Hashish Pioneer MedMen Names Fifth CEO In 3 Years As Firm Teeters On Brink Of Collapse
Topline
Hashish agency MedMen introduced Wednesday its fifth CEO since 2020 with the appointment of Ellen Deutsch, who will probably be tasked with turning across the once-industry-leading firm that now stands on the verge of a monetary collapse fueled by excessive debt.
On this April 20, 2018 file photograph an worker of MedMen walks by way of their new retailer on New York’s … [+]
Key Details
Deutsch’s appointment is efficient instantly, with former CEO and board chairman Michael Serruya saying Deutsch will oversee a restructuring plan that may convey it “into a brand new part of development,” although no particular development methods had been shared within the announcement of her appointment.
In February, a regulatory submitting revealed MedMen—which in 2018 grew to become the primary marijuana firm to attain a $1 billion valuation—had $137.4 million in debt and simply $15.6 million in money remaining readily available.
The submitting additionally confirmed the corporate had already defaulted on a few of its debt.
Interim CEO Edward Report will step down from his place and proceed as a non-executive board member.
Large Quantity
Greater than $1 billion. That was the valuation of MedMen in 2018, when it certified as a “unicorn” firm and was likened to the “Apple retailer of weed.”
Key Background
Deutsch, who most lately served because the COO of hashish firm Stem Holdings, has a big accountability as she turns into MedMen’s fifth full-time CEO in three years. The revolving door on the firm’s chief government place began after its co-founder, Adam Bierman, exited the function in January 2020. Bierman, who based the corporate in 2010, departed after MedMen had burned by way of a big quantity of its money and its inventory dropped almost 90%. Bierman was additionally hit with a lawsuit from one of many firm’s former CFOs in 2019 that alleged MedMen had a hostile work surroundings and that firm funds had been used for extreme private spending. The ex-CFO, James Parker, claimed in his swimsuit that he was retaliated in opposition to for telling “the CEO and president what they had been doing was not allowed and that [MedMen]
was not their private piggy financial institution.” The Los Angeles firm has since shuffled by way of a number of executives and confronted a number of lawsuits.
Tangent
MedMen is one in all a number of hashish retailers that has felt the strain of a number of issues which have impacted the hashish {industry} for a number of years, regardless of widespread legalization efforts making leisure marijuana now authorized in 23 states. For instance, a 2022 evaluation from Inexperienced Market Report discovered that the general debt carried by hashish operators was reportedly greater than $600 million. In California, which legalized the leisure use of hashish in 2016, tight laws and excessive taxes have hindered the profit-making talents of MedMen and different companies prefer it. The unlawful hashish market has additionally proved to be an issue for retailers, sustaining regular flows of enterprise in states like California, New York, Colorado and Michigan—with the previous two states struggling essentially the most from enterprise misplaced to the unregulated hashish market.
Additional Studying
How To Trip A Marijuana Unicorn: An Interview With MedMen Spokesman Daniel Yi (Forbes)
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