MedMen Enterprises Inc.: A Tale of Decline in the Cannabis Industry

LOS ANGELES- MedMen Enterprises Inc. a player in the cannabis industry, now faces a precarious future as its stock price plummets. Recent developments have seen the company’s stock fall to negligible values, with Green Market Report noting that MedMen’s stock has been demoted to a level where prices are no longer publicly quoted, despite some ongoing light trading.

Shareholders on the Reddit board Weedstocks have reported difficulties in selling shares, with trades not being executed. Yahoo Finance recorded a trading volume of 24,139 shares for MedMen, with a peak price of merely one penny. The last recorded trade of the company’s shares on the Canadian Stock Exchange was on January 4, 2024, with a high of two Canadian cents.

In a bid to navigate these turbulent waters, MedMen recently completed the sale of its Arizona assets to Mint for $14 million. This influx of capital is expected to aid the company in updating its filings, which have led to punitive measures from trading exchanges. Additionally, MedMen has announced the sale of certain Nevada assets, pending regulatory approval. The deal, involving the sale of MMOF Vegas Retail, Inc. and MMOF Vegas Retail 2, Inc. to Retail Facilities Operations NV, LLC, managed by Eivan Shahara, Co-Founder and CEO of Brightroot, the parent company of Mint Cannabis, is projected to generate another $10 million.

Despite these efforts, MedMen faces a daunting deficit exceeding $400 million, with some accounts payable and liabilities being settled using its significantly devalued stock. This financial situation has led to speculation about potential ownership changes, with companies that have invested in MedMen poised to contest for the remaining assets.

Notable investors in MedMen include Tilray (NASDAQ: TLRY), which in 2021 issued shares valued at $117,804 to acquire a 68% interest in Superhero Acquisition L.P. (SH Acquisition), the entity that purchased a senior secured convertible note issued by MedMen. Another significant partner, Gotham Green, has invested heavily in MedMen over the years and is owed substantial quarterly interest payments, which have been paid in shares, further entangling its equity and debt relationship with MedMen.

The future of MedMen remains uncertain. While the company strives to revive its fortunes, the sheer scale of its liabilities and the dilution of its stock value suggest that even if MedMen recovers, it may be a shadow of its former self. This situation encapsulates the volatility and challenges faced by companies in the rapidly evolving cannabis industry.