MedMen goes bust

MEDMEN DECLARES BANKRUPTCY
The once high-flying dispensary chain has come back to Earth

What happened: MedMen, the once high-flying dispensary chain has fallen back to Earth. The flashy California-based cannabis retailer on Friday declared bankruptcy and will wind down operations.

As part of the bankruptcy proceedings, the company’s executive team and directors will step down. B. Riley Farber Inc was appointed as MedMen’s bankruptcy trustee. 

MedMen’s stock is listed on the Canadian Securities Exchange, so the company filed for bankruptcy in Canada. As well, the company’s California assets were placed into receivership by the Los Angeles Superior Court. 

Sharp-eyed observers on a few Reddit threads noted that the company had been offering sales that seemed too good to be true — as in, going-out-of-business discounts — earlier this week. 

What they’re saying: “The difficult decision to shut down operations and commence the Bankruptcy Proceedings and Receivership Proceedings was made after careful consideration of the current financial condition of the Company and its subsidiaries, their inability to pay their liabilities as they become due and the anticipated enforcement actions of secured creditors,” the press release said. 

Why it matters: MedMen’s tumultuous rise and fall is emblematic of the cannabis industry’s struggles writ large. 

After California legalized cannabis, and Canada soon followed suit, MedMen received a multibillion-dollar valuation and looked like it was set to dominate the legal industry for years to come.

The company’s flashy stores, in places like Venice Beach’s Abbot Kinney Boulevard and Manhattan’s Fifth Avenue, were dubbed the ‘Apple Store of Weed’ by the press. It looked like MedMen was heralding a new future for the plant and its consumers. 

But it all came crashing down, as MedMen’s founders, Adam Bierman and Andrew Modlin, were the subject of multiple lawsuits over their in-office conduct and allegations of self-dealing before they were forced out of the company. Multiple rescue attempts by its biggest backers and outside executives were unable to dig the company out of the financial hole it put itself in. 

Vendors said their bills went unpaid, and the stock briefly went to zero earlier this year as the company shuttered stores, including its West Hollywood flagship, and laid off employees. 

The final word: 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. 

It’s a new era for cannabis, and hopefully one that’s a little more mature. 

Read more: MedMen once promised to be the Apple of cannabis. Ten years later, its former CEO dishes on how it all went wrong.

-JB

“Trump and his administration took marijuana reform backwards, withdrawing guidelines to limit prosecutions of marijuana offenses that were legal under state laws,” President Joe Biden wrote to supporters in a campaign email. 

Biden has initiated a process to reschedule cannabis to the less restrictive Schedule III and issued a number of federal pardons for cannabis-related offenses. But he has not yet fulfilled his campaign promise to actually deliver on rescheduling — and has not indicated that he’d support full-scale legalization. 

We’ll be watching for mentions of cannabis reform in the upcoming Presidential debates.

The SAFER Banking Act, a cannabis banking bill, will not be part of the Federal Aviation Administration reauthorization package, according to the US Cannabis Council, an industry trade group. Many pro-cannabis lawmakers and industry investors pinned their hopes on the FAA bill being the vehicle for banking reform — alas, to no avail.

New York’s Office of Cannabis Management (OCM) has asked a federal court to dismiss a case where the plaintiff, Valencia AG, claimed that the state’s cannabis licensing process was discriminatory to white males. The OCM has said the plaintiff wouldn’t have been granted a license anyways and his skin color had nothing to do with it. 

The Drug Enforcement Administration wrote a letter to Sen. Elizabeth Warren and others who in January asked the agency to entirely remove cannabis from the list of federally controlled substances. In the letter, the DEA said there would be a public comment period and a hearing on rescheduling. More context here. 

Sam Adams beermaker Boston Beer Co says that, contrary to conventional wisdom, it’s not seeing cannabis-infused beverages cannibalize its beer business. 

Clever Leaves, a medical cannabis firm with operations in Colombia, said its board voted to voluntarily delist its shares from the Nasdaq exchange and deregister from the Securities and Exchange Commission.

Massachusetts-based cannabis dispensary chain Theory Wellness opened Trenton, New Jersey’s first dispensary on Friday.  

New Mexico governor criticizes Homeland Security secretary over cannabis seizures in secret recording | Politico

Pa. lawmakers consider government-run weed dispensaries. The cannabis industry isn’t happy. | Pennsylvania Capital-Star

Mike Tyson on becoming a heavy hitter in weed | Forbes

As he exits Congress, Blumenauer wants his party to embrace pot legalization | The New York Times

This ad from North Carolina Sen. Graig Meyer (D) tells you everything you need to know about racist policing when it comes to cannabis use in less than 40 seconds. Watch it.