MedMen (CSE:MMEN) stock jumped around last week in a punishing seven days for the stock. On Friday, the US-based marijuana company announced that it had reduced a funding round by almost half, amid the CFO's resignation.
MedMen Stock: Reduced Funding Round
In a double whammy on Friday, the company's CFO James Parker quit, at the same time the company said it would be cutting its latest round of financing by 40% to $75 million from $120 million.
Previously, MedMen Enterprises announced a $120 million financing round on November 9th. Now CEO Adam Bierman has said the financing change was due to a “global market selloff.” He made no mention of Parker's departure.
He explained the company's reasoning:
"Shortly after the announcement, the global market experienced a significant sell off and as we ended last week the investors that bought that deal would have been underwater. That did not sit right with us and, accordingly, we initiated a discussion with Canaccord about repricing the deal to ensure our investors would be buying the deal based on an offering ripe for the returns we constantly seek to create."
MedMed Stock: Tough Times
Not only a funding round reduction but also MedMen said it would be "lowering the price of units to $5.50 from $6.80 and altering the warrants that accompany each unit—the strike price was lowered to $6.87 from $10."
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MedMen stock has lost a whopping 40% since mid-November. On November 7th, the stock was selling for $8.08; however, on Friday last, the stock was valued at $4.94. On Friday, MedMen stock trading was halted by the Canadia Securities Exchange as investors awaited a press release detailing the news. It resumed trading today, but the stock has dropped significantly; no doubt, on the news.
At the time of writing, MMEN stock is trading at $4.67, down 9% on the day.
MedMen Enterprises grows, processes, and sells cannabis, with operations across 12 US states. It cannot trade on any major US exchanges due to the federal law against cannabis in America. As such, it trades on the CSE.
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