MedMen Stock Hovers Around New Lows: Reason to Worry?

MedMen stock

The difficulties faced by the cannabis sector for most of the year so far are well documented, and many of the best-known companies in the industry have seen their stock prices plunge from lofty heights. The situation has been the same for MedMen Enterprises (CSE:MMEN) (OTCQX:MMNFF), and MedMen stock has actually performed worse than many other cannabis stocks—but why?

Continuous Sell-Off

In 12 months, MedMen stock has lost as much as 75% of its value. The shares have started sliding again and recently touched a 52-week low. Considering the fact that the company has an extensive operation in high-class cannabis, it is important to consider whether or not this is now an opportunity.

Although it is true that the cannabis industry has been in the middle of a slowdown, many of the issues facing MedMen Enterprises are not related to industry-wide problems. Earlier in 2019, it was reported that James Parker, the former CFO at MedMen, was suing the company for irresponsible spending.

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While it is true that the cannabis industry can be capital intensive, MedMen burned through as much as $184 million in a matter of nine months until March 2019. On the other hand, several key executives have left the company, which has further puts pressure on MedMen stock.

While Parker sued the company, MedMen Enterprises also announced that his replacement Michael Kramer was also going to step down from his position. The abandonment of the merger with PharmaCann has also come as a shock for those interested in MedMen. All put together, the company appears to be in the doldrums at the moment.

In such a situation, it is hard to justify an investment in MedMen stock, and at the end of the day, investing in a company in turmoil is something most investors generally avoid. That being said, MedMen Enterprises could recover as well and eventually return the trust of its investors.

>> Read More MedMen News

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