Cannabis firm MedMen announced Wednesday its fifth CEO since 2020 with the appointment of Ellen Deutsch, who will be tasked with turning around the once-industry-leading company that now stands on the verge of a financial collapse fueled by high debt.
Deutsch’s appointment is effective immediately, with former CEO and board chairman Michael Serruya saying Deutsch will oversee a restructuring plan that will bring it “into a new phase of growth,” though no specific growth strategies were shared in the announcement of her appointment.
In February, a regulatory filing revealed MedMen—which in 2018 became the first marijuana company to achieve a $1 billion valuation—had $137.4 million in debt and just $15.6 million in cash remaining on hand.
The filing also showed the company had already defaulted on some of its debt.
Interim CEO Edward Record will step down from his position and continue as a non-executive board member.
More than $1 billion. That was the valuation of MedMen in 2018, when it qualified as a “unicorn” company and was likened to the “Apple store of weed.”
Deutsch, who most recently served as the COO of cannabis company Stem Holdings, has a large responsibility as she becomes MedMen’s fifth full-time CEO in three years. The revolving door at the company’s chief executive position started after its co-founder, Adam Bierman, exited the role in January 2020. Bierman, who founded the company in 2010, departed after MedMen had burned through a significant amount of its cash and its stock dropped nearly 90%. Bierman was also hit with a lawsuit from one of the company’s former CFOs in 2019 that alleged MedMen had a hostile work environment and that company funds were used for excessive personal spending. The ex-CFO, James Parker, claimed in his suit that he was retaliated against for telling “the CEO and president what they were doing was not allowed and that [MedMen]
was not their personal piggy bank.” The Los Angeles company has since shuffled through several executives and faced multiple lawsuits.
MedMen is one of several cannabis retailers that has felt the pressure of several problems that have impacted the cannabis industry for several years, despite widespread legalization efforts making recreational marijuana now legal in 23 states. For example, a 2022 analysis from Green Market Report found that the overall debt carried by cannabis operators was reportedly more than $600 million. In California, which legalized the recreational use of cannabis in 2016, tight regulations and high taxes have hindered the profit-making abilities of MedMen and other firms like it. The illegal cannabis market has also proved to be a problem for retailers, maintaining steady flows of business in states like California, New York, Colorado and Michigan—with the former two states suffering the most from business lost to the unregulated cannabis market.
Cannabis chain once worth $1.7 billion and called the ‘Apple store of weed’ is now nearly failing as the once-hot pot industry faces a major reckoning (Fortune)
How To Ride A Marijuana Unicorn: An Interview With MedMen Spokesman Daniel Yi (Forbes)