If Abner Kurtin, founder, CEO and chair of cannabis multistate operator Ascend Wellness Holdings, is known for anything, it’s being outspoken.
In January, after MedMen Enterprises failed to close Ascend’s acquisition of its New York license, prompting a lawsuit, Kurtin posted a series of tweets taking aim at the Los Angeles-based company.
“As New York and other states adopt adult-use cannabis, MedMen’s actions send the worst message – namely, that certain cannabis companies cannot be trusted to keep their word,” Kurtin wrote on Jan. 3.
“MedMen has chosen to disregard the authority of New York regulators.”
In March, he called MedMen management “criminals,” telling Business Insider that “this is an attempt to extort Ascend for a higher price. They want to make a buck.”
A MedMen lawyer said, “… we won’t be responding to nonsense,” according to Business Insider.
Just recently, after the companies agreed to settle on $88 million for the sale, New York-headquartered Ascend walked away from the deal.
Kurtin also has been an outspoken social justice advocate, with Ascend having donated more than $1 million to Last Prisoner Project, a nonprofit that works to support people convicted of marijuana crimes.
On his LinkedIn profile, Kurtin describes himself as a “Libertarian on a quest to end mass incarceration of non-violent criminals.”
But the Ascend exec has been quiet since being charged with battery earlier this month after a witness in Miami reported a physical altercation allegedly involving Kurtin and his girlfriend.
Kurtin even deactivated his Twitter account – but not before he posted (and subsequently deleted) a series of three photos with the hashtag, #Potstocks:
- The first was a photo of Kurtin and the alleged victim, cuddling and smiling.
- The second and third photos showed an affidavit of non-prosecution, signed by the alleged victim, requesting a “complete dismissal of these charges because there was no physical violence in the case.”
A hearing is scheduled for Sept. 30; in the meantime, Ascend Wellness Holdings (AWH) is conducting its own investigation.
“While the company cannot comment on an active investigation, it is treating this matter with the utmost seriousness and will continue to evaluate appropriate steps as more information becomes available,” Ascend said in a news release.
“The independent members of the board are keenly attuned to the company, its shareholders, and employees, and the management team is focused on ensuring AWH continues to operate effectively during this time.”
Neither Kurtin nor Ascend responded to MJBizDaily requests for comment.
‘This is serious’
Marijuana business consultants contacted by MJBizDaily agreed that the company’s investigation shows that Ascend is taking the matter seriously.
Sara Gullickson, founder and CEO of The Cannabis Business Advisors in Phoenix, said that publicly traded cannabis companies require exemplary behavior from executives.
“The marijuana industry has touted itself as a place for the underdog, a place for activists and a place for women,” she said. “As a woman CEO and as somebody that helped build the industry for the last 13 years, this is serious.
“Not only is it serious for their board and their (retail) outlets, but it’s serious for their shareholders.”
Potential investors will not only examine the financials of a company but also the people managing it, Gullickson said. And cannabis is still illegal in many regions.
“Right now, we’re working in the South, and some of our clients are nervous to bring it up to their other business partners because it’s still a taboo industry,” she said.
“We need people that are going to uphold the industry in a way where it becomes less of a taboo.”
As Ascend’s board continues its investigation, shareholders will be a priority, although court proceedings could also affect how the board responds, Gullickson said.
“Depending on what the outcome is, in certain jurisdictions, it could be cumbersome for them (to get licenses to expand),” she noted.
Allegations are only one problem
Avis Bulbulyan, the CEO of California-based consulting firm Siva Enterprises, said Ascend’s investigation will have to be thorough.
“Firing him could lead to other legal liabilities between him and the board and the company,” Bulbulyan said. “You kind of need it to play out.”
While the allegations are deplorable, Bulbulyan added, it could be less significant on a business level than other issues the company is facing.
“None of the publicly listed companies are doing too well right now,” he said. “I think they (Ascend) have other issues that are more concerning with respect to the company itself.”
Chief among those issues are debt and a focus on vertical integration – without an understanding of how to drive consumer loyalty long term.
This year in New Jersey, for example, Ascend launched adult-use sales at what were once medical marijuana dispensaries exclusively serving MMJ patients.
But Bulbulyan isn’t convinced the company can retain those customers if more licenses are issued, if interstate commerce is allowed or if cannabis is rescheduled in the near future.
“Customers are actually waiting and anticipating and begging for more options,” he said. “And as soon as they’re given more options, they’re all going to bail.”
Until recently, investment consultant Jesse Redmond, the creator of cannabis investment website Green Giants, was betting on Ascend.
“Ascend has one of the best footprints of any U.S. operator,” he told MJBizDaily via email, referring to the company’s operations in five states.
“Revenues are accelerating in 2022, largely due to their three stores and expanding cultivation in New Jersey.
“This, combined with one of the cheaper valuations of any top-10 MSO, made them one of the more attractive cannabis stocks.”
But after news broke about the charge against Kurtin, Redmond decided to sell his Ascend stocks.
Even though the case hasn’t been tried and Ascend’s investigation isn’t complete, the allegations still tainted Redmond’s view of the MSO’s management.
He also doubts the company can attract the institutional investment he previously was banking on.
“After this incident, I don’t expect large allocators to invest,” he said. “We are seeing selling by blue-chip funds.”
As of Sept. 20, shares in Ascend were $1.80, down nearly 25% from a Sept. 6 share price of $2.39.
As shareholders and the industry wait for the outcome of Kurtin’s pending court proceedings and Ascend’s investigation, Redmond said he isn’t concerned that the company’s expansion plans will be compromised in the meantime.
“Not in the near term,” he said. “They have other strong leaders that can execute current initiatives.”
Kate Robertson can be reached at firstname.lastname@example.org.