MedMen stock is continuing to drop this week despite announcing the departure of controversial CEO Adam Bierman on Friday amid a cash crunch crisis at MedMen Enterprises (CSE:MMEN) (OTCQX:MMNFF).
Early Gains in MedMen Stock Short-Lived
The California-based cannabis producer announced on Friday that its co-founder and CEO Adam Bierman would depart with immediate effect after months of speculation regarding the company's culture and financial health, leading to an initial pop of about 7% in MedMen stock. Bierman will maintain his position on the board and still holds millions of shares in the company. He will also be compensated for his departure, although the exact amount remains unclear.
Those early gains in MedMen stock following Bierman's departure were short-lived, as it retreated back around 10% during the first half of this week. The former CEO will also return all of his super-voting shares to the company, which was a much-criticized component of its ownership structure as it placed the majority of the power into the hands of the company's two co-founders, Bierman and Andrew Modlin. Modlin has also agreed to return his super-voting shares, although this will not happen until after December of this year.
>> KERN Stock Jumps After Announcing Deal with PAX Labs
MedMen Enterprises Remains Clouded in Controversy
The circumstances around Bierman's departure have likely not given investors as much closure on the matter as they would have liked, leading to a decline in MedMen stock this week. Until Modlin's shares are surrendered in December, Ben Rose, MedMen's executive chairman, will have proxy over them. This has created some controversy, as Rose is also Chief Investment Officer of Wicklow Capital, which has provided MedMen Enterprises with financing in the recent past, essentially handing control of the company to the investment firm until the end of the year.
Ryan Lissack, the company's Chief Operating Officer and Chief Technology Officer, will step in as interim CEO, and he faces a mammoth challenge on his hands to rectify the vendor payment crisis and improve the company's reputation. MedMen's balance sheet remains in dire straits, and its standing among the public, suppliers, and its investors looks irreparably damaged.
MedMen stock is currently trading for just $0.52.
Featured Image: Canva
