Major cannabis firm MedMen slashes more than 190 jobs, unloads assets to bolster bottom line

medmen, Major cannabis firm MedMen slashes more than 190 jobs, unloads assets to bolster bottom line

MedMen's retail store in Venice, California. (Photo by Lindsey Bartlett)

MedMen, a Los Angeles-based multistate marijuana operator, announced it is laying off more than 190 employees to shore up its bottom line, joining a growing list of cannabis companies shedding workers amid falling MJ stock prices and a dearth of outside funding.

The cash-strapped, vertically integrated company also disclosed plans to scale back its store openings next year and delay investments in certain markets, including New York and Arizona.

MedMen also is exploring the sale of “certain operations and licenses in states that are currently deemed not critical to the company’s retail footprint.”

In a news release Friday, MedMen said the layoffs include more than 80 corporate-level staffers, amounting to more than 20% of its corporate workforce.

As of Oct. 28, MedMen had more the 1,300 employees, with half of those in retail. The company expects to save approximately $10 million through the head-count reduction, and it signaled that more job cuts are likely on the horizon.

In announcing the layoffs, MedMen joins several other cannabis companies in slashing its workforce, including Weedmaps, Pax Labs and Eaze.

“We find ourselves in the exact same spot as all of the other competitors across the industry, where nobody’s fully funded because everybody’s been living in this high-growth phase,” Adam Bierman, MedMen co-founder and chief executive officer, told Bloomberg. “That’s why we’re taking such dramatic measures.”

As part of its plans to slash costs, the company said it will:

  • Sell off its interest in the cannabis-focused Treehouse REIT for total net proceeds of $14 million.
  • Back out of “minority” investments in “high-growth brands,” netting the company $8 million.
  • Limit new store openings in 2020 to those with revenue potential of more than $10 million within the first year of being operational.
  • Divest licenses in “noncore markets.” MedMen said it has hired Canaccord Genuity Corp. to “explore strategic alternatives” for those operations and licenses.
  • Continue to focus its business efforts on Chicago, Las Vegas, Los Angeles, Miami and New York City.

The announcement follows last month’s disclosure by MedMen it was terminating its blockbuster acquisition of PharmaCann.

“We have a clear plan to increase our market share, while at the same time enhancing our margins and reducing our corporate overhead,” Bierman said in the news release.

MedMen’s announcement Friday also indicated the company plans to take additional cost-cutting steps.

“It seems there will be more layoffs, and a new share-based incentive bonus plan may mean reduced base pay for remaining employees,”  said Mike Regan, equity analyst at Marijuana Business Daily‘s Investor Intelligence.

“Of the $85 million in planned corporate expense savings, the specified cuts add only up to $32 million, so the source of $53 million in savings remains to be seen.”

The news release noted that the company “will continue to eliminate layers within the organization” to create greater efficiency, and that certain functions that previously existed across multiple states will be “consolidated into a centralized function.”

Bart Schaneman can be reached at [email protected]

4 comments on “Major cannabis firm MedMen slashes more than 190 jobs, unloads assets to bolster bottom line
  1. demitri downing on

    I was a prosecutor before I started in the cannabis industry in 2012. While I was focused mostly on domestic violence and other crimes I was aware of the other types of crimes being committed regularly by our fellow citizens. I now know through years of reflection that of the real focus of law enforcement and our investigation should have been more geared towards corruption, false schemes and artifices as well as other white collar crime instead of marijuana, maybe our society would be more evolved than we currently are? I am not suggesting anything was amiss here but as investors start to sue about some of these Canadian companies activities, and they will, I bet their might be more than one whose activities , depending on motivation and intent , end up in criminal court. That is what happens when you focus on the money/finance aspect of a business and not the value of the service or good you are creating! More to come…… ( The drug war set is back in more ways than one.)

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