MedMen stock (OTCQX:MMNFF)(CSE:MMEN) has been a rather controversial play for investors. The company is loud, its US expansion plans aggressive and its sales huge. It employs Spike Jonze to make its advertising for example, what does that say?
But behind the bravado, there has been a crisis at head office which has greatly affected investors. Currently, shares are selling for $2.46 USD on the OTC, down 1.2%.
Let's check this out.
MedMen Stock - Operational Prowess
MedMen is moving. It has 18 dispensaries across the US that serve both recreational and medical customers in Arizona, California, Illinois, Nevada, and New York. Business has been booming, so much so, that its Apple-inspired stores are actually besting Apple (NASDAQ:AAPL) in terms of sales per square foot.
Confident in its operational prowess, MedMen has even started its own cannabis magazine called EMBER.
Further, it recently introduced a new private-label line called Statemade.
The persona MedMen radiates is hip, cool and "in". If it were a coffee shop, it would have old shoes nailed to the wall, filament lightbulbs and school benches for chairs. Your barista would have a top-knot.
MedMen Stock - Where's The Profit?
But the underneath exterior tells a different story. According to the Motely Fool, the company is massively unprofitable and is diluting shareholders in order to fund its aggressive US expansion. Down the line, there is, of course, the upside potential to all this, but for now, there is a lot of risk.
Further, the company has been in the throes of three separate lawsuits that all claim similar things —management is unethical, overspending and immoral.
Disgruntled ex-employees will say the darnedest things and whether or not there is truth in the claims is one thing, but the lawsuits themselves are enough to shake MedMen stock. Shares have lost nearly 30% since the beginning of 2019.
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The Take-Away
The problem for MedMen stock investors is trust. It's very hard to know why the company is really "losing about $60 million every single quarter as it "invests" in growth". Lawsuits and claims will always plant a seed of doubt.
The company has taken on an unpredictable and very new industry with gusto and then some. But it's already showing head-office lawsuits, diluted shares, and a lack of profitability. This makes for a headache and is that necessary right now?
What do you think? Are you a MedMen stock investor?
Featured Image: Canva
