MedMen stock has been rocked in February. Two days ago, shares fell 6% as the NYMCIA (New York Medical Cannabis Industry Association) announced it is terminating its association with the cannabis company.
But why does it want MedMen Enterprises (CSE:MMEN) (OTCQX:MMNFF) out? It comes down to a legal dispute between MedMen’s former CFO and current CEO.
Two weeks ago, former MedMen CFO, James Parker, filed a lawsuit in the Los Angeles Supreme Court.
According to MarketWatch, he is suing MedMen Enterprises for breaching his contract and wrongful termination. His claim alleges that CEO Adam Bierman also committed financial irregularities and he had to turn “a blind eye and a deaf ear to improper and unlawful behavior.”
The lawsuit also alleges that Bierman used a racial slur against a Los Angeles city councilman.
Adam Bierman Fights Back
Yesterday, Adam Bierman issued a statement defending himself against the allegations. He stated to MarketWatch that Parker “filed a baseless, wrongful termination lawsuit for his financial gain. We will vigorously defend ourselves in court.”
MedMen Stock Drop
The dispute will no doubt be ongoing for some time, and investors are obviously not happy as MedMen stock has dropped. At its height (on January 28th), shares were selling for $4.79 CAD, however, the day the lawsuit was filed, shares began to fall. They haven’t stopped since, and now, NYMCIA’s recent announcement has been the biggest stock kicker thus far.
Currently, MMEN stock is selling for $3.82 and up 0.5% on the CSE.
NYMCIA has cut ties with MedMen off the back of the legal dispute, which is bad news for investors. The association confirmed the break in the Daily News.
MedMen’s response is that it still “supports the collective cause of the licensed registered organizations in New York […] We will remain active in conversations about the full legalization of cannabis. This is an important discussion and we will continue to take part.”
Do you think NYMCIA made the right decision amidst MedMen’s legal drama?
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