MedMen stock is continuing to slide today after it was reported that MedMen Enterprises (CSE:MMEN) (OTCQX:MMNFF) had squared up C$3.3 million in vendor debt with the issuance of Class B subordinate voting shares. The California-based cannabis producer has been in disarray for much of the year so far, following months of speculation about the company's financial health. Bankruptcy rumors began circulating on social media in mid-January after reports emerged that the company was offering vendors MedMen stock options as a means of payment.
Bierman Quits
Now-departed CEO Adam Bierman attempted to quash investors' concerns by saying the company was simply in a restructuring period and that such payments were common practice in the situation. Bierman then took to Reddit to further address investors' questions; however, most were left even more frustrated by the Ask Me Anything (AMA) after the ex-CEO dodged questions on the vendor payment crisis. Bierman would quit as CEO just three days later as MedMen stock continued to slide towards new lows.
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MedMen Stock Issuance
After emails leaked on social media appeared to show that the company was indeed making payments with stock options, this position was then verified by Chief Financial Officer Zeeshan Hyder. Now, new filings with the Canadian Securities Exchange show that MedMen Enterprises issued a total of 6,148,641 shares over a period of one week to settle outstanding debts with a number of vendors located across Canada and the United States, with the dilution of MedMen stock picking up pace.
The first share issuance took place on January 31 to vendors in California and Nevada at $0.549 per unit for a total of $1.5 million. The filing states that the issuance was made to “various vendor contracts for delivery of goods and services to the company.” The second issuance took place on February 7 and saw an additional $1.7 million worth of debt settled with a total of six vendors in California, Vancouver, and Toronto at a price of $0.542 per unit.
MedMen stock is down over 30% since the first issuance was made and now trades for just $0.40.
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