In its most recent earnings statement, the company reported $20.7 million in revenue for the second quarter of 2019, a 30.8% increase from the same period a year previously. Most of the sales of the company’s consumer products were made through its network marketing subsidiary Kannaway.
Kannaway made its initial appearance this year on Direct Selling News’ Global 100 list of the biggest MLMs. Kannaway was listed in a tie for 100th place with a projected $60 million in annual revenue over the previous 12 months. DSN published its most recent list in April.
Like many other companies in the direct selling space, MMI reported high margins on its products, topping 70%. But also like other MLMs, sales and marketing expenses were high too, topping 50%, driven mostly by commissions paid to sales associates.
New manufacturing capacity in Utah
In an earnings call with analysts, MMI also detailed work it has done to secure its supply chain by bringing more manufacturing capability in house.
“We find the strengthened Medical Marijuana Inc.’s vertical integration efforts and ownership of our supply chain, by adding a greater level of processing and refinement at our newly expanded warehouse and manufacturing facilities in Utah. We are investing in engineering and equipment that will allow us to control various sites of production of our products that we could not previously, while enabling us to further innovate our product lines,” said chief operating officer Blake Schroeder. A transcript of the call has been posted on the site seekingalpha.com.
For the full year, the company said revenue will approach $85 million.
CBG development effort
Stuart Titus, CEO of MMI, said the company is sitting pat on CBD. There are many cannabinoids within the plant yet to explore, he said.
“In addition to our decade worth of research and development into the potential wellness benefits of CBD, one of the Medical Marijuana Inc. major investment companies AXIM Biotech has been researching and developing several cannabigerol, CBG products,” he said.
“CBG like CBD is a non-psychoactive cannabinoid. It is basically the stem cell cannabinoid the first cannabinoid that the cannabis plant develops. And certainly there are tremendous potential pharmaceutical allocations that’s an anti-inflammatory, a potential T-cell mediator and potential benefits for digestive disturbances,” Titus added.