The co-founders of Los Angeles-based cannabis retailer MedMen are no longer formally involved with dispensary chain after vacating their board positions, the company announced Wednesday.
In a news release, MedMen said co-founder and former CEO Adam Bierman had resigned from the board of directors. His partner and former president Andrew Modlin has also stepped down as a board observer.
Recall that Bierman stepped down as CEO at the end of January, at the time relinquishing all of his class A super voting shares. One month earlier, Modlin surrendered his class A super voting shares and granted a limited proxy to board chair Ben Rose.
Nevertheless, the two cannabis executives, who launched the business in 2010, each held approximately 5% ownership in the company as of January 31, 2020.
As part of the settlement, MedMen has issued 24 million class B subordinate voting shares to claimants, including 1.5 million shares that will go to an entity owned by shareholders Brent Cox and Omar Mangalji of The Inception Companies.
Today’s news comes after a tumultuous few months for the beleaguered multistate marijuana firm.
Several of the company’s dispensaries were recently robbed during protests over the death of George Floyd, forcing the company to temporarily shutter all of its locations across the country.
At the end of May, the company reported nearly $40 million in net losses during its 2020 fiscal third quarter.
MedMen also faced scrutiny last month from mainstream media outlets who chronicled the company’s struggles to become the “Apple of Pot” over the last decade, and criticized the bombastic Bierman for paying himself millions of dollars before the company was profitable.
Earlier this year, reports circulated that MedMen was struggling to pay vendors and offering stock in exchange for debt forgiveness.
Over the last several months, MedMen has taken drastic steps to improve profitability. It has laid off hundreds of employees, divested assets in Arizona and Illinois, and called off a $682 million acquisition of PharmaCann.
To help right the ship, MedMen appointed SierraConstellation Partners senior managing director Tom Lynch and SierraConstellation director Tim Bossidy as interim CEO and interim COO, respectively, in March.
Also in March, former Whole Foods vice president Errol Schweizer was also appointed to the MedMen board.
Meanwhile, Niki Christoff, who currently serves as senior vice president of strategy and government relations at Salesforce, joined the MedMen board in May.
A news release with additional information is included below.
MedMen Announces Changes to Its Board of Directors and Resolution of MMMG-MC Litigation
LOS ANGELES–(BUSINESS WIRE)–MedMen Enterprises Inc. (“MedMen” or the “Company”) (CSE: MMEN) (OTCQX: MMNFF) today announced that Adam Bierman, Co-Founder, stepped down as a member of the Company’s board of directors. In addition, Andrew Modlin, the Company’s other Co-Founder, stepped down as an observer to the Company’s board of directors. Mr. Modlin’s employment agreement with the Company expired on May 18, 2020.
MedMen also announced today that a settlement has been reached to resolve the litigation between MMMG-MC Inc. (BVI), Brent Cox, Omar Mangalji, et al. (“Claimants”) and various parties, including MedMen. Claimants originally filed suit in Los Angeles Superior Court on January 8, 2019 and subsequently moved the litigation into private arbitration. MedMen and other parties petitioned the Superior Court to compel arbitration on November 11, 2019. MedMen issued 1.5 million Class B Subordinate Voting Shares to MMMG-MC as a part of the overall 24 million share settlement with Claimants, which included contributions from other parties and allowed the issuance of shares to all MMMG shareholders. Although MedMen denies any wrongdoing, the Company believes its contribution to the settlement is in the best interest of its shareholders. The parties are in the process of dismissing the arbitration and court proceedings as a result of the settlement.
MedMen is North America’s premium cannabis retailer with flagship locations in Los Angeles, Las Vegas, Chicago and New York. Through a robust selection of high-quality products, including MedMen-owned brands [statemade], LuxLyte and MedMen Red, and a team of cannabis-educated associates, MedMen has defined the next generation discovery platform for cannabis and all its benefits. MedMen’s industry-leading technology enables a fully compliant, owned-and-operated delivery service and MedMen Buds, a loyalty program. MedMen believes that a world where cannabis is legal and regulated is safer, healthier and happier. Learn more at www.medmen.com.
SOURCE: MedMen Enterprises
Cautionary Note Regarding Forward-Looking Information and Statements:
This news release contains certain “forward-looking information” within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition but instead represent only MedMen’s beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of MedMen’s control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as “expects,” “believes,” or variations of words and phrases implying that certain actions, events or results “may,” “could,” “would,” “might,” “will be taken,” “will continue,” “will occur” or “will be achieved.” This forward-looking information is based on certain assumptions made by management and other factors used by management in developing such information. The forward-looking information and forward-looking statements contained in this news release are made as of the date of this news release, and MedMen does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws.