Former CFO James Parker has hit cannabis retail outfit MedMen Enterprises (CSE:MMEN) (OTCQX:MMNFF) with two more “causes of action” claims. MedMen stock is declining in recent days, dropping from over $3 USD to approximately $2.68 on the OTC.
With this lawsuit growing, investors have to wonder whether or not shares will be greatly affected in the near-term.
MedMen Stock: The Claim
As stated, former Chief Financial Officer James Parker has added two more “causes of action” to the breach of contract lawsuit that he filed back in January.
So what is he claiming?
Parker claims that he is entitled to additional compensation. He claims to have been guaranteed 4.2 million “full value long-term incentive plan units” or equity grants in the company. These would’ve garnered interest over time. Parker alleges he was promised a total of $17.5 million but was denied this due to being terminated in November. Further, he says that MedMen Enterprises illegally converted many of the incentive-plan units into stock and is now refusing to return the shares.
The second claim is more damaging, and alleges that CEO Adam Bierman, President Andrew Modlin, and Chairman of the Board, Ben Rose, engaged in stock manipulation, which led to them pocketing “millions of additional dollars.”
In a response to Marijuana Business Daily, MedMen said the following:
“As we’ve said in the past, this is a baseless lawsuit for Parker’s financial gain, and we will continue to vigorously defend ourselves in court. We will not be distracted by these meritless allegations.”
As the company continues to defend itself from a complicated lawsuit, will MedMen stock suffer? The negative allegations may be concerning to some, but MedMen Enterprises offers a potential growth opportunity that’s hard to ignore. As a vertically integrated firm, it handles all its operations from upstream production operation, down to extraction, branding, and distribution. With the entire supply chain under its own control, MedMen stock is afforded “generous margin-expansion possibilities.”
With a low valuation of $2.68 USD on the OTC and its earnings report on the horizon, keep an eye on MedMen stock.
Featured Image: Canva