Body and Mind: An Undervalued US Growth Story

2022 was a challenging year for the cannabis sector and an end of year selloff did not help improve investor optimism for the industry.

Although the cannabis sector is facing major headwinds after the SAFE Banking Act was not approved by Congress, we consider the recent selloff to be overdone. As a result, we have been analyzing North American cannabis companies to identify businesses that we consider to be underappreciated by the market.

Body and Mind is an Execution and Growth Story

We consider Body and Mind Inc. (CSE: BAMM) (OTCQB: BMMJ) to be an undervalued multi-state operator (MSO) due to the significant potential catalysts that it has for growth and want to provide an update on the business.

Body and Mind is an MSO that we have become increasingly bullish on and want our readers to be aware of the business. At current levels, we believe the company is significantly undervalued and is a misunderstood opportunity.

In late December, the multi-state operator reported several strategic developments which are a testament to how much the business has advanced. From increasing the amount of resources on hand to entering a new market, Body and Mind reported several transformational announcements which we have highlighted below:

1. Strengthened Balance Sheet – Body and Mind completed an $3 million convertible unsecured debenture financing at 8% interest with two strategic investing groups
2. Enters New Jersey – The emerging MSO reported that it’s acquiring CraftedPlants NJ to enhance its leverage to the attractive New Jersey market
3. Added Human Capital – Following the closing of the financing and the completion of any regulatory requirements, Josh Rosen (Managing Partner of Bengal Capital and past CEO of 4Front) will join the company’s board of directors

A Coast-to-Coast US Growth Story

We are bullish on the update and consider New Jersey to be an attractive long-term opportunity for the business. Last year, the state started to allow for the sale of recreational cannabis and the majority of New Jersey municipalities opted out of allowing recreational cannabis businesses within their borders. Body and Mind should benefit from the growth of the burgeoning industry and underserved retail.

Through CraftedPlants, the company has acquired an entity that leases a New Jersey retail location with local cannabis-use approval. Currently, the company is working on attaining final state licensure in New Jersey and we expect Body and Mind’s experience to help accelerate the process.

Body and Mind has active retail operations in Ohio, Arkansas, Michigan and California. The MSO also has pending retail operations in Illinois and New Jersey, and craft cultivation and/or processing operations in Nevada, Ohio, and Arkansas.

When we analyze the multi-faceted US cannabis operator, we are impressed with the lean operations and growth potential associated with its successful retail cannabis store launches in Illinois and New Jersey. Recreational cannabis is legal in both of these markets and we believe these states are underserved with retail locations. We expect the new states to play an important role in the growth of the business.

Last week, Body and Mind reported first quarter earnings and generated $7.8 million of revenue. Over the next year, we expect the company to record strong revenue results from markets like Ohio and Arkansas. Although we are excited about these states, Illinois could prove to be the biggest catalyst for Body and Mind.

The management team has a proven track record of executing on low-cost expansions into new markets. We are bullish on the Illinois market for many reasons. According to Illinois’ Department of Financial and Professional Regulations (IDFPR), the state reported more than $1.5 billion of recreational cannabis sales. This amount is approx. $180 million higher than what was reported by the IDFPR in 2021 and we are favorable on the growth of the market.

Trading at a Discount When Compared to its Peer

With leverage to recreational cannabis markets including California, Illinois, New Jersey and Nevada, we believe Body and Mind is positioned to record better-than-expected growth in 2023 and beyond. On top of these markets, the company is also capitalizing on Arkansas and Ohio which are attractive medical cannabis markets.

We believe the leverage to Illinois and New Jersey is underappreciated by the market and are of the opinion that not much value has been associated with these opportunities for the business. By owning high-profile cannabis assets, we consider Body and Mind to be a company that has significant potential catalysts for growth.

With a market capitalization that is less than C$10 million, we believe there is considerable upside to current levels and want our readers to keep an eye on Body and Mind. To learn more about this undervalued US MSO, please send an email to suppport@technical420.com.

Company Relationship Disclosure

T420 is responsible for the T420 opinions provided in this disclosure except all sources or information provided by other parties were not verified or authenticated and T420 does not undertake to confirm or substantiate or be responsible for such information provided by other parties.

Any Content posted regarding a Profiled Issuer is not a solicitation or recommendation to buy, sell or hold securities. We cannot and do not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. All information should be independently verified. We are not responsible for errors or omissions in our publications, and any opinions expressed are subject to change, without notice. We do not, nor are we under any obligation to undertake due diligence or investigation or authenticate and verify whatsoever regarding Profiled Issuers or any Content posted in relation thereto and we do not receive any verification from the Profiled Issuer regarding the Content we disseminate. Similarly, while we endeavor to facilitate the provision of quality information, we are not responsible for any loss or damages caused or alleged to have been caused by its use nor verify or authenticate or update such information.

Pursuant to an agreement between StoneBridge Partners LLC and Body and Mind Inc. we have been hired for a period of 360 days beginning September 15, 2021 and ending September 15, 2023 to publicly disseminate information about (BAMM) including on the Website and other media including Facebook and Twitter. We are being paid $1,000 per month (BAMM) and were paid “ZERO” shares common shares. We hold “ZERO” shares common shares. We will not sell or purchase shares during the Term. We reserve the right to buy or sell shares after the Term in accordance with State and Federal securities laws. See “Disclosures” below which is to be read in conjunction with this release.

This article contains forward-looking statements within the meaning of applicable securities laws. All statements that are not historical facts, including without limitation, statements regarding future estimates, plans, programs, forecasts, projections, objectives, assumptions, expectations or beliefs regarding future performance are “forward-looking statements”. Forward-looking statements can be identified by the use of words such as “expects”, “does not expect”, “is expected”, “believes”, “intends”, “anticipates”, “does not anticipate”, “believes” or variations of these words, expressions or statements, that certain actions, events or results “may”, “could”, “would”, “might” or “will be” taken, will occur or will be realized. Such forward-looking statements involve risks, uncertainties and other known and unknown factors that could cause actual results, events or developments to differ materially from the results, events or developments expected and expressed or implied in such forward-looking statements. These risks and uncertainties include, but are not limited to, dependence on obtaining and maintaining regulatory approvals, including the acquisition and renewal of federal, provincial, state, municipal, local or other licenses, and any inability to obtain all necessary government authorizations, licenses and permits to operate and expand the Company’s facilities; regulatory or policy changes such as changes in applicable laws and regulations, including federal, state and provincial legalization, due to fluctuations in public opinion, industry perception of integrative mental health, including the use of psychedelic-assisted therapy, delays or inefficiencies or any other reason; any other factor or development likely to hamper the growth of the market; the Company’s limited operating and profitability track record; dependence on management; the Company’s need for additional financing and the effects of financial market conditions and other factors on the availability of capital; competition, including that of more established and better funded competitors; the impact of the Russia-Ukraine conflict on the global economy; the continued impact of the COVID-19 pandemic; and the need to build and maintain alliances and partnerships, including with research and development companies, customers and suppliers. These factors should be carefully considered, and readers are cautioned not to place undue reliance on forward-looking statements. Despite the Company’s efforts to identify the main risk factors that could cause actual measures, events or results to differ materially from those described in forward-looking statements, other risk factors may cause measures, events or developments to materially differ from those anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in forward-looking statements. The Company does not undertake to revise forward-looking statements, even if new information becomes available as a result of future events, new facts or any other reason, except as required by applicable laws

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Michael Berger is Managing Partner of StoneBridge Partners, LLC and Founder of Technical420.com. Prior to entering the cannabis industry, Michael was an Equity Research Analyst at Raymond James Financial covering the Energy Sector. Michael has been featured in publications such as The Street, Bloomberg, US Money News, and hosts various cannabis events across North America.

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