MedMen’s remaining medical marijuana dispensary in Arizona is in Scottsdale close to the Talking Stick Resort.


Bad information continues to pile up for California-based MedMen Enterprises.

After the multistate operator’s founders stepped down from management roles in January, their replacements have continued to wrestle to proper the ship, and simply final month, MedMen misplaced a medical marijuana enterprise license in Virginia.

Recently, MedMen has been additional hit with:

  • A lawsuit filed in May that to date has resulted in at the least the short-term closure of two MedMen-branded Arizona shops, in Tempe and Scottsdale.
  • The potential loss of a retail license in Pasadena, California.
  • A brand new demand for $600,000 in legal fees from former Chief Financial Officer James Parker, who’s demanding the fee in an ongoing lawsuit he filed towards MedMen in January 2019.

Combined, the three new hurdles may simply price the corporate thousands and thousands, to not point out the prices related to maintaining two previously operational shops in Arizona shuttered whereas the litigation performs out.

A MedMen spokesman declined to remark for this story. But in an electronic mail to Marijuana Business Daily, he cited a recent company news release touting plans for a “financial restructuring and turnaround plan,” which incorporates deferring $32 million in monetary commitments for a 12 months.

“Implementing our turnaround plan is the best way to ensure that MedMen continues on its path to building the leading cannabis retailer in the U.S.,” MedMen interim CEO Tom Lynch mentioned in the discharge.

But Mike Regan, an fairness analyst and managing member of Denver-based MJResearchCo, identified the potential hurdles going through MedMen’s plans for restoration.

“Losing the Pasadena license would be a negative compared to MedMen’s restructuring plan, since Pasadena is a planned opening in the next 12 months,” he famous. “A license that can’t be transferred even internally isn’t price a lot to an investor or creditor.

“MedMen planned to sell the Arizona dispensaries as part of the restructuring plan, so the question is if the lawsuit has delayed this process. The receipt of $10 million on July 2 for a future sale of a single unspecified non-California license may be related to this issue.”

Arizona

The Arizona case started in May when the unique house owners of two licensed Arizona MMJ dispensaries – CSI in Scottsdale and Kannaboost in Tempe – filed swimsuit towards MedMen for not paying $12 million nonetheless owed from an acquisition deal struck in February 2019, in response to court docket filings.

MedMen initially agreed to pay $15 million to buy each licenses, with a $three million down fee made final August, in response to the lawsuit.

In its personal court docket filings, MedMen famous that it’s paid $33 million for the 2 retailers.

The remaining $12 million, plus curiosity, was due in February.

But the corporate was not capable of make that fee, and the deadline was prolonged a number of occasions, till the unique license house owners filed swimsuit towards MedMen, in response to court docket information.

MedMen has countered in court docket filings that it has till the tip of the 12 months to pay the debt below an settlement it says was solidified between the events.

The case is ongoing, however the two shops seem to have been at the least briefly shuttered.

According to MedMen’s web site, one Arizona location remains to be operational, in Scottsdale.

California

In Pasadena, MedMen may lose a retail license it received final 12 months due to government turnover on the firm, in response to native information outlet Pasadena Now.

The Pasadena metropolis supervisor’s workplace notified MedMen on July 1 that its utility may now not be legitimate due to the departure of at the least seven firm officers.

Pasadena Now famous the officers – which it didn’t establish – have been “listed in MedMen’s initial January 2019 application as owners or key staff.”

According to Pasadena officers, that quantities to a “change in control” of the corporate and, due to this fact, the license, which is prohibited below town’s marijuana licensing guidelines.

The metropolis gave MedMen 10 days to show “it remains under the control of the people listed on its application,” Pasadena Now reported.

Given the excessive turnover at MedMen – together with the departures of former CEO Adam Bierman and ex-President Andrew Modlin – that seems unlikely.

Parker

To add to MedMen’s potential monetary burdens, former CFO Parker is asking a choose to order the corporate to pay $600,000 in authorized charges he claims he’s owed below his unique employment contract. MedMen has hotly disputed that declare.

According to Legislation360, MedMen has responded that Parker himself violated the phrases of his contract by departing with out a required 90-day discover, which nullifies the corporate’s obligation to pay his authorized payments.

MedMen trades on the Canadian Securities Exchange below the ticker image MMEN and on the U.S. over-the-counter markets as MMNFF.

John Schroyer might be reached at [email protected]



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