Provided by Dow Jones
Jan 24, 2024 5:50 AM PST
By Steve Gelsi
Once hailed as the first cannabis unicorn, MedMen's fortunes have gone up in smoke
MedMen Enterprises Inc.'s stock has drawn a cease-trade order as the once high-flying cannabis company has dropped from a $3 billion valuation in 2018 to near zero.
Back in 2018 when California's recreational pot market was gearing up, MedMen Enterprises (MMNFF) opened its flagship store in Midtown Manhattan's upscale 5th Avenue to sell medical cannabis and hyped it as the Apple Store of Weed.
Its stock hit an all-time closing high of $6.94 on Oct 16, 2018, with a market cap of $3 billion.
On Jan. 12, the stock fell to $0.0006, a tiny fraction of a penny.
MedMen was notified on Jan. 11 by the OTC Markets Group Inc. that the company's shares have been moved to the OTC Expert Market from the OTCQB market because it has yet to file a 2023 annual report or a 10-Q for the quarter ending Sept 30, the company said in a filing
MedMen said it intends to reapply to the OTCQB once it files the reports with the Securities and Exchange Commission, according to the filing.
The OTC currently has a warning message attached to MedMen stock due to its current status as eligible for unsolicited quotes only.
On Jan. 5, the British Columbia Securities Commission and the Ontario Securities Commission issued a cease-trade order on MedMen's listing on the Canadian Securities Exchange, due to a lack of financial filing
MedMen said on Dec. 21 it did not know when it would complete the filings.
MarketWatch did not immediately receive a reply from MedMen to an email seeking comment.
In a May filing, MedMen listed total liabilities of about $573 million, and a shareholder deficit of about $357 million.
Its net loss for the three months ended March 25 increased to $31.5 million from $29.8 million in the year-ago quarter, as revenue fell to $27.2 million from $35.3 million in the year-ago period.
MedMen has been selling assets to raise cash.
MedMen said on Jan. 12 that it agreed to sell its non-core business operations in Arizona and assets in Nevada for a minimum of $24 million of cash, plus $5.5 million in short-term seller notes.
MedMen in July named former Acreage Holdings Inc. (ACRHF) and Hain Celestial Group Inc. (HAIN) executive Ellen Deutsch as its new chief executive.
The company's latest difficulties come in the face of strong competition from the illicit market in California, a slower-than-expected rollout of the New York market and other challenges.
But problems started surfacing six years ago when the stock was at its height.
After being founded in 2010 and quickly growing in California and other markets, Los Angeles-based MedMen failed in 2018 in its bid to acquire PharmaCann in a $682 million all-stock deal.
Meanwhile, one of its co-founders, Adam Bierman, left the company in 2020 in a move that sparked a flurry of legal actions. In December of 2022, Bierman won a $3.1 million arbitration settlement with MedMen.
Other problems arose when Ascend Wellness Inc. (AAWH) backed out of a deal to buy MedMen's New York business in 2022 in a move to preserve $70 million in cash
Also read: MedMen puts New York business on selling block after Ascend scraps deal
-Steve Gelsi
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
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