MedMen Archives - Green Market Report

Debra BorchardtDebra BorchardtJanuary 23, 2020


Green Market Report’s Editor-in-Chief Debra Borchardt spoke with MedMen CEO Adam Bierman regarding the word from vendors that payments have been delayed. This interview has been edited slightly. 

Editor-in-Chief Debra Borchardt:

We’ve confirmed that the emails posted online from MedMen telling vendors that payments will be late are real. We’ve also confirmed that vendors had said they haven’t been paid.

MedMen CEO Adam Bierman:

Those emails are absolutely, real emails. We’ve never denied those emails. We’ve been very forthright with the public, and with our investment community at large about the fact that at the end of last year we entered into a restructuring in the business, exiting the hyper-growth stage of the business, and getting into sustainability, and with that, there’s a lot of pain. And that pain starts at the employees that were on this mission with us, building this platform with us that we had to part ways with. A lot of them are like family that has been with us for a very long time.

That’s unfortunate. That’s hard. But it was necessary. During that timeframe, we stopped payments to certain vendors as would be commonplace in the restructuring of a retailer. We turned over our accounts payable to a restructuring consulting firm (FTI Consulting) so that we could preserve and allocate the cash as we got through and out the other end of restructuring. These are brands that heavily rely upon MedMen for their business. Especially in California, we understand how important MedMen is to that ecosystem and we understand what happens, and the impact, and the ripple effect it has on these manufacturers. They’re having discussions like that with our teams about structuring payments.

Some of these people are my very good friends that we came up in this business together for the last decade. But I also say that there have been plenty of times where, well, roles have been reversed and we’ve been asked to be partners, long term partners to some of these groups. I think that’s just part of building an industry. There will be times when you’ll be asked to help others out in the industry. And there’ll be times when it’s vice versa.  We are probably 30 days away from being out the other end of this restructuring.

Our cash position is very healthy, our balance sheet is strong. We’ve made a couple of announcements over the last month about bringing in fresh capital by way of selling some equity as well as selling some non-core assets, and the business is well-positioned going forward. So, the unfortunate reality of growth, which we’ve all seen over the last 10 years, is what we were faced with. This is all stages. And so, this was a stage that we went through, but we’ll come out the other end and.

GMR: One of the things that you got out of the PharmaCann break up was the Illinois licenses. Are you planning on holding onto those Illinois licenses or are you thinking that you’ll see if there’s a good price for them?

Bierman:  No, I think at this point in time we’ve sold the non-core assets that we believed could bring in the most near term cash and also include our near to mid-term prospects of profitability. And we’re through that. There are no additional states or assets that we currently plan to sell out. We did sell the cultivation facility, in Illinois from PharmaCann. That was one of the assets that we sold. But as far as the retail stores go, it is a market that we believe to be important to our near and mid-term health. The two stores we have open now are averaging 200 transactions per hour. That’s per store in Illinois.

GMR:             The CFO situation, you guys have been through a lot of turmoil on the CFO side, and of course, that doesn’t look good to the market. Do you feel like you’ve started to get stability in that office in the C suite?

Bierman:                   I’ll start by saying that the Zeeshan Hyder is outstanding and the company is so fortunate to have him in that seat. I guess I would say on a broader basis, we are very aggressive in how we iterate and evolve our business. And you’ve seen it, and I’ve lived it for the last 10 years. And part of that evolution is constantly wanting the best talent with the most amount to contribute to the business and within the context of whatever stage the business is in. As you’re aware, it was only a couple of years ago that people from the traditional industry wouldn’t work in cannabis. I think we were among the first organizations in cannabis to attract talent from mainstream industry. And so, where I think where you mentioned the word turnover, we look at it as an evolution. We are constantly evolving. If we can get better, we get better.

GMR:   Was hiring FTI consultants, was that part of the deal with your investors? Gotham Green? Gotham has extended a lot of credit to you guys and they’ve also kind of stepped in as part of the board, et cetera. Was that part of their idea to bring in FTI to kind of right the ship?

Bierman:                   Yeah, I don’t know where that rumor started cause I try not to pay attention, but there’s never been a point in time where our lenders haven’t quote, “stepped in.” We’ve had a facility as Gotham, we renegotiated that facility in the fall to get the company way more flexibility amidst this backdrop. We have a second lending group that we renegotiated with a few weeks ago that gave us way more flexibility and also pushed that out for a couple of extra years. So our relationship at this point with our lenders is solid.

I think when you talk about our primary investors, our relationship is on solid footing.  Our biggest equity holder, outside equity holder, is Wicklow Capital, who wrote an eight-figure check into our equity round two weeks ago. So, we have a lot of continued support from those groups. Now, I don’t know if we would’ve had that support if we hadn’t taken all the actions we’ve taken to put ourselves in a position to thrive for what’s next. But we’ve done that, and I think, as a result, we continue to have their backing.

So, we brought FTI in to help us through the restructuring when it comes to things like AP. We brought in different resources for very specific purposes. And then some of the work we did ourselves just rather than taking all the commitments off our balance sheet in regards to payroll, extra infrastructure and projects. And then the restructuring of both facilities, plus our accounts payable.

In the fall, I recognized that I probably was six months behind taking actions that, at that point in time, we decided to take. We were down at that point in time as we sit here, middle to the end of January, we’re positioned to thrive. I mean this company has never been healthier.

It’s not just that our lenders have stepped up to support us because of their long term belief in how well we’re positioned and it’s not just that Wicklow stepped up and wrote another eight-figure check because of how well we’re positioned, it’s because how much they believe in the value of the check they just wrote. And how cheap the stock currently is versus where it will be as we execute. But me, Chris, and Andrew wrote checks into the last equity round. So, the last equity round was 60 plus percent, me, Chris, Andrew and Wicklow. And these are the people that understand what’s going on within the business better than anybody in the world. So, again not taking away from the pain and the difficulty and the stress of what that restructuring was, and absolutely having the humility to be able to admit that’s something that should have taken place six months earlier. All that, notwithstanding, and get to a place in January where maybe the people on the inside of this business understand how well positioned and undervalued it is for where it’s headed.

GMR:             Well, the creditors are selfish. They ultimately want to see you succeed because that’s how they’re going to get their money back. I mean, they, it does not behoove them to send you down the drain cause then, they’re going to lose their investment. You know, they, it’s ultimately in their best interests that MedMen succeed so that they get paid back, basically.

Bierman:                   Yes, yes. 100%, which is why some of these rumors are just so silly. But MedMen has $1 billion in license value across all our licenses and MedMen has a market cap right now of $350 million dollars. So, I guess, on one hand, the lenders, if they believe in where we’re at, and they believe in the upside of the business. 100% that leads to the support that we have received from them, but nonetheless, we’re still in a position where if that belief wasn’t there, the net asset value of the business is over three times today what our market cap is. So, I think if that belief wasn’t there, we might’ve seen other actions taken from these lenders. So yes, you’re 100% right. This is the path of least resistance for everybody. I do think that there’s a credibility lift in the fact that they chose this route.

Debra BorchardtDebra BorchardtJanuary 21, 2020


Once touted as the first “unicorn” in cannabis IPO’s, MedMen Holdings Inc. (OTC: MMNFF) is now struggling to pay vendors. In addition to telling vendors, it wouldn’t be able to pay its bills until February or March, the company has been selling assets and also announced it was laying off employees in November. The Twittersphere was active on the subject as Jason Spatafora @WolfofWeedSt lead the charge by posting several exchanges between unidentified vendors and MedMen executives.

“That’s Shitty News”

One unnamed vendor’s email from MedMen’s Senior Director of Strategic partnerships, Ben Shultz read, “Sorry for the delay. We received our payment schedule from our consultant’s FTI and had them signed off by our CFO. I wish I had better news here, but unfortunately, we don’t have payments scheduled for you in the near term. We are working on longer cash term infusions, but it is unlikely that we will be able to pay off these invoices before Feb/March.” He goes on to write, “That’s shitty news and there’s no sugar-coating it, but I have to be the messenger of bad here. If and when we can allocate funds to pay off our AR, we will be in touch.”

One California vendor suggested vendors consult a lawyer or accountant before accepting stock instead of the money owed by MedMen. Also, not identified.

Josh Shlenker, the General Merchandising Manager wrote to another unnamed vendor, “We’ve employed a financial consultant FTI to help us devise a payment plan strategy to clear outstanding balances and get us caught up as expeditiously as possible.”

It goes on to read, “All I can realistically offer are imperfect solutions and I’ve had to have a lot of frustrating and awkward conversations. FTI is supposed to be reaching out early next week with a proposed solution for you.” It continues with, “I am working on creative arrangements with people who wish to remain in the assortment through this period and I am working to offer them more premium shelf space and trying to find fund to allocate weekly to chip away at the outstanding balances, while still planning to continue to place and receive orders on 45-60 day terms.”

Last week, CEO Adam Bierman spoke to Benzinga and acknowledged the layoffs announced in November, but that was the extent of his remarks regarding the 190 employees given the pink slip. Instead, he dwelled on the real estate choices the company was making. Yet, the company has been selling off its real estate assets (to a business that is closely connected to company executives) and then leasing the property back. Such that shareholders are really not benefiting from these assets. There was no discussion of financial difficulties.

Bierman’s point was the locations that MedMen is choosing will result in more sales. His thesis is that locations located near airports draw the tourist crowd. However, choosing a dispensary near the airport in Vegas, versus one on the strip seems like an odd choice for consumers.  (Editors note: GMR visited the Vegas MedMen dispensary during the MJ Biz conference in December and it was largely empty. NuWu ( billed as the world’s largest dispensary) was very busy with customers, as was Planet 13 and Reef Dispensaries had a line that snaked outside the door.)

No, It’s Not Bankrupt

Short-seller added fuel to the fire by blasting a headline that asked, “Did MedMen Just Go Bankrupt?” It hasn’t and the general consensus is that cannabis companies can’t declare bankruptcy. According to the U.S. Courts, “All bankruptcy cases are handled in federal courts under rules outlined in the U.S. Bankruptcy Code.” Since cannabis is still federally illegal, it is suspected that the court would reject such a filing. Granted, many of these cannabis companies have complicated business structures where potential parts of the company that isn’t plant-touching could file to reorganize, but that remains to be seen or tested.

Setting up payment plans doesn’t necessarily mean a company is out of money, but with a retail business, the end of the year is typically when a company is flush with cash from holiday sales. So, not being able to pay bills at a time when there should be extra revenue coming in is cause for concern. Retailers like Wet Seal, The Limited, Eastern Outfitters and BCBG all filed for bankruptcy in February of 2017 after the holiday season. Demonstrating that this isn’t an uncommon time for retailers to call it quits.

Still, there’s the issue of total reported liabilities of $671 million as per the quarter ending in September. The revenue for the quarter was $43.9 million. This is a fairly lopsided situation. The next earnings report is on February 26, 2020.

Challenges In The C-Suite

MedMen has faced a lot of criticism since it has gone public. The company first came under fire when the May 2018 IPO disclosed the generous pay for Bierman and Co-founder Andrew Modlin, who recently purchased an $11 million home in Hollywood, despite the financial struggles of the company. The IPO also gave the founders the majority of the voting shares causing another outcry.

The company’s proposed acquisition of Pharmacann was terminated in October 2019, one bonus though is that MedMen received some Illinois licenses out of the deal. The company also took this moment to announce that Zeeshan Hyder has been appointed Chief Financial Officer at MedMen. Mr. Hyder, had been MedMen’s Chief Corporate Development Officer. Hyder succeeded 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 James Parker who only lasted a year and a half. CFO James Parker resigned in 2019 and then followed with a scathing lawsuit that laid bare a great deal of dirty laundry.

More Ugly Rumors

If the vendor payment issues weren’t enough to scare investors, others on the Spatafora twitter feed suggested that the company had sold pesticide tainted cannabis and another said that MedMen was experiencing harvesting issues and was only selling other company’s products. None of this has been substantiated and could be sour grapes from ex-employees, however, if it is true it is troubling.

The stock was lately trading at 57 cents, down from its 52-week high of $3.84. Yahoo Finance lists the company’s market cap at $120 million. The founders have agreed to salary cuts and have relinquished a large portion of their voting rights in an effort to appease its creditors.

MedMen has not responded to a request for comment.



Debra BorchardtDebra BorchardtDecember 27, 2019


MedMen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF) announced the execution of term sheets for non-core asset sales and the company also said that it executed the definitive subscription agreements for its previously-announced equity placement. Altogether, MedMen said it expects to generate gross cash proceeds of approximately $74 million.

MedMen took steps last month to cut costs which included laying off of 190 employees or 20% of its workforce and cutting back on store openings. In addition to those moves, the company also said it was going to sell assets.

Selling Licenses

This update on that announcement noted that the company has executed a non-binding term sheet for the sale of its Arizona licenses, which include three vertically-integrated licenses, and a binding term sheet for the sale of a cultivation and manufacturing license in Illinois.

MedMen said it expects to get roughly $54 million in cash proceeds through the divestiture of the non-core licenses. The completion of the sale of Arizona licenses is subject to due diligence, the execution of definitive documentation and customary regulatory approvals. The completion of the sale of the Illinois license is subject to the execution of definitive documentation and customary regulatory approvals.

The company said it will continue to explore the sale of other non-core assets and will focus on deepening its retail market share in California, Nevada, Florida, Illinois, Massachusetts, and New York.

Voting Shares Sale Reduced

The company had originally said it was selling some of its Class B subordinate voting shares for approximately $27 million at a price per share of $0.43. However, since the sale of the licenses was moved up, the company decided to reduce the number of shares down to just $20 million. Instead, MedMen will only offer 46,962,648 Class B subordinate voting shares, at a price of $0.43 per share.

Proceeds raised from the Equity Placement are contemplated to be used to finance working capital requirements and to execute on the Company’s retail footprint expansion plans in its core geographic markets.

Debra BorchardtDebra BorchardtNovember 26, 2019


MedMen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF) reported first fiscal quarter revenue of $44 million, up 105% year-over-year and 5% sequentially. The company also reported an eye-popping net loss of $82 million. MedMen delivered an Adjusted EBITDA loss of $22.2 million for the quarter.

Approximately $7.4 million of rent expense was not included in Adjusted EBITDA for the quarter due to the application of IFRS 16 Leases. Adjusted EBITDA loss under the previous methodology would have been $29.6 million compared to a $39.4 million loss in the previous quarter.

“We entered Fiscal 2020 on a mission to build a more nimble and financially flexible MedMen,” said Adam Bierman, MedMen co-founder and chief executive officer. “As we right-size our organization and implement an intensified focus on free cash flow generation, our business will become more efficient, in turn allowing us to better serve our stakeholders. Through the successful execution of these goals, we expect MedMen will be EBITDA positive by the end of calendar year 2020.”

“Since 2016, MedMen has aggressively executed on a plan to become the most recognizable brand in cannabis. The company’s focus on profitability will provide greater flexibility to navigate near term market fluctuations, as they continue to capitalize on the sector’s overall opportunity. We have supported the business since 2016 and are supportive of the vision going forward,” said Ben Rose, executive chairman of the Board and chief investment officer of Wicklow Capital.

Gross margins across retail operations were 52% compared to 50% in the prior quarter. The increase in gross margins reflects increased leverage with suppliers and favorable vendor terms.

Corporate SG&A totaled $30.6 million, a 21% decrease from fiscal second quarter 2019, representing $31.6 million in annualized savings since the initial cost-cutting efforts began.

More Money From Gotham Green

As part of the amendment to the company’s $250 million senior secured credit facility, Gotham Green Partners has an obligation to fund the $10 million tranche by November 29, 2019.

Debra BorchardtDebra BorchardtNovember 18, 2019


MedMen Enterprises Inc. (MMEN.CN) (MMNFF) claimed to be the unicorn of marijuana companies when the California-based business went public in May of 2018. Now just 18 months later, it has a market cap of $170 million, according to Yahoo Finance, and is being forced to dramatically curtail its plans.

On Friday, the company said it was taking several steps to achieve profitability including laying off of 190 employees or 20% of its workforce, cutting back on store openings and selling assets.

Cowen & Co senior analyst Vivien Azer wrote, “While MMEN has established leading brand equity in California, it has come at a significant cost. The announced changes are clearly necessary if MMEN aims to remain a going concern, in particular in a capital constrained environment. That said, the magnitude of the change, for an organization that has experienced an unusually high amount of turnover in senior leadership, will present challenges from an execution standpoint. Maintain Underperform.”


“We have a clear plan to increase our market share, while at the same time enhancing our margins and reducing our corporate overhead,” said Adam Bierman, MedMen co-founder, and chief executive officer. “We must unlock our operating leverage and bring the company to positive EBITDA. Given market conditions, capital allocation is more critical than ever. As such, we announced a layoff of over 190 MedMen employees.”

Market watchers may recall that when the company went public, Bierman and his partner Andrew Modlin were criticized for the amount of money they were paying themselves. In subsequent quarters, analysts pointed to the company’s extremely high expenses, but Bierman would explain it away as the cost of building a new company.

Bierman added, “This layoff includes many hard-working, mission-based people whose presence will be sorely missed. While it is never easy to let employees go from the MedMen Family, we believe this decision is in the best interest of our company as we position ourselves for growth in the years ahead.” No doubt those laid off employees will be thinking about the mansion Modlin just acquired for $11 million in July.

The company also said it was consolidating its offices, which would foster team building as well as saving money. The remaining employees will have a share-based reward program based on the company meeting certain targets. MedMen also noted that it will trim too many layers of overlapping jobs.

In addition to the employee layoffs, which the company said would save $10 million, MedMen is also selling its interest in Treehouse REIT for net proceeds of $14 million. So far, its gotten $7 million and has agreements to sell the remainder. Treehouse was buying the MedMen properties and then MedMen was leasing them back, an option that has increased within the industry as cannabis companies monetize their properties as financing has gotten more expensive.

MedMen had been on an aggressive expansion plan as it spent millions on dispensaries and licenses in a quest to be one of the largest multi-state operators. Now the company is saying it will cut back on store openings in 2020 and only open a dispensary that will make over $10 million in the first 12 months. It will delay further spending in New York in Arizona.

Selling Assets

The company has hired Canaccord Genuity to “explore strategic alternatives for certain operations and licenses in states that are currently deemed not critical to the Company’s retail footprint.” It has also sold other investments in various brands and has netted $8 million so far.

Cutting Expenses

Not only is the company laying off employees, but it is also cutting back on its marketing and technology budgets in order to save $20 million. In other words, don’t expect any more Spike Jonze videos. MedMen said it thinks it can save $2 million by renegotiating insurance policies and outsourcing human resources.

The stock was lately trading at 98 cents, down from its 52-week high of $4.19. Cowen & Co. has a target price of 85 cents.


StaffStaffOctober 29, 2019


On Tuesday, Cowen & Co. senior analyst Vivien Azer issued new comments on MedMen MedMen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF) following the company’s earnings announcement after the close of trading on Monday. Azer has an Underperform rating on the company and an 85 cent price target.

She pointed out that the company delivered a bigger than expected adjusted EBITDA loss, and then backed away from previous guidance on the company’s cost-cutting goals.

She wrote, “In FY4Q19, MMEN continued on its cost-cutting pathway, having reduced corporate SG&A spend by 14.6% or $5.6 mm relative to the company’s December spend (FY2Q19). Importantly, however, the company reiterated its cost-cutting target relative to the guidance offered in May 2019 (where they called for a 20% reduction from 2Q to 2Q). This, unfortunately, ignores the company’s most recent guidance from August, where the company: 1) expanded the cost-cutting target to a 30% SG&A reduction, and 2) targeted achieving this bigger reduction by the September quarter (one quarter earlier).”

Azer also highlighted the changes to Gotham Green’s investment saying, “In our view, this change reflects a capital preservation stance from MMEN’s lenders, as they are offering near-term bridge financing, while also acknowledging that medium-term financing will be dependent on improved financial metrics, but clearly not at the rate they had originally envisioned.”

Azer has adjusted her estimate for the company and now believes that in FY 2020, MedMen will generate $244.4 million in sales, growing to $424.7 mm in sales in FY2021. She is inline with the company’s projections to “achieve break-even adjusted EBITDA around calendar 4Q20 (FY 2Q21), where we have the company losing $4.5 mm in EBITDA, but being EBITDA positive in the following quarter.”

Looking Ahead

“On the retail front, we saw another deceleration in quarter over quarter growth, which was up 13% (vs. +16% in 3Q19); meanwhile wholesale revenues were up 49% QoQ in FY 4Q19,” Azer wrote in her note “While we commend the company’s commitment to transitioning its revenues away from retail (which currently accounts for 93% of sales), MMEN is behind on this initiative, relative to its peers under our coverage (where other operators, like GTI, generate as much as 42% of revenues from non-retail sales).”

Debra BorchardtDebra BorchardtOctober 29, 2019


Following its earnings announcement on Monday after the close, MedMen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF) said that it was making certain amendments to its $250 million senior secured convertible credit facility arranged by Gotham Green Partners including changes to the company’s board. MedMen said it has agreed to form a committee to select new independent directors to be appointed or elected to the board, which directors would form a majority of the board. MedMen said it will propose director candidates to this committee for consideration and approval.

Changes To The Terms

MedMen said that the aggregate amount that remains available to be borrowed has not changed, but “In order to minimize dilution given the current capital market environment, both parties have agreed to amend the size of both Tranche 3 and Tranche 4, as well as the timing of Tranche 3. Tranche 3 now consists of $10 million in available credit and Tranche 4 consists of $115 million in available credit. The parties anticipate that Tranche 3 will be funded within 30 days instead of the originally proposed date in December 2019.”

The larger Tranch 4 will require the consent of both MedMen and Gotham Green under the Facility. Some of the reporting and financial covenants under the Facility have also been modified to provide MedMen with additional balance sheet flexibility. Changes in the covenants included a reduction in required minimum cash balances, removal of restrictions on equity issuances and an additional ability to spin-out or borrow against certain non-core assets, in addition to sales and indebtedness that were permitted prior to the amendment.

MedMen’s Deals With Gotham Green


In March of this year, MedMen signed a binding term sheet for a senior secured convertible credit facility of up to $250 million from funds managed by cannabis investor Gotham Green Partners.  MedMen said at the time that it thought this was the largest investment to date by a single investor in a publicly-traded cannabis company with U.S. operations. At that time, the stock was trading over C$4  on the CSE and $3 plus change on the OTC.


Then in July, MedMen went back to Gotham Green with participation from Wicklow Capital, agreed to an additional $30 million in an equity commitment to MedMen, bringing the total financing commitment to $280 million. To date, Gotham Green Partners had funded $100 million of the total commitment.

The terms were amended to reflect the drop in the company’s share price.  “Pursuant to Tranche 1 of the Facility will be changed from $3.29 to $2.55, which represents a 12% premium over the Company’s 20 trading day VWAP as of July 8, 2019.” In addition, Gotham Green Partners and Wicklow Capital have committed to a $30 million non-brokered financing of Subordinate Voting Shares at a price equal to $2.37 per share. The Equity Placement is conditional upon the satisfaction of customary conditions, including but not limited to the receipt of all necessary approvals. MedMen shares in July were trading at approximately $2.53.


One month later, the deal was amended again. In August, MedMen said that the conversion price was lowered to $2.55 for the first Tranche. The second Tranche conversion price was dropped to $2.17. The second Tranche was expected to be for $75 million and that has dropped to $50 million. “The gross proceeds from the Equity Placement together with the remaining financing commitment under the Facility total US$155 million.”

So, in August it was no longer a $250 million investment, but now it is back to being characterized as a $250 million investment.

Debra BorchardtDebra BorchardtOctober 28, 2019


MedMen Enterprises Inc.  (CSE: MMEN) (OTCQX: MMNFF) fourth-quarter revenue of $42 million, up 104% year over year, but the net losses were an eye-popping $82.9 million.

The company’s full-year revenue was $130 million, up 227% year over year. The full-year net loss was $277.0 million, with net loss attributable to shareholders of MedMen Enterprises $79.1 million or loss of $0.75 per basic and diluted share. The company spent $42 million in executive compensation for the year. This compares to a net loss of $113.9 million, with net loss attributed to shareholders of MedMen Enterprises $68.3 million or loss of $1.69 per basic and diluted share, for fiscal 2018.

“Fiscal 2019 was a transformative year for MedMen, with over two million completed retail transactions to date and revenues increasing 227% year-over-year,” said Adam Bierman, MedMen co-founder and chief executive officer. “Our success was due, largely in part, to our loyal customer base. Throughout the year, we served over one million customers from all 50 states and more than 100 countries. In California, the largest cannabis market in the world, MedMen surpassed a record $110 million in annualized run-rate retail revenue.”

Mr. Bierman continued, “While industry tailwinds propelled us forward over the past twelve months, changing macroeconomic conditions have led us to refocus our strategy, to reevaluate our assets and to determine where it makes most sense to allocate capital going forward. As we progress into the next fiscal year, our go-forward strategy will therefore focus on three key objectives: optimizing our current retail assets, unlocking the further potential of our factories, and leveraging our omnichannel strategy. As we bring all of our factories online and up to full capacity, and simultaneously optimize our current retail assets across our core geographic markets, we continue on our path toward profitability.”

Gross margins fell to 50% in the fourth quarter compared to 53% in the prior quarter. The company attributed the decline in gross margins “to new store openings, which initially have lower gross margins.” The company reported an Adjusted EBITDA loss of $39.4 million for the fourth quarter, representing a 7% improvement from the previous quarter.

The company wrote in its filing that it could be considered at risk of ongoing concern citing, “The amount of new revenue to be generated from ongoing and planned operationalization of existing licenses to provide sufficient cash flow to fund operations and other committed expenditures.”

Production Costs Flat, Prices Fall

Costs of Production Per Gram were essentially flat $0.70 to $3.30 (2019) versus $0.72 to $3.05 (2018). Prices fell though, Selling Price Per Active Gram $3.26 to $5.61 (2019) versus $5.28 to $6.54 (2018).


MedMen seems to have refocused itself on the California market versus a nationwide expansion. The California retail revenue totaled $27.5 million for the quarter. MedMen increased its total California retail license count to 17. Of these 17 retail licenses, 13 are operational as MedMen stores. The company was also recently awarded a commercial retail license in Pasadena, California. MedMen said it expects to have a total of 30 operating retail locations in California by the end of the calendar year 2020.

MedMen added a flagship retail location in Long Beach situated strategically between its Santa Ana and LAX stores. The company also opened a second San Diego retail location in Sorrento Valley. During the quarter, MedMen was also awarded one of six retail licenses available in the City of Pasadena. MedMen continued to expand its Northern California retail footprint announcing plans to open a retail store in the city of Vallejo upon completion of a pending acquisition of a retail and distribution license.

The City Council of West Hollywood passed an ordinance to extend MedMen’s temporary recreational retail license until January 1, 2021, unless otherwise determined. MedMen continues to work with West Hollywood City Council and various community groups on a long-term resolution.


Video StaffVideo StaffOctober 11, 2019


This is your marijuana money minute for the week ending October 11 from the New West Media in San Francisco. Wow, what a crazy week to see things blow up and more carnage in the cannabis industry. 

Where to start?

MedMen announced it decided to terminate the deal with PharmaCann that had been valued at $684 million. MedMen said it wants to focus more on its California market and go deeper into its strengths. As a consolation prize, Medmen gets PharmaCann’s Illinois licenses as part of the termination fee. Of course, MedMen has been touting its proforma numbers with Pharmacann and so now those have to be dialed back.

Speaking of dialing back, HEXO Corp said that its previously projected revenues were a bit lofty. The company said it had to reduce its revenue estimates to a range of $46-$48 million for the year, significantly lower than the $400 million it said it would do in 2020. That stock got spanked hard.

The Green Organic Dutchman said that it was considering new financing to complete the construction of two of its facilities. The only problem with that is that on previous investment decks, TGOD claimed that their projects were fully funded. The company also says it has $50 million in cash. How much money d they possibly need if they are only weeks away from completion. The stock lost 40% of its value in 2 days. 

More divorce news.

Aleafia said it was no longer going to buy cannabis from Aphria saying Aphria failed to meet its supply obligations. Aphria seemed to toss it off and said they would still achieve net positive income for this past quarter. To make things more awkward, Aphria owns a lot of Aleafia stock.

And then finally, two Russian nationals were arrested for campaign finance violations this week and it turns out that they had applied for marijuana licenses in Nevada. They didn’t get them because they were late by 2 months.

StaffStaffOctober 8, 2019


It’s time for your Daily Hit of cannabis financial news for October 8, 2019.

On The Site


MedMen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF) and PharmaCann, LLC made a big deal back in December of 2018 that MedMen would buy PharmaCann in an all-stock transaction. That deal, once valued at $684 million, is now off. MedMen is now saying that it will focus on leveraging its retail brand, its leadership position in California and its digital platform to grow the business will create greater shareholder value than the completion of the transaction.

The company also took this moment to announce that Zeeshan Hyder has been appointed Chief Financial Officer at MedMen. Mr. Hyder, currently MedMen’s Chief Corporate Development Officer, has been an integral part of the leadership team at MedMen since 2017, overseeing corporate development, investor relations and other financial growth initiatives. To date, Mr. Hyder has led over $300M in M&A deals executed, partnered with the CEO to take the company public and raised $500M in capital for direct investment into the business.

Hyder succeeds 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 James Parker who only lasted a year and half and is currently suing Medmen for breach of contract.

Aleafia Health

Aleafia Health Inc. (TSX: ALEF)(OTC: ALEAF) has terminated its deal to buy cannabis from Aphria Inc. (TSX: APHA)(NYSE: APHA) saying Aphria failed to meet its supply obligations. The deal that was agreed to on September 11, 2018 said that Aphria would provide up to 175,000 kg equivalents of cannabis products over an initial five-year term, commencing May 1, 2019. Aleafia said the termination should not affect the company. A few weeks ago, Aleafia told the market on Tuesday that it will achieve positive net income for the quarter ending September 30, 2019. The company also stated that it had $51 million in cash on hand.

Aphria released a statement saying, “We are disappointed that Aleafia has chosen to terminate its Agreement with Aphria Inc. The Company had every intention of fulfilling its obligations under the Agreement. As a large shareholder of Aleafia, Aphria made good faith efforts to ensure the continuation of the Agreement understanding it was in the best interest of all parties involved. However, the termination of this legacy Agreement frees up significant supply allowing the Company to service its brands that are in high-demand across the country.”

In Other News

Target Group Inc (OTCQB: CBDY) announced that its wholly-owned subsidiary, Canary RX Inc (“Canary”), has been granted licenses to cultivate, process and sell cannabis pursuant to the Cannabis Act (Bill C-45). Strategically located just outside of Toronto, ON, Canary RX will begin cultivating cannabis in its 44,000 square foot facility, producing 3600 kilograms annually.

The Supreme Cannabis Company, Inc.  (TSX: FIRE) (OTCQX: SPRWF) announced that Blissco Cannabis Corp., Supreme Cannabis’ premium wellness brand and a multi-licensed processor and distributor, has received licensing approval from Health Canada for the sale of cannabis oils from its facility in Langley, British Columbia.



About Us

The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


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