Noble initiates on MariMed with ‘buy,’ citing 150% upside

MariMed, a micro-cap producer of cannabis-infused products, is worth 150% more than its current market price, according to broker Noble Capital Markets. MariMed has a strong balance sheet, meaning it has room to grow, Noble explains. Yet investors should keep in mind that the cannabis industry overall faces regulatory uncertainty.

Noble sees the fair value of MariMed at $0.25 per share, 150% higher than the current market price — yesterday, April 3, shares gained more than 6% over the counter to $0.10 apiece. Over the past 12 months, however, the company has lost 62% in market value.

Noble initiated on MariMed with a “buy” recommendation (an “outperform” call). The company's brands hold a strong position in their respective markets, Noble notes. MariMed also has a strong balance sheet and no short-term debt, which gives it capacity for expansion into new products and new markets, Noble adds.

Noble points out the cannabis industry continues to face an imbalance between supply and demand, as well as regulatory uncertainty. It cites estimates that in 2024, the legal cannabis market in the U.S. was worth $32.1 billion, while by 2030, it could grow to $58.0 billion. However, laws vary by state — in some, cannabis is permitted only for medical use; in others, for recreational use too; and in still others, it is completely prohibited, according to the Noble report.

As a result, the illegal market is bigger than the legal one in many states. If cannabis were to be legalized, market growth could exceed even the current projections, Noble concludes.

Founded in 2012, MariMed is a vertically integrated holding: The company grows cannabis, manufactures cannabis-infused products, and sells them both wholesale and retail in six U.S. states. Its products include teas, e-cigarettes, and gummies, which CEO Jon Levine claims are the best-selling edibles in Massachusetts and Maryland.

For full-year 2024, MariMed reported 6% revenue growth to $158.0 million, and a 24% reduction in the net loss to $12.1 million. The company has not yet released its results for the first quarter, for which Noble forecasts  2% top-line growth.

According to Yahoo Finance, MariMed currently has two ratings from Wall Street analysts — both “buys.”