MedMen has been making headlines in the cannabis industry since its meteoric rise to success in 2018. With a valuation of $1.6 billion, it was the first “darling” of the cannabis industry in both California and Nationwide.
However, recent news has revealed a stark downfall for MedMen, with its shares now essentially worthless at zero dollars in value. In this article, we will explore MedMen’s journey and how it went from being hailed as the future of legal weed to a cautionary tale of mismanagement and financial troubles.
The Rise of MedMen
MedMen’s success story began with its entry into the legal cannabis market in California. With stylish retail locations and a promise to cash in on the state’s booming weed economy, MedMen quickly became a national player in the industry.
But it wasn’t just their stores that caught people’s attention – MedMen also branded itself as the “Apple Store of Weed,” appealing to consumers with its sleek and modern approach. This unique branding helped MedMen stand out in a crowded market.
In fact, in 2018 we wrote about MedMen “flexing” on the cannabis industry. At the time, on top of 14 stores in Cali, Nevada, and New York, and a deal to open 30 more in Florida, the company announced a record-setting $682,000,000 acquisition of a company called PharmaCann, the largest holder of medical marijuana licenses on the east coast with ten retail stores and three cultivation and production facilities spread across New York, Maryland, Massachusetts, and Illinois.
The company also held licenses for potential expansion into Pennsylvania, Ohio, and Michigan, but that all went to MedMen. With plans to gobble up licenses in Arizona as well, the move projected MedMen Inc. canopy to cover 12 states, with 66 retail outlets and 13 totally legal large-scale grow ops.
Meteoric Downfall
Despite its promising start, MedMen’s downfall began with reports of reckless spending and falling behind on bills. Such as higher ups lavishly spent other people’s money to enrich themselves while firing hundreds of employees, stringing out payments for countless distributors, facing allegations of workplace harassment, and literally making a mockery of regulated cannabis. A large part of Medmen’s success… and ironically their failure… came from co-founders Adam Bierman and Andrew Modlin. While they founded one of the most well-known cannabis brands to date. Thier ego, arrogance and mismanagement are to blame for its downfall.
The last time the company reported quarterly earnings was in May, when it released its third quarter fiscal 2023 results for the three months that ended March 25. At that point, MedMen had a working capital deficit of $383 million and just $7.6 million cash on hand as reported by Green Market Report.
In an attempt to clean up its balance sheet, MedMen made the decision to sell off some of its assets. This included selling its non-core business operations in Arizona and certain assets in Nevada to an affiliate of Mint Cannabis.
At the time, MedMen CEO Ellen Deutsch Harrison expressed optimism regarding the company’s strategic review and restructuring efforts, stating that “MedMen is pleased with the outcome of our strategic review and has made good progress in our restructuring efforts. These transactions will bolster liquidity in the short term, reduce liabilities, and enable the Company to focus on operating efficiencies and executing our long-term asset-light growth strategy in our core markets,” said in a press release.
However, apparently these sales had likely a very limited impact on MedMen’s financial problems.
Despite its efforts to sell off assets and restructure, MedMen’s financial troubles have continued to escalate. In Canada, where the company is publicly traded, per Green Market Report the Yahoo Finance trading activity showed MedMen with a volume of 24,139 shares at the high price of one penny. The last trade of company shares on the Canadian Stock Exchange occurred on January 4, 2024 with a high price of two Canadian cents. Essentially, this means that from a stock price perspective, MedMen is essentially worthless.
Adding to the company’s troubles, Canada’s stock regulator has halted trading of MedMen’s shares due to its failure to file financial reports, according to SFGATE. This news further solidifies the downward spiral that MedMen seems to be caught in.
Despite their once-promising start and efforts to reinvent themselves with new deals and investors, MedMen’s financial troubles continue to plague the company.
MedMen was once seen as a major player in the cannabis industry with plans for expansion and a recognizable brand. However, reports of controversy, reckless spending and financial troubles have led to their downfall.
Despite efforts to restructure and sell off assets, MedMen’s stock is now essentially worthless and trading has been halted due to failure to file financial reports. The company’s future remains uncertain, with many questioning if selling the company may be their next move. Whatever the case, only time will tell how MedMen’s downward spiral will continue to unfold in the ever-evolving cannabis market.
So, can MedMen reinvent itself once again and rise from its ashes as they’ve tried so many times? Or is this truly the end of the road for them? Only time will tell. Whatever the outcome, one thing is for certain, MedMen’s story serves as a cautionary tale of how even with a recognizable name and brand, poor business practices and financial mismanagement can lead to a company’s downfall.
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