For the past two years, seemingly everywhere you looked in legal cannabis markets, you’d find the signature red and white High Times-esque branding belonging to MedMen, Inc. There is a meme floating around that says something like “When the weed stores start to look like Apple Stores, it’s time to start letting a lot of people out of jail.” That’s MedMen… not just the flavorless aesthetic of their interior design, but the whole concept that it’s fucked up that people are sitting in prison right now for committing “crimes” that the Chads at Medmen now profit from.
But are they profiting?
If you listen to MedMen CEO Adam Bierman, the blue suited brown shoed cannabro of all cannabros, his company has positioned itself for success not only in California, but in markets nationwide. In a recent interview with Benzinga, Bierman touted MedMen as THE premiere brand in the U.S. cannabis industry. If you look at the numbers, however, Bierman’s claim becomes as midsy as the weed on his top shelf.
Since peaking in October of 2018, the company’s stock value plummeted 64% over the course of the next 8-10 months and in July of 2019 the company was simultaneously seeking more investment capital, firing its Chief Financial Officer, and cringing as its President and co-Founder Andrew Modlin laid out $11 million for a Hollywood Hills mansion. In another freefall, the stock price has dropped by 60% between October of 2019 and present day on the Canadian stock market.
BURN RATE CRITICAL
From their SoCal headquarters, the company has expanded into markets from coast to coast, spending millions to influence pending political decisions on potential cannabis laws while spending tens of millions in those same markets trying to gobble up as much high end/compliant real estate as possible while also buying out established entities. They’ve been accused by grassroots activists up and down the East Coast from New York to Florida of using investor cash to persuade lawmakers to disallow home growing of cannabis so that consumers are forced into their overpriced dispensaries to get access to legal cannabis. Most recently, the company fled from Arizona altogether, its tail between its legs after dumping untold amounts of cash into the market with zero return to show for it.
In the final months of 2019 MedMen, Inc. laid off 40% of its total workforce as capital dried up and profits remained out of reach. Happy holidays to those former employees be damned, Modlin has a mortgage to pay. Another “layoff event” is rumored to be taking place the first week of February and will reportedly cut into senior level staff.
Now come grassroots reports just this past Friday that this dumpsterfire of a weed business might literally be bankrupt as farmers and vendors who are owed money by MedMen are instead getting sad texts from their corporate reps along with offers to take half of what they’re owed and STFU or to take shares of dogshit MedMen stock instead of, you know, actual money.
Some financial watchdogs earmarked January of 2020 as the breaking point for MedMen, Inc. and it appears they might be right. Hell, a LOT of licensed cannabis companies are going to go up in smoke this year, you can count on that. The MedMen model of “market domination through oversaturation” has proven to be a losing way of brand building in the mysterious world of marijuana marketing.
Here in California, their way of doing business spells out the precise reason why old school heads refuse to patronize the legal market and instead stick to the streets as they always have.
First, through license stacking, they tried the vertical integration route, thinking they’d toss some seeds in a warehouse or greenhouse somewhere and a few months later harvest their money.
One disgruntled whistleblower claims that the company has yet to pull one crop of its own weed that wasn’t larfy, seedy, midzotics that even MedMen couldn’t lower themselves to jar up and sell. So then they try to find the cheapest products with the highest margins to instead fill their shelves with, charging premiums for shelf space totally ignorant of consumer’s demand for legacy brands. Still failing, they hire Spike Jonze to help them mansplain CannabisCulture™ to the rest of us, leading to one of the most epic South Park takedowns of all time - #notegrity
But perhaps their most egregious affront to not only the cannabis movement, but to free market economics as well, is their support for limited licensing as we see here in California. In this 2018 television interview with financial wacko Jim Kramer, MedMen’s Bierman disparages the trailblazing markets of Colorado, Washington, and Oregon saying they are “small markets” that “don’t matter” simply because, he admits, they are saturated with competition.
He praises the fact that every adult-use cannabis measure passed since those has placed crippling restrictions on the licensing process. He sees this as a benefit for MedMen who can afford to enter those markets, and even helps shape the rules for them, but fails to see how such restrictions just pour gasoline on the red hot street markets that he truly has to compete with.
Now, as the Titanic of Boof crashes into the iceberg of real cannabis culture and begins to capsize, rafts of pissed off employees are paddling straight to social media to share their insider perspectives from their time onboard at MedMen. Have a look at this gem where an alleged former extraction tech with the company claims that they are turning trash weed that was contaminated with a mosquito poison into purple distillate for vape pens. Yikes if true.
As cash-strapped vendors wait to see if they’ll ever be reimbursed, many are wondering if MedMen can even file bankruptcy? On the surface, it seems that they would not be able to considering the federal illegality of cannabis, but the way that they have diversified their horrible spending habits between real estate and reefer may give them just enough wiggle room to squeeze out of their obligations.