi-state expansion strategy. We believe the business is in the early innings of a major growth cycle and has significant catalysts for growth. In 2022, we will be most excited about Body and Mind’s expansion in California, Ohio, and Michigan.
3. In Ohio, we believe Body and Mind has already achieved important milestones and is well positioned to capture market share in the state. So far, the MSO has produced and shipped its first batch of branded products and we find this to be worth noting. During the fourth quarter, Body and Mind completed the construction of a 4,000 square foot production facility and the acquisition of a dispensary and production facility. As a result, we forecast a spike in production capacity and expect Ohio to serve as a catalyst in 2022.
4. Michigan is a market that we have been highly bullish on and are favorable on the leverage that Body and Mind has to it. In October, the state reported a record amount of revenue from the sale of cannabis. We are of the opinion that Body and Mind is well positioned to capitalize on the market and will monitor how it executes on a vertical market expansion strategy. The company is near completion of their Body and Mind branded dispensary and anticipates opening in the next several weeks. The company leased a commercial building with the goal of developing a cultivation and production facility that has 50,000 square feet of canopy and a production facility. Like Ohio, we expect Michigan to be a growth catalyst in 2022 and will monitor how this aspect of the story advances.
5. Last year, Body and Mind completed the transfer of ShowGrow’s Long Beach dispensary license in California to a subsidiary that is wholly owned by the company. California is the largest cannabis market in the world, and we are favorable on the leverage that Body and Mind has to it. In 2022, we expect the California market to have a positive impact on Body and Mind’s revenue growth and believe this aspect of the story is underappreciated.
6. In the near future, we expect to learn more about Body and Mind’s agreements with two entities in Illinois that have been identified in the state’s Department of Financial and Professional Regulation (IDFPR) as recipients of conditional recreational dispensary licenses in the greater Chicago-area. Illinois has been one of the fastest growing markets in the US and we are bullish on the potential for Body and Mind to capitalize on it. Due to legal delays against the state holding up issuing any licenses in Illinois, we have not included Illinois in our analysis of the company’s growth prospects and business fundamentals. We believe a positive development in the state would prove to be a huge catalyst for the business.
7. At current levels, Body and Mind’s market capitalization is less than C$50 million and we find the risk-reward profile to be favorable. With more than $40 million of total assets on the balance sheet ($7 million of cash), we believe that Body and Mind is undervalued and expect this to change as the business starts generating revenue in new markets. The management team plans to use the cash to capital on the new markets it is levered to and we are favorable on its ability to use the resources on hand to organically grow the business.

If you are interested in learning more about Body and Mind, please send an email to support@technical420.com with the subject “Body and Mind” to be added to our distribution list.

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*Adjusted EBITDA is a Non-GAAP metric used by management that does not have any standardized meaning prescribed by U.S. GAAP and may not be comparable to similar measures presented by other companies. Management defines the Adjusted EBITDA as the Income (loss) from operations, as reported, before interest, taxes, and adjusted for removing other non-cash items, including the stock-based compensation expense, depreciation, and further adjustments to remove acquisition related costs or gains. Management believes Adjusted EBITDA is a useful financial metric to assess its operating performance on a cash adjusted basis before the impact of non-cash items and acquisition activities. The most comparable financial measure calculated and presented in accordance with U.S. GAAP is net operating income (loss), which was presented above prior to the Adjusted EBITDA figure.

Pursuant to an agreement between StoneBridge Partners LLC and Body and Mind Inc. we have been hired for a period of 90 days beginning October 1, 2021 to publicly disseminate information about (BAMM) including on the Website and other media including Facebook and Twitter. We are being paid $5,000 per month (BAMM) for or were paid “ZERO” shares of unrestricted or restricted common shares. We plan to sell the “ZERO” shares of (BAMM) that we hold during the time the Website and/or Facebook and Twitter Information recommends that investors or visitors to the website purchase without further notice to you. We may buy or sell additional shares of (BAMM) in the open market at any time, including before, during or after the Website and Information, provide public dissemination of favorable Information.

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Michael Berger is Managing Partner of StoneBridge Partners LLC. SBP continues to drive market awareness for leading firms in the cannabis industry throughout the U.S. and abroad.

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