MedMen Archives - Green Market Report

Debra BorchardtJanuary 14, 2022
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Ascend Wellness Holdings, Inc. (CSE: AAWH.U) (OTCQX: AAWH) is ramping up its efforts to get MedMen (OTC: MMNFF) to complete the deal that the two companies had arranged with regards to the New York properties. On Friday, Ascend filed a complaint in the Commercial Division of the Supreme Court of the State of New York in New York County against MedMen NY, Inc. and MM Enterprises USA, LLC in which Ascend is trying to get MedMen to go through with the deal that MedMen is trying to get out of.  In addition, AWH has made an application for a preliminary injunction and temporary restraining order to maintain the status quo between the parties and to prevent any actions by the MedMen parties that would result in additional encumbrances on the equity or assets of MedMen NY, Inc.

The Original Deal

The two companies had agreed in February of 2021 Ascend would invest $73 million in order to receive controlling interest in 86.7% of the company’s New York properties. In addition, Ascend had an option to purchase the remaining amount in the future. MedMen was in pretty bad shape at the end of 2020. The company was heavily in debt and its liabilities exceeded its assets by 50%. MedMen continued to lose money quarter after quarter and its operational costs exceeded 100% of its gross revenues making profitability an unlikely hope rather than a reality. Additionally, MedMen’s revenue was dropping and its losses increased quarter over quarter. MedMen spent much of 2020 attempting to restructure, sell its assets and renegotiate its many obligations. The company was also facing issues with its founders and a lawsuit by the company’s former Chief Financial Officer James Patterson, which MedMen won.

Ascend stepped in and gave MedMen some much-needed cash, including an upfront $4 million cash infusion in December 2020 in connection with the execution of a letter of intent between the parties and a further $4.46 million to cover MedMen’s working capital needs and Utica facility site improvements and expansion during 2021.

NY Approval

The deal though was contingent upon approval by the state of New York. MedMen submitted an application to the New York regulators as of March 11, 2021, for approval of the
sale of MedMen NY to Ascend. That application recited that MedMen needed an immediate cash infusion from Ascend to continue its operations. The process hit a snag when halfway through 2021, the state transferred oversight of the cannabis program from the Department of Health to the newly created Office of Cannabis Management (OCM). Ascend claims that MedMen did not pursue the state’s approval causing Ascend to step in and push the process along. Finally, the state gave its approval on December 16.

However, the use of the word “conditionally” in the approval caused MedMen to claim that the approval wasn’t final and so they could terminate the deal. According to the complaint, Ascend went back to the OCM and asked for clarification. The OCM stated that its approval was in fact final. Still, MedMen insisted it wasn’t and finally on December 29, the OCM contacted MedMen to say it was indeed final.

The deal stated that MedMen had to close within five days of receiving approval from the state of New York. Still, MedMen insists it didn’t get approval by December 31 even though the emails exist that prove it did. If that wasn’t bad enough, Ascend claims that  MedMen NY paid an improper $500,000 dividend to its parent company, likely financed by advance dollars paid to MedMen by Ascend.

Looming Debt

Ascend also stated in its complaint that MedMen NY has approximately $100 million dollars of loans for which MedMen NY capital stock has been pledged as collateral in the event of default. “These loans were made to the MM Enterprises’ subsidiary, MM Can USA, Inc. by Hankey Capital, LLC. Once the original deal closed, Ascend would issue to MedMen NY  a promissory note in the amount of $28 million and that MedMen NY would subsequently assign the Closing Note to Hankey. Hankey would then release MedMen NY from any liability with the loan.  The loans from Hankey are scheduled to come due on January 31, 2022, and February 1, 2022. “In the event of default on the MM Can loan agreements, Hankey is permitted
to foreclose on the pledged MedMen NY ownership interest and can sell the foreclosed upon interest at a public or private sale or retain the interest for its own account. In such event, an
order specifically enforcing MedMen NY’s obligation to close the Transaction will be meaningless.” MedMen agreed to the Hankey loan in 2018.

In other words, if MedMen defaults, then Hankey gets the stock and Ascend is left empty-handed.

New MedMen

In November, Michael Serruya was named Chairman and Interim CEO, effective immediately. Serruya succeeded outgoing Chairman and CEO Tom Lynch, who held the position since 2020 and oversaw the company’s operational turnaround. Serruya joined MedMen’s board in August 2021 as part of a $100 million investment in the company by Serruya Private Equity to expand its operations in key markets and identify and accelerate further growth opportunities across the United States. Some sources have speculated that Serruya believes the company sold the MedMen NY properties at a discount and that is the reason they want to terminate the deal. Essentially, the new management believes it could get more money for MedMen NY.

 

 

 


Debra BorchardtJanuary 6, 2022
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MedMen (OTCQX: MMNFF) is still refusing to close its agreed-upon deal with Ascend Wellness Holdings, Inc. (CSE: AAWH.U) (OTCQX: AAWH) for the properties in New York. The investment, which was agreed upon in March 2021, saw MedMen signing an agreement with Ascend Wellness Holdings, where Ascend would make an investment of approximately $73 million in MedMen NY Inc. or MMNY. Following the investment, Ascend would hold a controlling interest in MMNY of approximately 86.7% and will have an option to buy MedMen’s remaining interest in MMNY in the future. The deal was dependent upon New York State’s approval, which the Office of Cannabis Management of the Cannabis Control Board of the State of New York gave on December 16, 2021.

On January 2, 2022, Ascend said that MedMen attempted to terminate the Investment Agreement saying they hadn’t received approval from the applicable state regulators to satisfy the closing conditions. On January 3, 2022, AWH told MedMen that its termination attempt was invalid.  On January 6, AWH reiterated this in their notice to MedMen regarding regulatory compliance.

Ascend also accused MedMen Enterprises, Inc., the parent company of MedMen of failing “to maintain compliance with their regulatory obligations under applicable laws and regulations of the State of New York as they are required to under New York law and under the provisions of the Investment Agreement, including Section 5.01(a)(i). For example, it appears as though neither the Company Parties nor MedMen obtained approval from the relevant authorities for at least one, and possibly more, changes of control of the Company. In addition, it does not appear as though MedMen or the Company delivered the required notices to the regulatory authorities for changes in the Company’s corporate officers. Our concern about potential major compliance violations, in violation of New York law and in breach of the terms of the Investment Agreement, appears to be shared by the OCM, as such potential violations were identified by the OCM in its correspondence attached hereto as Exhibit A.”

MedMen’s only response so far has been to issue a press release saying it had terminated the deal. MedMen’s stock initially jumped on the news, but like other cannabis stocks has seen it share price erode during 2021. In November, MedMen appointed Michael Serruya as Chairman and Interim CEO. Serruya succeeded outgoing Chairman and CEO Tom Lynch, who held the position since 2020 and oversaw its operational turnaround. Serruya joined MedMen’s board in August 2021 as part of a $100 million investment in the company by Serruya Private Equity.


Debra BorchardtJanuary 3, 2022
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Ascend Wellness Holdings, Inc. (CSE: AAWH.U) (OTCQX: AAWH) has reported that MedMen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF) is trying to back out of the deal between the two companies. Ascend said that MedMen is challenging and disregarding the determination of the Office of Cannabis Management and the Cannabis Control Board of the State of New York which approved the transaction. MedMen had initially requested the New York State regulators approve the transaction in March 2021. Ascend said last week that New York had given its approval and that the company intended to close the transaction soon after.  Now MedMen is disputing the NY Office of Cannabis Management regulatory approval, is refusing to close and is attempting to terminate the transaction.

Ascend said in a statement, “As New York and other states adopt adult use of cannabis, MedMen’s actions send the worst message – namely, that certain cannabis companies cannot be trusted to keep their word. AWH calls on MedMen to honor the commitment it made to New York, to its own investors and to AWH and promptly close the transaction. AWH will continue to pursue all measures to encourage MedMen to honor the Investment Agreement and close the transaction.”

Ascend accused Medmen of materially breaching the previously announced definitive investment agreement among AWH, MedMen NY, Inc., MM Enterprises USA, LLC, and AWH New York, LLC. The AWH Parties previously waived all closing conditions in favor of the AWH Parties, following the receipt of the required regulatory approvals, and requested to close the transactions contemplated by the Investment Agreement within the five business day period required under the Investment Agreement. AWH has made repeated attempts to close the transaction.

Original Acquisition Plan

MedMen so far hasn’t responded to the accusations that Ascend Wellness has leveled at the company. The two companies had agreed back in March for Ascend to make an investment of approximately $73 million in MedMen NY Inc. or MMNY. Following the investment, Ascend will hold a controlling interest in MMNY of approximately 86.7% and will have an option to buy MedMen’s remaining interest in MMNY in the future. Also in the agreement, Ascend must also make an additional investment of $10 million in exchange for additional equity in MMNY. This investment will also be used to repay MMNY’s senior secured lender if adult-use cannabis sales commence in MMNY’s dispensaries.


Debra BorchardtNovember 23, 2021
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MedMen Enterprises Inc.  (CSE: MMEN) (OTCQX: MMNFF) has won its case that was brought by former CFO James Parker. In 2019, Parker filed a lawsuit against MedMen, alleging wrongful termination, breach of contract, and retaliation, seeking in excess of $20 million in damages. The case was notable for its scandalous accusations including the creation of a toxic workplace and suggestions that the company paid a third party to buy the stock and push up share prices.

“We are thrilled that the jury concluded that James Parker is not the victim here, but the perpetrator, and that MedMen owes no damages,” said Michael Serruya, MedMen Chairman and Interim CEO. “The false allegations brought by Mr. Parker have grossly misrepresented the environment at MedMen in 2018, and certainly bear no resemblance to the MedMen before us today. We are pleased to put this chapter to rest and focus wholly on taking this company to the next level—leveraging the strength of the MedMen brand and consumer experience to expand across the United States, Canada and internationally.”

MedMen said it has always maintained that the lawsuit and claims were baseless and without merit. The jury agreed, ruling in favor of MedMen on all claims and determining MedMen does not owe Parker any damages. MedMen also asserted affirmative claims against Parker. The jury found that Parker breached his contract, his fiduciary duty, his duty of loyalty, misappropriated trade secrets, and committed conversion, but that there was no harm/damage resulting from his misconduct.

According to Law360, Natalie Lowis, the jury’s foreperson, told Law360 after the trial that the jurors quickly dismissed Parker’s claims that the allegedly toxic environment had anything to do with his quitting. The article also reported that she said they also dismissed his testimony that he felt no choice but to quit because he feared civil or criminal liability due to potentially illegal activity by the company.

“Ultimately, we just kind of felt that there was no harm all around,” she said

She added, “I just didn’t really find it very credible or that [Parker] suffered anything. It seemed, when you tipped the scales, I just believed the company more than him.”

“Now with the record about [Parker’s] lies cemented by this verdict, I think the real story about MedMen and the birth of this industry can come out from behind the last three years of this guy’s baseless lawsuit,” Bierman told Law360.

He added: “[Parker] clearly threw anything he could fabricate up against the wall to see if it would stick. I think the problem is that the jury found that none of it was true.”

 


Debra BorchardtNovember 22, 2021
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MedMen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF) has appointed Michael Serruya as Chairman and Interim CEO, effective immediately. Serruya succeeds outgoing Chairman and CEO Tom Lynch, who held the position since 2020 and oversaw the company’s operational turnaround. Lynch was only just recently named as a permanent CEO in July.

Lynch joined MedMen as interim CEO and chief restructuring officer in March 2020, a few months after Adam Bierman stepped down as chief executive at the company he launched a decade earlier. Before Lynch came in, MedMen’s Chief Operating Officer & Chief Technology Officer, Ryan Lissack was named Interim CEO in January of 2020.

“We want to thank Tom for his leadership over the past 20 months as he’s led a successful and disciplined turnaround plan, which has left us well-positioned for accelerated growth as MedMen 2.0,” said Serruya. “Our focus now is taking this Company to the next level as we seek to leverage the strength of the MedMen brand and consumer experience in order to expand it across the United States, Canada and internationally.”

Lynch said, “It has been an honor to lead MedMen through its transformation into MedMen 2.0, which is now in growth mode. I am confident Michael and the Board will identify the right CEO to execute against our aggressive growth plans and achieve company-wide profitability in 2022.”

Lynch will continue to serve as the Manager of MedMen Boston LLC and MME Newton Retail LLC, and for the immediate future will continue to participate in the direction and control of those businesses.

Serruya joined MedMen’s board in August 2021 as part of a $100 million investment in the company by Serruya Private Equity to expand its operations in key markets and identify and accelerate further growth opportunities across the United States. This, together with Tilray, Inc.’s acquisition of the majority of the outstanding senior secured convertible notes of MedMen that were originally held by certain funds affiliated with Gotham Green Partners, LLC, provides MedMen with the flexibility to execute on its growth priorities and explore additional strategic opportunities.

Serruya is a seasoned cannabis investor with extensive retail expertise, having previously served as CEO of Coolbrands (then home to CPG brands including Weight Watchers, Eskimo Pie, Tropicana and Godiva Ice Cream) and Kahala Brands (home to global QSR brands including Cold Stone Creamery, Taco Time and Blimpie Subs).


Debra BorchardtNovember 18, 2021
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It looks as if the MedMen Enterprises Inc. (OTC: MMNFF)  trial is coming to a close. According to Law360, the lawyers for the company’s former Chief Financial Officer James Parker attorney gave his closing arguments on Tuesday. Parker claims he is owed up to $24.89 million due to his employment contract, while MedMen believes the contract isn’t enforceable because Parker negotiated it himself.

Law360 reported that Michael J. Kump of Kinsella Weitzman Iser Kump Holley LLP, who represents Parker suggested the amount could be even higher if the jury decides to award him damages for emotional distress, damage to reputation, and punitive damages on claims that include promissory fraud, retaliation and wrongful discharge in violation of public policy. However, it was noted that the amount could fall down to $16.4 million if the jury chooses a blended average of the stock price in May and June 2018.

The report said that Kump reiterated the issues that brought the case to court to the jurors. This included the toxic workplace environment due to the co-founder Adam Bierman’s language and Parker’s concern that he could face criminal liability for the founder’s actions. In particular, Parker’s allegations that he discovered the company was illegally inflating its stock price by paying a consulting company to buy MedMen’s stock on the Canadian Securities Exchange. “That was a criminal act that he could be potentially liable for,” Kump said.

Also at issue in the trial were the MedMen shares and when Parker could sell them. Law360 said that at trial, jurors were presented with “different scenarios on when Parker could have feasibly sold the shares allegedly owed him because they were not common stock shares, but long-term incentive plan shares, which cannot be sold as quickly.”

The company has fought the allegations and filed counterclaims against Parker for breach of contract, breach of fiduciary duty, breach of duty of loyalty, misappropriation of trade secrets, and conversion. MedMen co-founder Andrew Modlin took the stand and claimed Parker wasn’t equipped for the job and denied the company was planning to fire him, instead he insisted it was going to work with him on improving his job performance.

Parker actually resigned but says he felt he had no other option due to his liability fears. It looks as if MedMen’s attorneys have finished their closing arguments and the case could be going to the jurors as early as this week.

 

 

 


Debra BorchardtNovember 17, 2021
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The ongoing trial of MedMen (OTC: MMNFF) and its ex-CFO James Parker, court watchers are beginning to hear the other side of the story. So far the trial has delivered Parker’s version of events. He claims that the founders were spending corporate money as if it was their own and creating a toxic work environment. He also alleges that MedMen paid outsiders to buy the company’s stock in an effort to move the share prices higher. He also claims he was improperly terminated, even though he acknowledges resigning.

This week former president and co-founder Andrew Modlin took the stand. MedMen’s position has always been that Parker breached his employment contract, not that he had been unfairly terminated. According to Law360, Modlin testified that although he was increasingly concerned about the performance of then-CFO James Parker in the months after the company debuted on the Canadian Securities Exchange in 2018, he neither fired nor demoted him. Parker claims that the MedMen executives were preparing to fire him because he believed an executive search firm had been hired behind his back.

Modlin suggests that Parker was not performing his job very well. He is reported to have said that cash flow projections had shrunk rapidly while Parker reconfigured how he organized the company’s finances. “Now we’re a month later after the first time hearing [the projection] is going to be redesigned, and now it’s going to be redesigned again, and clearly he didn’t have any experience doing this,” he said. Law360 also said that Modlin testified that Parker projected in June 2018 the company would reach a negative cash flow by February 2019, but then a month later predicted it would be by December 2018, and then in August said cash would run negative by September 2018.

“It was August, so now we have very little time to raise more money,” Modlin testified. “In addition, seeing that this was so volatile going from February two months prior, there was barely any grip from the finance department as to what was being spent at the company.” Modlin also disputes Parker’s claim that it was his idea to list on the Canadian stock exchange and said it was the other co-founder Adam Bierman who came up with the plan. Modlin also stated that he had planned on working to improve Parker’s performance, but that he quit before that happened.

On Tuesday, MedMen brought on a transactional lawyer and adjunct UCLA professor named Neil Wertlieb to support their claim that since Parker negotiated his own employment contract he violated his own fiduciary responsibilities. MedMen believes that the employment contract isn’t enforceable since Parker didn’t have the document handled by a third party. Wertlieb said that Parker had a conflict of interest by personally negotiating a contract that would benefit himself versus the company.

Wertlieb is expected to be the last witness in the trial and while he began testifying on Tuesday, he was not able to finish and is expected back on Wednesday.

Background

Readers may not recall that MedMen went public in 2018 and described itself as the first cannabis unicorn, meaning it would have a billion dollar valuation despite revenues being much much lower. The hyped-up company immediately faced market wrath and received a large amount of negative news that the key executives retained the majority of voting shares, while new investors would have little to no voice. In November 2018, MedMen raised C$86 million with the help of Canaccord Genuity, but the stock was halted in trading as the company had to amend the terms and announce that Parker had resigned. Parker filed his case in 2019.

In November 2019, a group of shareholders filed a lawsuit against MedMen. That case has been settled. The lawsuit claimed, “The MedMen veneer is a complex web of interconnected subsidiary entities, virtually all of which are directly managed, directed, controlled, and owned by BIERMAN and MODLIN, and all of which always pursue the best interests of BIERMAN and MODLIN, rather than the best interests of any stakeholder or entity. It is that perverse interconnectedness and rampant, brazen self -dealing that renders the actions of BIERMAN and MODLIN, and of the Entity Defendants, unlawful.”

CFO’s Keep Leaving

MedMen then began to experience massive departures from its executive suite. Even as MedMen was talking negatively about Parker, it was unable to keep a CFO on board. In October of 2019, MedMen announce that Zeeshan Hyder had been appointed CFO. Hyder followed Michael Kramer, who apparently was terminated as of October 7, 2019. Kramer was only just hired in December of 2018 and he followed the previous CFO Parker who only lasted a year and half.
In December 2020, Reece Fulgham was named interim CFO and remains in that role today.

 

 

 

 


Debra BorchardtNovember 3, 2021
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Damning testimony continues in the MedMen (OTC: MMNFF) trial with former Chief Financial Officer James Parker. Law360 reported that additional MedMen former employees seemed to support the allegations made by Parker with regards to illegally moving cannabis across state lines and using toxic language. Parker claims he resigned over fears of committing illegal acts and the hostile work environment. MedMen argues that Parker left on his own and broke his employment contract. Parker is asking for millions in pay and stock that he feels is owed to him.

Crossing The Line

The most serious charges revolve around the accusations that MedMen moved cannabis from California to a cultivation facility in Nevada. Crossing state lines is illegal even if a state has legalized cannabis. According to Law360, Barry Fischetto, the company’s former chief operating officer said that he told Andrew Modlin, MedMen’s co-founder, and former president, that he “wasn’t going to jail for him” when asked about potentially moving cannabis plants to Nevada, and that Modlin was not happy about his answer.

Toxic Language

The report also stated that Fischetto “told the jury he was certain MenMen’s co-founder and former CEO Adam Bierman called Parker a “pussy” when Parker raised concerns about the company potentially breaking the law by accepting credit card payments at its cannabis dispensaries.”

“I was standing right next to him,” Fischetto said. He also said he heard Modlin use the word “retard” at least “a thousand times.”

Scott Lloyd, a former recruiting director also supported Parker’s claim of offensive language by the MedMen leaders. The report read, “Lloyd told the jury about an incident he said occurred in the lobby of a San Diego hotel during an executive retreat, which was similar to Parker’s testimony. According to Lloyd, Bierman yelled in the lobby for someone to tell a gay employee to stop “fisting” his boyfriend and get down to the lobby.”

Replacement Fears

One of the reasons why Parker began to believe he was going to be fired by MedMen was that he found a $50,000 invoice for an executive search firm called Leadership Capital Partners. Parker had testified already that the invoice was purposely mislabeled so that he wouldn’t notice it. Law36 reported that on Tuesday, William Tsai of Leadership Capital Partners testified “that he was hired by MedMen in September 2018 to find a new CEO and to creatively label his invoice to hide its true nature. Under cross-examination, he said that during an interview Bierman told a recruit the job’s title was “fungible” and might not be for the CFO.”

There was also a discussion regarding the valuation of the shares that Parker is claiming to be owed. Parker thinks he should receive $7.39 million in severance pay and $17.5 million in stock.

MedMen will release its financial results for the first quarter fiscal 2022 ended September 25, 2021, after market close on Tuesday, November 9, 2021.

 

 

 

 


Debra BorchardtOctober 28, 2021
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The MedMen trial continues this week as the company pushes back against former CFO James Parker. According to reporting by Law360, MedMen’s attorney William F. Dugan of Baker McKenzie has tried to argue that because Parker negotiated his employment contract essentially on his own, the terms aren’t enforceable.

Law360 reported that most of Dugan’s questions during the third day of the trial reviewed the process and manner that Parker pursued while negotiating his employment contract with MedMen. Despite having a personal attorney hired to review the contract, Parker apparently took the lead. He also testified that even though there was a compensation consultant, he signed the contract without waiting for a report from the consultant. The testimony suggested that the contract contained some language that the consultant didn’t favor. Parker is claiming to be owed $24 million under the terms of the contract.

MedMen though says that Parker violated his contract by leaving the company and his job without giving the required 90-day notice. The company has insisted that Parker was a poor CFO who was unable to perform the duties required of the role. They say he quit when he was told that his performance was under review. MedMen has also filed its own lawsuit against Parker for breach of contract, breach of fiduciary duty, breach of duty of loyalty, misappropriation of trade secrets, and conversion.

Case Settled In 2020

While this case has gone to court, MedMen actually settled one case last year from investor Brent Cox, a company known as MMMG-MC Inc., and derivatively on behalf of MMMG LLC. Cox was a former board member of MedMen, serving in that role from March 2016 to March 2018, and Founder of The Inception Companies. The general gist of the lawsuit was that Cox and Omar Mangalji (another founder of The Inception Companies) received shares that were not able to be traded until the lockup period ended on November 29, 2018. The lawsuit claimed, ” On November 21, 2018, BIERMAN announced that limited partners in Fund I and Fund II would have 100% of their shares issued to them in “mid-January” 2019, with the share totals awarded to them calculated at the then-current market value. At that time, a portion of their MEDMEN CORP. shares would be free trading, while the remainder of their shares would remain locked up until the thirteenth month thereafter, after which once per month on a twelve-month basis their “remaining shares become free-trading based on a monthly drip,” in equal installments.”

At the time Cox stated, “We have a long history with MedMen – as one of the largest and original shareholders of the company. Sadly, we are backed into a corner here and compelled to take action on behalf of all stakeholders of the company.”
That case was settled when MedMen issued 1.5 million Class B Subordinate Voting Shares to MMMG-MC as a part of the overall 24 million share settlement with the claimants, which included contributions from other parties and allowed the issuance of shares to all MMMG shareholders. “Although MedMen denies any wrongdoing, the Company believes its contribution to the settlement is in the best interest of its shareholders.”
MedMen still faces employee lawsuits.

 


Debra BorchardtOctober 26, 2021
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MedMen Enterprises Inc.  (CSE: MMEN) (OTCQX: MMNFF) announced the appointment of Roz Lipsey to the role of Chief Operating Officer. She succeeds Tim Bossidy, who has served as interim Chief Operating Officer since 2020. Ms. Lipsey has served on MedMen’s executive management team since 2020 in the role of Senior Vice President, Business Operations, and brings more than 25 years of operational experience, focusing on business start-up, scaling, and strategy.

The appointment comes during the midst of the company’s saucy trial with former CFO James Parker. The trial began last week and testimony from Parker continued on Monday. According to Law360, Parker expanded upon his first day of testimony regarding moving cannabis across state lines. The report stated that Parker was sure that MedMen had stocked a Nevada grow house with cannabis plants that were grown in California. Interstate transportation of cannabis is illegal even if cannabis is legal within the state. In 2018, MedMen opened a 45,000-square-foot facility near Reno. The facility recently announced that it was going to be grown under a new company called LitHouse.  LitHouse will expand its current California production, enter the Nevada market for the first time and produce flower for MedMen’s private label line MedMen Red. MedMen also has three dispensaries in Las Vegas.

Another issue that Parker testified about was stock price manipulation. In previous court filings, Parker has said he learned MedMen was sending large amounts of money to a consulting company and was told by Bierman the money was being used to buy company stock, which would keep the price of the stock from falling. Law360 reported that Parker said on the stand, “I told him it was outright securities fraud and that it needed to stop.” Parker stated that he resigned soon after the discovery and reached out for legal advice.

Law360 reported that Parker told the jury about why he was concerned about the spending habits of Modlin and Bierman, “We’ve gone public, we have investors. It’s not their company. It’s not their money. You look at this, it starts to look like you’re enriching yourself. It exposes us, especially in situations where we’re running out of money and a number of times constantly looking at a drop-dead point of having no capital. It opens us up to a tremendous amount of liability.”

Toxic Culture

Parker has also stated in his original court filing that former CEO and Co-founder Adam Bierman created a toxic culture with his descriptions of various people. MedMen for its part has fired back saying Parker is just as guilty of these comments. It seemed according to the Law360 reporting that Parker is trying to get ahead of those accusations as the jury was shown a clip from the 2016 film “Popstar: Never Stop Never Stopping.” Law360 wrote, “The film is about a clueless pop star, and the clip in question showed the star of the film, Andy Samberg, singing about his support of gay rights but going out of the way to make sure the audience knows he is straight. Parker said he was asked about the clip during his deposition, and said he once sent the clip to Bierman because he thought it was funny. He added that he did not think the clip was offensive.”

 


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