MEDMEN STOCK IS “CHEAP:” CEO

Adam Bierman, CEO of California-based MSO MedMen, made the case for the retailer’s value amid confirmed reports that the company has offered to pay some suppliers in MedMen stock.
MarketWatch

In an interview with Green Market Report and in an Ask Me Anything on Reddit, Bierman argued the company’s stock is “cheap… versus where it will be as we execute.” He said MedMen’s assets include its $1 billion in license value– more than 10 times its current market capitalization– national footprint and desirable store locations in New York, California and Las Vegas.

Ganjapreneur writes up key points from the Ask Me Anything and says Bierman answered some, but not all, of the tougher questions. (You can see comments that were deleted and removed here.)

  • In an email obtained by MarketWatch, MedMen offered a supplier three options: 1) The full amount owed in non-voting stock, 2) A payment plan for the full amount or 3) A cash payment for half the amount owed.
  • On Sunday MedMen stock was worth 44 cents per share, down from $6.49 in October 2018 and 64 cents on January 17. The company’s current market cap is $92.6M according to Yahoo Finance.
  • In a separate story, Green Market Report notes the company had $671M in total liabilities in September, and $43.9M in revenue for the quarter ending that month. Report called it “a fairly lopsided situation.”
  • In an interview with Green Market Report, CEO Bierman said “our cash position is very healthy, our balance sheet is strong.”
  • This comes after MedMen renegotiated terms with Gotham Green Partners and at least one other backer last year. Bierman said the restructuring will probably be done in a month. (Gotham Green Partners has close ties to Canadian cannabis company Cronos Group.)
  • The restructuring has involved substantial layoffs and forced the company to exit Arizona.
  • Bierman said MedMen is working with restructuring firm FTI Consulting to get its finances in order.

Key moments from the Reddit AMA:

  • Bierman said he bought 1M shares of MedMen stock in December and January and has never personally sold a share of MedMen stock. “I am all in on this company.” Bierman has been criticized for paying himself lavishly, but is now receiving a salary of $50,000.
  • “No amount of money could secure the [store] locations we have today. “
  • “I regret not implementing this cost cutting sooner,” Bierman wrote.

Financial site Grizzle has a more bearish view and discusses what to do if MedMen owes you money.

 

Quick Hits

  1. MedMen competitors CuraLeaf and Cresco Labs have recently closed on $300M and $200M in debt financing, respectively.
    MJBiz
  1. U.S. marijuana companies are not eligible for bankruptcy protection. In December, National Law Review discusses this thorny issue.
  2. “Bargain hunters” have pushed up the value of some Canadian pot stocks.
    Reuters

“THE MAN” NOW SELLS ACID

A Canadian company called Microdelics is selling what it says is the world’s first kit for microdosing LSD. They start at C$50.
Double Blind

  • The kits come with “a little blue bottle containing 100 micrograms of 1P-LSD “a derivative and functional analogue of LSD.”
  • “ 1-propionyl lysergic acid diethylamide, or 1P-LSD, is structurally similar, but not identical, to the original molecule. While the exact mechanisms of its action are not yet understood, it’s possible that 1P-LSD is a “prodrug” of LSD—meaning that it could convert to LSD in the body.”
  • “Because of its subtle molecular differences, 1P-LSD bypasses prohibition in places like Canada, occupying a kind of legal grey area where regular LSD may otherwise be illegal.”

Quick Hit

  1. Seventy three year old actor Brian Cox, has been dumped as the patron of an elderly center in Scotland after he said getting high is “wonderful.“
    The Mirror

YET ANOTHER MARIJUANA CONSPIRACY

A new movie called The Marijuana Conspiracy looks at a bizarre 1972 experiment wherein a group of young Canadian women were locked in a ward for several months and given lots of weed to smoke. Here’s a fascinating Toronto Star story about the experiment. Its results have never been disclosed.

Quick Hit

  1. Alcohol prohibition began a century ago. This essay in the New York Times argues prohibition supporters had more problems with the alcohol industry’s greed than with alcohol itself.

NJ JUDGE APPROVES EMPLOYEE MED COSTS

In a case which could have nationwide implications, a New Jersey judge ruled that a construction company must reimburse a former employee for his MED.
Philadelphia Inquirer

  • Vincent Hager was a 28-year old laborer in 2001 when a truck dropped a load of concrete on him.
  • Severely injured, Hager later used MED to successfully get off opiates.
  • The former employer was overruled in its appeal that paying for Hager’s MED was illegal under the Controlled Substances Act.
  • It is the first time a reimbursement case has been tied to marijuana’s federal illegality and the ruling was that state law prevailed.

IS HEMP FINALLY SEXY?

After officially being legalized in the 2018 farm bill, industrial hemp has suffered various, predictable growing pains. But a few recent developments suggest the industry may be about to gain traction.

FLORIDA WON’T VOTE ON REC IN 2020

Make It Legal Florida, a well-financed campaign to get REC on the state ballot, said it would shift its focus to the 2022 ballot, due to a rule limiting its time to collect signatures.
Tampa Bay Times

  • The hundreds of thousands of signatures it has collected can be applied to the 2022 initiative.
  • Legalization activists have traditionally favored presidential election years for REC ballot initiatives because they generate larger and younger voter turnout.

In other state legalization news…

BABY STEPS IN D.C.

The House Committee on Energy and Commerce held its first ever hearing on cannabis legalization.

  • The hearing revolved around MED and impediments to future research.
  • No one from the industry was invited to testify, but the National Cannabis Industry Association (NCIA) submitted a letter.

Elsewhere in D.C., the American Bankers Association called on Senate Banking Committee Chair Mike Crapo (R-Id.) to pass a cannabis banking bill.

Quick Hits

  1. Senator and presidential candidate Bernie Sanders (I-Vt.) tweeted his support for workers unionizing at a Cresco Labs facility in Illinois.
    Marijuana Moment
  2. In a first, The New York Times editorial board endorsed two candidates for president, Senators Elizabeth Warren (D-Mass.) and Amy Klobuchar (D-Minn.) Both support REC legalization. Elizabeth Warren has co-sponsored a bipartisan bill to protect REC states. Kobuchar supports legalization but barely discusses it.
    Canna Law Blog

IS THE RECOVERY HERE?

Though some companies are clearly still struggling, there are also signs of a nascent recovery.

Business Insider put together a list of 14 top cannabis venture capital firms.

Quick Hits

  1. Grupo Flor Chairman Gavin Kogan writes that it’s time to recognize cannabis as a valid business career.
    Green Entrepreneur
  2. Marketing tech company Fyllo acquired legal subscription service CannaRegs for $10M in cash and stock.
    TechCrunch