MedMen is stripped of its Virginia medical cannabis dispensary license

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Bethan Rose Jenkins, Cannabis News Writer/Editorial

MedMen Enterprises is skating on thin ice, what with the multistate cannabis company suffering blow-after-blow in recent times. According to the latest news, Virginia regulators have voted to revoke the well-known California-headquartered company’s medical cannabis dispensary license in Staunton. 

The news comes as a shock, considering the fact that it has been announced so abruptly following Governor Ralph Northam’s signing of a bill to legalize cannabis in Virginia. Initially, the conditional dispensary license was granted to a vertically-integrated company called PharmaCann, which MedMen intended on merging with in 2019.

MedMen snapped up the conditional license in December of last year for a bargain price of $10 — this price was calculated as part of a settlement when the merger was overthrown by each cannabis company. Unfortunately, the deal’s demise abruptly halted development of the 6.64-acre Staunton location. 

A delayed review and vote assessment that took place on June 12 – instead of March 24 – meant that the facility was not up to the licensing standards required by the Board of Pharmacy to commence sales.

MedMen has been enduring hardships for months

In February, MedMen announced that it would be executing a major restructuring plan. As part of the plan, the company sold its properties to Treehouse Real Estate Investment Trust (REIT) – formed in collaboration with Venice-based investment firm Stable Road Capital – for total net proceeds of $14 million. 

http://www.crainsnewyork.com/article/20170201/HEALTH_CARE/170209989/queens-cannabis-company-bloomfield-industries-to-move-upstate-after-being-acquired-following-a-period-of-poor-management-and-complaints-from-customers
(Pictured) Former MedMen co-founder and CEO, Adam Bierman

This move meant that the company could reclaim some funds and expand on a national scale. It was an eye-opening time for MedMen, which was previously considered to be the “Apple of the cannabis world.” Back in June 2018, the company went public on a Canadian stock exchange and was valued at $1.6 billion.

Unfortunately, what was once considered the country’s hottest startup cannabis company has since lost 95 percent of its value. MedMen’s downfall wasn’t helped by the fact that former CEO Adam Bierman ticked off so many people with his controversial behavior. Bierman, who was slammed with a lawsuit by a former insider last year, recently exited the company alongside his fellow former co-founder Andrew Modlin.

MedMen’s Q3 revenue topped $45.9 million

Notwithstanding the pitfalls that MedMen has fallen into lately, the company’s revenue for the third quarter (Q3) of 2020 soared 41 percent year-over-year (YoY). The Californian cannabis company managed to strengthen its balance sheet by merging debt, sales of non-core assets and equity. Moreover, MedMen’s Selling, General and Administrative Expenses (SG&A) sank 35 percent and 51 percent, respectively, from the same period in 2019.

This wasn’t the only win for MedMen amid the turmoil it has encountered. The company Appointed Tom Lynch as Interim Chief Executive Officer and Chief Restructuring Officer, as well as Tim Bossidy as Interim Chief Operating Officer in March. The staff pool continues to fill up, with MedMen recently revealing that it had hired a new board of director member named Niki Christoff — a former executive at Google and Uber.

Now, following MedMen’s loss of its Virginia medical cannabis dispensary license, the state must focus on ways to consistently serve the consumer demographic. Construction work is ongoing in the four other regions that were awarded business licenses, meaning that no medical cannabis in Virginia is currently available to purchase.