.MedMen Demise May Be Harbinger of Change

Will diligence replace flash in the cannabis industry?

Obviously, we should all feel bad for the MedMen employees who are now out of jobs after the once-seemingly high-flying company finally declared bankruptcy last month and announced it would wind down operations. But that aside, anybody who wants to see a healthy, thriving legal cannabis industry should breathe a small sigh of relief over the news.

Or we can hope that MedMen’s demise is a harbinger of change. Cultivated Daily thinks it is: “The halcyon days of young, inexperienced founders raising millions on bold promises to build flashy-yet-unprofitable cannabis companies are over, as investors look for returns and to back diligent operators,” the cannabis newsletter declared last week.

That’s no doubt partly true, at least for the time being. But it took a lot more than just MedMen’s crash-and-burn to get investors to look for “diligent operators” where, previously, a lot of them just looked for the flash. It really only takes a quick look at the industry—the taxes, the regulations, the often-slim margins, the competition from the illicit market, the millions of things that can go wrong—to know that a lack of diligence will mean certain death.

Unlike, say, tech entrepreneurs during the dotcom bubble of the ’90s, cannabis companies can’t really ride for year after year on investor money raised solely on the basis of bullshit marketing drivel. In cannabis, one has to make sales, and those sales have to earn a profit. MedMen tried to emulate the tech boom, and failed miserably. Investors will feel forced to be more wary and less credulous.

At the same time, though, we still live in America in 2024, a land where an obvious lunatic and maladapt is widely considered to be a business genius and a tech visionary, even as he stumbles about, woefully mismanages multiple giant companies that sometimes literally get people killed, makes insane promises, says bigoted stuff and affirmatively provides a platform for literal Nazis to gather. “Late capitalism” has become a cliche for a reason.

Cannabis isn’t free of soulless tech-bro operators whose primary motivations are cash and hip cachet. It likely never will be, though few will measure down to Adam Bierman, the bro who founded MedMen. 

His tale has been told countless times, including in this space, but it involved massive, mindless spending on expansions and acquisitions, lavish bacchanals, Teslas for execs, insane levels of compensation and excesses including him installing a panic room in his house. He’d been gone four years already when MedMen’s final slide began in January as it closed a bunch of stores and its stock was delisted upon reaching a value of zero.

The new management did what it could, but the damage was done. In March, MedMen closed its last Bay Area location in San Francisco, leaving just two stores in California, both in Los Angeles. At its peak, MedMen operated dozens of stores in more than a half-dozen states. 

After it went public, it was “worth” more than $3 billion at its peak. Before that, it had become the pot industry’s first “unicorn”—a private company valued at more than $1 billion. Bierman is still proud of that fact, despite the implosion he caused. On his LinkedIn page, where he lists his current profession as “cannabis futurist,” he actually brags about the company’s erstwhile unicorn status.

There is little room in cannabis for excesses like the ones that killed MedMen. People like Bierman were attracted to the business because it’s still sort of outré and because they were expecting a gold rush. Reality quickly set in, but not quickly enough to save such people from themselves, or to save the industry from near-collapse. And it won’t keep mercenary types from entering the business, especially if and when the business starts to turn around. 

Still, the void left by MedMen might serve as something of an opportunity for those people in the business—and there are many—who just want to make a good living doing what they love.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

East Bay Express E-edition East Bay Express E-edition
19,045FansLike
15,529FollowersFollow
61,790FollowersFollow
spot_img