Medicine Man Technologies Q3 Sales $5.34M, Up From $4.67M YoY

Medicine Man Technologies, Inc. (OTCQX:MDCL) ("Medicine Man Technologies" or the "Company") today announced the financial results for its third quarter of 2019. During the quarter

Benzinga · 11/11/2019 12:18

Medicine Man Technologies, Inc. (OTCQX:MDCL) ("Medicine Man Technologies" or the "Company") today announced the financial results for its third quarter of 2019.

Medicine Man Technologies Inc. Logo (PRNewsfoto/Medicine Man Technologies Inc.)

During the quarter ended September 30, 2019, total revenue was $5,338,868, an increase of approximately 14% compared to revenues of $4,672,519 in the quarter ended September 30, 2018. Strong product sales and litigation revenue in the most recent quarter offset a one-time licensing sale in the same quarter of 2018.

The Company reported cost of goods and services totaling $2,786,244 during the three months ended September 30, 2019. This compares to $459,280 during the same period in 2018. This increase was due primarily to increased costs related to the sale of products.

Operating expenses during the three months ended September 30, 2019 were $3,478,232 as compared to $1,842,954 for the same period prior year. The increase was primarily attributable to non-cash, stock-based compensation and costs associated with activities related to building an infrastructure to ensure a seamless integration of our numerous pending acquisitions and to help build the proper platform for sustainable growth.

The Company reported net loss in the three months ending September 30, 2019 of $1,827,978, equivalent to ($0.05) per share, as compared to a net income of $4,950,601, or $0.18 per share, for the three months ending September 30, 2018.

The Company's cash balance at September 30, 2019 was $15,204,587 as compared to $529,674 at September 30, 2018. The increased cash position was due primarily to the equity investment by strategic partner Dye Capital & Company.

"The third quarter of 2019 was a transformational one for the Company," said Mr. Andy Williams, Co-Founder and Chief Executive Officer of Medicine Man Technologies. "We reported seven additional proposed acquisitions, bringing our total to 12 pending acquisitions, we filled a key leadership role within the Company, and saw positive initiatives in the industry both locally and federally, which strengthened our industry leading position. In looking at our operations related to the consulting services and our products, the continued positive trends we see in the third quarter are encouraging, as both grew at double digit percentage growth rates."

"Beyond our financial performance, I also wanted to take a moment to address the vaping crisis that is now being discussed at the national level," said Mr. Williams. "Recently, U.S. health officials singled out vitamin E acetate as a likely culprit causing lung injuries related to vaping. While we believe that this additive in vaping products is more commonly found in the illicit market, MedPharm Holdings, one of our pending acquisitions, never used this additive in its products and advocated for its ban at the state level almost two months ago. Medicine Man Technologies again calls for intense focus by health officials on chemical additives added to vape liquids that can be unsafe. We have always put the health and safety of cannabis consumers first and have always used a science-based, public health approach in our product development. MedPharm reiterates its formal policy prohibiting the use of any potentially harmful chemical additives in its vape concentrates, including vitamin E acetate. Additionally, Medicine Man Technologies calls for Colorado regulators to again be cannabis pioneers for the nation by specifically banning the use of propylene glycol (PG), vegetable glycerin (VG), and medium chain triglycerides (MCT) in all vape concentrates in the legal market. We must put the health of cannabis consumers at the forefront and take steps to truly protect them."

"To close out, I want to reiterate that our strategy is to become one of the largest vertically integrated cannabis operators in North America by delivering the best products through leading cultivation, manufacturing, and extraction methods," said Mr. Williams. "Accomplishing this takes time, effort, quality people, and proper planning, so some expenses were incurred in the third quarter to help establish the longer-term necessary infrastructure to achieve this goal. We look forward to the quarters ahead and will remain focused on closing on all 12 of our pending acquisitions."