Former MedMen CFO adds new allegations to lawsuit against cannabis company

James Parker, former chief financial officer for marijuana company MedMen, has come forward with new allegations of wrongdoing against his former employer by adding two more causes of action to the breach of contract lawsuit he filed in January.

The California-based, vertically integrated cannabis company called the lawsuit “baseless” and the allegations “meritless.”

Parker, for his part, now says he should be entitled to additional compensation because, under the terms of his employment agreement, he claims he was guaranteed 4.2 million “full value long-term incentive-plan units,” or equity grants in the company, that would vest over time.

The total he was promised, Parker alleges, was worth $17.5 million in cash.

But, according to the updated suit, he was denied any of those benefits after being terminated in November. He is now seeking restitution.

Parker also now claims that in November MedMen illegally converted many of the promised incentive-plan units into stock – which then were worth about $25 million based on the company’s stock price, the suit alleges – and is refusing to return the holdings.

Perhaps the more salacious new allegation is that MedMen CEO Adam Bierman, President Andrew Modlin and board chair Ben Rose conspired to engage in a short-term stock manipulation scheme that netted them “millions of additional dollars.”

Parker pointed in the suit to the January hiring of digital agency Winning Media for $200,000.

“Winning Media previously had been widely reported in the press to have been implicated in several ‘pump and dump’ schemes where, for a price, it would help drive-up share prices for a limited period of time,” the lawsuit motion reads.

“Rose, Bierman and Modlin knew or should have known that Plaintiff would have strenuously objected to the retention of a company like Winning Media.”

Winning Media then went on a public relations blitz that helped drive up MedMen’s stock price before the OTC Markets Group began looking into the agency’s work on behalf of the company, the suit alleges.

At that point, all promotional efforts ceased, and MedMen tried to distance itself from Winning Media, the suit says.

While defending itself over the Winning Media story in early March, MedMen said none of its company officers had sold any stock in the previous 90 days.

But according to Parker’s updated lawsuit, “what MedMen Enterprises Inc. did not disclose was that the General Partners (including Chairman Rose, CEO Bierman and President Modlin) all had financially benefited from the run-up in stock price to the tune of millions of dollars each, using public company money to fund the Winning Media engagement, and to the direct detriment of their private equity limited partners/investors.”

A MedMen spokeswoman wrote in a statement emailed to Marijuana Business Daily: “As we’ve said in the past, this is a baseless lawsuit for Parker’s financial gain, and we will continue to vigorously defend ourselves in court. We will not be distracted by these meritless allegations.”

John Schroyer can be reached at [email protected]

13 comments on “Former MedMen CFO adds new allegations to lawsuit against cannabis company
  1. NT on

    the guy was NOT terminated….he resigned! And now months later after he wasn’t getting enough traction from his original BS accusations (you know, like they are homophobic-which I am sure was a surprise to the company President and VP of GA), he is now coming up with new BS. This is clearly an effort to extract monies undeserved by utilizing the media’s love for a salacious story to get there. He had an opportunity to make lots of money, he did not perform, got pressure as a result and then ran like a scared kitten. End of story. This guy is a clown. That’s my two cents.

    Reply
  2. ANDREW DEANGELO on

    We are seeing a ton of litigation in our industry now. A lot of in-fighting. A disintegrating cultural experience in our companies. Combining these trends with robust M&A activity, the writing is on the wall for a lot more of this conflict and cultural implosions.

    The consumer is the one who is often forgotten as these fights suck up attention and resources. That is too bad because the consumer needs attention and resources at this particular moment in our industry life cycle.

    Be careful everyone. Don’t forget the lessons the plant teaches us. Focus on the WE not the ME. Build trust and shared consciousness not command and control. Pay attention to culture. Focus on the consumer.

    Our industry is meant to be different. Let’s prove that to be right not wrong.

    Reply
    • Pat on

      Yes, I agree. Focus on the consumer. Give him/her more choices by allowing ( via the state of ca. ) more competition in the market place: More mom-pop shop cultivators, dispensaries, delivery businesses, processor’s, up and down the chain. The prices come down, quality improves, the consumers have more choices, and the corruption starts “weeding” itself out. The industry in ca. is quite corrupt, as the legislature and the original cartels continue to feed off of each other at the “consumer’s” expense. While people like Medmen get caught up in their own drama, mom-pop shops will be there to level the playing field and take up the slack. That’s called: Competition.

      Reply
  3. Dr. Dre on

    The founders and board member should resign. They’ve done more harm than good and the company must rebrand.

    Reply
  4. T A on

    Until you start writing articles about all the other public cannabis companies that use these PR companies to attract investors your article is worthless. They all do it. Stop pretending there’s anything to write about here.

    Reply
  5. Frank Crocetti on

    I believe theres lots of shady stuff going on throughout this new industry and people who are usually very Good people are seeing ways to do illegal activities to boost there bank accounts at the cost of shareholders ! By no means am i saying or implying MedMen did this but be careful people theres tons of Crooks waiting to pray on the average investor with promises of Great profits lol that only that particular company will benefit from ,meaning any company decisiving Shareholders ! Yes i know thats the Stock Market in general but especially right now in the Cannabis sector ! And yes i do invest in Cannabis, im not a hater of these Companys or stocks before anyone trys saying it !

    Reply
  6. Donald Vandermaelen on

    I’m an average investor, in the morning the MedMen stock drops then bounces around new disappointing lows. Is this normal? The company seems good

    Reply
  7. LARS B NYSTROMER on

    Full honest teamwork amongst all management ,salespeople and all employees is necessary for total success of company. I hope MED MEN will follow the honest system! Good Luck! From 85 years old retired stockholder

    Reply
    • Shana Williams on

      Amen to that LBN. I am an average investor who sunk a relative chunk into Medmen, and am trying to hold on despite over a grand lost so far. Medmen, you owe your people an honest, clean company worth maintaining investment. We can only hold on so long no matter how good you looked.

      Reply
  8. Gary Hanson on

    Two things stand out from the recent conference call that bother me as an investor in Medmen, one is the fact that New York appears to be no friend to Medmen and of the 10 licenses in New York, Medmen and PharmaCann merger would give the combined companies two of them. Will the merger be met with opposition from New York because of this. Second is the forming of a Union by its workers. Being a union member I do know a little about Collective Bargaining, but I don’t understand how it would work when the company your negotiating with is losing money. It also looks like they have to many people on the payroll, they started to trim the upper management but looks like top to bottom needs to be addressed. As an investor I don’t want to see the Apple store experience of cannabis turn into the Whole Foods experience. They let their idealistic ideas of how to handle Labor Costs get away from them and look what happened there.

    Reply
    • Pat on

      Unions don’t belong in the cannabis space, yet. The Gov. is too corrupt in the promulgation and implementation of its laws.

      Reply

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