The CEO of California cannabis retailer MedMen Enterprises Inc. (MedMen) has stepped down from his position, agreeing to surrender all of his Class A super voting shares back to the company as it proceeds through a restructuring.
On Friday, January 31, 2020, MedMen announced that its co-founder, Adam Bierman, had decided to resign as company CEO, effective February 1.
Bierman is expected to remain a shareholder and a member of Medmen’s board of directors, including as part of the board to be elected at an upcoming shareholder meeting.
Bierman’s compensation will be determined by a special committee of independent directors after MedMen’s February shareholder meeting.
MedMen’s board of directors is currently in the process of assembling a committee of directors that will lead the task of selecting and appointing a new CEO.
In the meantime, the board has named COO and CTO Ryan Lissack as Interim CEO.
“I continue to believe that MedMen is positioned to thrive,” said Bierman in a press release. “It’s time for our next iteration of leadership to capitalize on the opportunity we have created. This has been an incredible journey and I will continue to be inspired by those around the globe working to make our world safer, healthier and happier through access to legal, regulated cannabis.”
Executive Chairman Ben Rose says that the board supports Bierman’s decision to step down to make way for a new CEO to lead the company, as well as his and co-founder Andrew Modlin’s decision to surrender their voting rights to give shareholders a stronger voice.
“This evolution will provide Adam the space to contribute to the future of MedMen and extend his commitment to the industry that he has helped pioneer,” says Rose.
But Bierman’s decision to step away from the CEO position has not come as a surprise to some who cite MedMen’s structure, business practices, management, current financial status, and the state of the California cannabis industry as factors.
Santa Cruz cannabis manufacturer and retailer Bryce Berryessa told Marijuana Business Daily (MBD) that he was unsure about providing MedMen with inventory last year but ultimately decided not to after hearing that other manufacturers hadn’t been paid for up to six months.
Berryessa said that even with the restructuring, it looks as if Bierman is coming out on top and making money while vendors are left hurting.
Siva Enterprises CEO Avis Bulbulyan told MBD that one company nearly brought down the cannabis industry, in regards to momentum and traction, and that missteps by Bierman and his company were often linked to the cannabis industry as a whole, stating that the CEO’s departure makes it more likely that others will be able to repair damage to the industry’s financial image.
As part of a 90-day plan to achieve a positive EBITDA before the end of calendar year 2020, MedMen announced in November that the company would be cutting more than 190 jobs, including 80 corporate positions, then laid off an additional 20 percent of its corporate employees in December.
The plan centered around focusing on core markets, divesting non-core assets, reducing corporate SG&A expenses, driving asset-level EBITDA, limiting cash outlays for one year, and reinvesting MedMen’s employees and culture.
MedMen plans to announce its second-quarter fiscal 2020 financial results when the market closes on Wednesday, February 26, after which the company will discuss the results in further detail with CEO Lissack and CFO Zeeshan Hyder.