It is quite clear that the past few months have not been particularly great for cannabis company MedMen Enterprises (CSE:MMEN) (OTCQX:MMNFF). While it is true that the cannabis sector went through a slump, the issues at MedMen have involved more than just that. Last week, MedMen stock got a boost after the company's Chief Executive Officer and co-founder, Adam Bierman, decided to step down from his position. However, the rally was short-lived, and now the stock is trading below where it was before the announcement.
Now it is important to take a closer look at MedMen stock to figure out if the bullish trend will come back.
What's Going On?
MedMen stock has crashed by as much as 88% over the past 12 months. The company has managed to boost sales at its sleek Apple-inspired stores, but MedMen Enterprises has struggled to control its losses. The primary reason for that is its escalating cost; in the latest quarter, it spent as much as $44 million.
The company’s former Chief Financial Officer had also filed a lawsuit against MedMen. In the lawsuit, it has been indicated that the company and its management were wasteful with money.
>> Cresco Labs Stock Drops Despite Completing Hope Heal Health Deal
MedMen stock is down by over 3% at $0.48 in Tuesday's trading session.
The stock rally after the announcement suggests that shareholders did not think too highly of the company’s CEO. MedMen Enterprises has not yet named a replacement, but it has said that the next CEO could be an external candidate.
If a member of the current MedMen executive team is made the CEO, it might not bring about the change many are hoping for, and MedMen stock could go on a downward slope again.
It is important to note that there are a lot of risks associated with MedMen Enterprises at this point, and any new CEO would need some time before they can start turning the company’s fortunes around. Experts believe that investors could look elsewhere in the meantime until there is any significant improvement in MedMen’s fortunes.
Featured image: Canva
