MedMen stock is continuing to sink today as the vendor payment crisis engulfing the embattled pot producer took an unusual turn on Friday after MedMen Enterprises (CSE:MMEN) (OTCQX:MMNFF) CEO Adam Bierman took to Reddit to address those concerns.
MedMen on the Verge?
While MedMen's financial position has been under the spotlight for a number of months, particularly following the announcement of 190 layoffs in December and several new waves of financing, those concerns reached a crescendo just over a week ago. Emails leaked on social media, which were later verified by CFO Zeeshan Hyder, showed that MedMen Enterprises was offering vendors MedMen stock options as a means of payment, further amplifying fears that the firm was on the verge of bankruptcy.
On Friday, MedMen CEO Adam Bierman responded to those fear in an interview with Green Market Report, in which he said that the company was simply in a restructuring period and that payment by way of stock was common practice in such a situation. However, that interview did little to help the situation and only sent MedMen stock tumbling further. So, Bierman decided to take to Reddit in the form of an Ask Me Anything (AMA) to further diffuse the crisis.
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AMA Fails to Revive MedMen Stock
An AMA is an open forum format that allows for an interview from the public directly to an individual or company and appeared a brave move for Bierman, given the openness and transparency of this type of interaction. While MedMen's CEO did respond to some challenging questions, particularly those regarding his salary and bonuses, most were left disappointed and frustrated as he dodged numerous poignant questions and appeared to deflect a great deal in those he responded to. MedMen stock has dropped a further 8.5% on Monday morning.
One question avoided multiple times by Bierman was, "Do you think MedMen pushed too hard in getting Florida stores online?" MedMen Enterprises spent millions of dollars on sponsoring the Florida legalization ballot initiative, and opened a host of new medical dispensaries in the Sunshine State, only for the Make It Legal Florida campaign to fail to reach the required number of signatures. The possibility of a wasted investment in Florida appears to be just one of several poor judgment calls from the firm, which have landed it in such a precarious position.
MedMen stock is currently trading for $0.54, having traded for as much as $4.79 a year ago.
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