Over the last six months, MedMen has been in the news for all the wrong reasons.
On January 12, MedMen’s stock hit zero, a massive collapse for a company once valued at nearly $3 billion. That news, predictably, was followed by the CEO’s departure, the fourth time in as many years that position has been vacated. The closure of stylish retail stores in California triggered a wave of nostalgia and schadenfreude.
In April, the company filed for bankruptcy, taking with it more than $550 million in debt — money seemingly owed to every company, investor and tax agency that has ever come in contact with MedMen.
To be clear, “all the wrong reasons” have been common story lines for the once-upon-a-time hottest stock in the cannabis space. The company’s recent past is littered with lawsuits, executive turnover, revamped business models and the offloading of ill-advised acquisitions and expansions. And that’s without getting into the salacious details of how the company’s founders nearly sunk the multi-state operator through their greed, hubris and a litany of bad business decisions. Allegedly.
It’s almost difficult to remember that time when MedMen was anything but a “troubled” cannabis company, as the utter failures over the past five years have made many people forget MedMen the trailblazer, the trendsetter, the unicorn.
MedMen was the best of times, and MedMen was the worst of times.
It’s a company that’s easy to criticize, especially from afar. Numerous aspirational expansions, including Florida and New York well in advance of adult-use legalization, seemed to be based completely on false expectations. The publication of Ember, a printed, national cannabis magazine — distributed even in states where MedMen didn’t have a footprint — was another aspirational move with little payoff.
Even the name itself is problematic, a nod to the misogyny with which this industry continues to maintain an uneasy friendship.
MedMen was one of the early cannabis companies to target the high-end aesthetic, but the graveyards of dispensaries gone by are littered with shops attempting to conflate buying weed with a luxurious, jewelry-shopping experience.
The idea that MedMen would build out “state-of-the-art” cultivation facilities and leverage vertical integration for profitability also seemed poorly thought-out. So much money wasted trying to be the Coca-Cola of Cannabis, while also trying really hard to be the Apple Store of Cannabis. It’s a topic we at Marijuana Venture have often written about, and still believe: vertical integration is probably not the best business model for most cannabis companies. But this industry has always had a mentality of keeping up with the Joneses — and, when possible, blowing right past them while ignoring the speed limit. MedMen is far from the only company to over-leverage itself with new markets and the allure of dominating the entire supply chain; many other companies have built classic “buggy-before-the-horse” businesses and eventually liquidated their driverless buggies in places like Iowa, North Dakota and Utah.
And speaking of Joneses — or in this case Jonzes — the Spike Jonze ad was as groundbreaking as it was pointless. It was exactly the type of big swing the legalization movement needs, a defining message, mixed with the right amount of star power and panache. But in retrospect, it looks like a vanity project in light of the company’s decline.
It seemed everything MedMen did had a yin and yang quality about it. There’s no arguing that the company brought in talented people, especially in the branding and marketing aspects, to help fuel its rapid rise. In a rocking sea of green, the color red became linked to MedMen the same way it was connected with Netflix, Ferrari and — I hate to say it — Donald Trump.
Many former employees have waxed poetically about their time with the company, pining for those days of relentless creativity, the feeling of being a trailblazer in a smoking-hot industry — and essentially being a big reason for the smoking-hot temperature of the industry. Many of those people have gone on to do exciting things at other cannabis companies. They broke the mold and helped redefine what a cannabis company could represent — despite being clearly strapped to a broken decision-making apparatus, an enterprise that seemed, almost by design, set up solely to enrich its founders. Whoever came up with the phrase “HIPPO problem” — highest paid person’s opinion — may have been sitting in on a MedMen staff meeting. It’s sort of a shame we’re talking about the company leadership at this point, and not highlighting the incredible work of staff who genuinely helped advance the cannabis conversation.
Whether MedMen survives this current run of challenges remains to be seen. Apparently, the company reopened its temporarily shuttered shop in West Hollywood, but prospects in other markets seem more dire. If you’re a landlord, cannabis vendor or former employee who still hasn’t been paid, get in line.
“For the last two months we have had less than 20 products on our menu,” one anonymous employee told MJBizDaily. “I’m talking no edibles, no flower, no vapes, no lighters. They owe every brand in Illinois money.”
It’s exactly this type of company that is wrecking small producers throughout the United States, and exactly the type of company that is, in many ways, ruining this industry.
Long live MedMen, and good riddance.