MedMen Loses Another CEO

MedMen Loses Another CEO
GOING MED MedMen's Emeryville dispensary. (Photo Courtesy MedMen)

MedMen, the failing chain of cannabis dispensaries with a history of gross mismanagement behind it, and most likely a crash-and-burn directly ahead of it, is going through CEOs like Oakland goes through police chiefs. On Wednesday, the company announced via a terse press release that Ellen Deutsch Harrison, its fourth CEO in four years, is departing after just seven months on the job.

At the same time, the board appointed Richard Ormand as “chief restructuring officer.” Harrison also stepped down from the board of directors, as did Michael Serruya, who had served as CEO for a time.

The company operates 23 stores in six states. Its three Bay Area stories, in Emeryville, San Jose, and San Francisco, were still operating as of Wednesday. Last month, it sold off stores in Nevada and Arizona. It withdrew from the Florida market last August. These moves are meant to forestall a total collapse, but the company’s deficit

The company’s stock, which is traded over the counter, hit zero last week, and OTC Markets Group recently downgraded the company’s stock listing so that it is no longer viewable by the public. Some traders reported online that they had tried to unload shares, but their trades would not go through.

It’s an astonishing fall for a company that was considered the “the Apple Store of cannabis” just a few years ago. It was the first cannabis company to become a “unicorn” (a privately held firm worth over $1 billion). It was such a presence it inspired “South Park” to mock its excesses and obnoxious marketing practices. That prompted founder and then-CEO Adam Bierman to declare himself “humbled” to be considered so “culturally relevant.”

Just a few months later, Bierman was ousted from the company, and stories of profligate spending and lavish parties started coming out, along with allegations of illegal political contributions, and lawsuits from employees and others. There were reports as early as 2020, when that spending was still happening, that MadMen was failing to pay some of its vendors.

Bierman still brags about the “unicorn” thing on his LinkedIn profile

Management has been trying to right the ship since his ouster, but the faltering cannabis economy, particularly in California, has made that difficult, to say the least.

Expect more asset sales in the near future, though they likely won’t help much. As of last May, the last time MadMen filed financial statements, the company reportedly had just $7.6 million in cash on hand, and a working-capital deficit of $383.2 million.

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