REUTERS/Mike Segar
Staff members work inside MedMen, a California-based cannabis company store serving medical prescription patients with cannabis products, on the store's opening day on 5th Avenue in Manhattan in New York City.
- MedMen terminated 128 employees and made 15 new hires in February, for a net loss of 113 jobs, per a securities filing reviewed by Business Insider.
- MedMen cut 40% of its corporate workforce in November and December, and CEO Adam Bierman stepped down on February 1.
- The layoffs come amid a months-long turnaround plan for the embattled cannabis retailer, which has been hit with a wave of setbacks over the past year - much like the broader cannabis industry.
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Embattled California cannabis retailer MedMen terminated 128 employees in February, according to a Canadian Securities Exchange filing reviewed by Business Insider.
MedMen also made 15 new hires during February, for a total loss of 113 jobs, the filing shows.
The layoffs come amid a months-long restructuring plan put into place by the company's board and former CEO Adam Bierman. MedMen has engaged a turnaround firm, FTI Consulting, to assist with the process.
MedMen's stock - like many of its peers in the cannabis industry - has been punished by investors. On Wednesday morning, the stock was trading at 17 cents per share, down from more than $3 a year ago.
The company didn't respond to messages seeking comment.
Bierman stepped down and surrendered his Class A super-voting shares February 1. Ryan Lissack, MedMen's chief operating officer, took over as interim CEO while the board searches for a permanent replacement.
Andrew Modlin, MedMen's president and cofounder, surrendered his super-voting shares in December.
"With the markets collapsing, and investors wanting to see different types of results from these companies, we're probably six months behind repositioning the business," Bierman told Business Insider in a January interview. "As a result, our stock price has been punished. I think that it was on us to enter into the restructuring; it was on us to execute our way through the restructuring."
Downbeat earnings, and a decline in cash
MedMen posted downbeat earnings in February, reporting $44.1 million in revenue and missing the lowest analyst estimate by almost $4 million. The company lost $35.1 million as measured by Ebitda.
The company said it had cash and cash equivalents at the end of its second fiscal quarter of 2020 valued at $26 million, down from $33.8 million as of mid-2019.
In a call with investors and analysts, Lissack said the company would continue aggressive cost-cutting, and would focus on operating its branded retail stores while shutting down the company's Arizona operations, including cultivation and manufacturing facilities as well as three retail stores.
"MedMen's last chapter was about pursuing growth," Lissack said. " This is a pivotal time for the company, where we can reassess the business."
The February layoffs are the latest in a long line of setbacks for the once high-flying cannabis retailer.
In February, former CFO James Parker filed a wrongful-dismissal suit, alleging there was rampant spending and an unhealthy work environment within the company. The company laid off about 40% of its corporate workforce in November and December in a push to be cash-flow positive by the end of 2020. A planned $680 million all-stock acquisition of the Illinois cannabis company PharmaCann was terminated in October.
And a parade of senior execs left the company in recent months, including David Dancer, the company's former chief marketing officer, Ben Cook, the company's former COO, among others.
- Read more:
- Cannabis retailer MedMen just posted downbeat earnings, and the new CEO said selling factories and shuttering stores might help turn things around
- The CEO of embattled cannabis company MedMen is stepping down on February 1
- The CEO of troubled cannabis company MedMen told us investors were right to punish his stock. Now he says they'd be smart to bet on a turnaround.
- Layoffs, cratering stocks, and blown-up deals: 11 experts take us inside the cannabis industry's meltdown and tell us where the industry goes from here
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