US cannabis retailer MedMen Enterprises Inc. said: on Wednesday said its CEO and CEO had resigned, shortly after a cease-trade order was issued for the stock, as the once-high-flying cannabis retailer's valuation fell from $3 billion in 2018 to zero.
In a brief statement on Wednesday, the company said that Ellen Deutsch Harrison left the position of CEO and board member on Friday. Michael Seruya, CEO of the Board of Directors, resigned on Wednesday, after holding his position since 2021.
MedMen also said its board of directors has appointed Richard Ormond as head of restructuring management.
This move comes after years of executive changes at the company. Harrison Departure – Former Acreage Holdings Inc ACRHF,
and Hain Celestial Group Inc. HAIN,
Executive – comes shortly after she took up the position in July. Harrison and Serruya's exit “was not the result of any disagreements with the company regarding any matter relating to the company's operations, policies or practices,” MedMen said in a filing on Wednesday.
Back in 2018, when the California recreational pot market was gearing up, MedMen Enterprises MMNFF,
It drew attention to its open-plan dispensaries, furnished with display tables displaying edibles, buds, and e-cigarettes, and equipped with touch-screen tablets. The company opened its flagship store on upscale Fifth Avenue in midtown Manhattan to sell medical cannabis on April 20 of that year.
But the losses piled up. So did questions about executive compensation, legal battles, layoffs, and intense competition — from the legal and illicit markets.
MedMen stock reached an all-time closing high of $6.94 on October 16, 2018, with a market cap of $3 billion. But on January 12, the stock fell to $0.0006, a fraction of a penny. On Wednesday, the stock was listed at $0.0000, according to MarketWatch data.
MedMen was notified on January 11 by OTC Markets Group Inc. That the company's shares were moved to the OTC Expert Market from the OTCQB Market because it had not yet filed a 2023 annual report or 10-Q for the quarter ending September 30, the company said in a filing.
MedMen said it intends to resubmit the application with the OTCQB once it reports to the Securities and Exchange Commission, according to the filing.
OTC currently has a warning message attached to MedMen stock due to its current status as eligible for junk quotes only.
On January 5, the British Columbia Securities Commission and the Ontario Securities Commission issued a stop-trading order on MedMen's listing on the Canadian Securities Exchange, citing a lack of financial filings.
MedMen said on December 21 that it did not know when it would complete registrations. MedMen did not respond to a request for comment on Wednesday.
In a May filing, MedMen listed total liabilities of about $573 million, and a shareholder deficit of about $357 million.
Its net loss for the three months ended March 25 rose to $31.5 million from $29.8 million in the same quarter last year, as revenue fell to $27.2 million from $35.3 million in the same period last year.
The company's latest struggles have come in the face of strong competition from the illicit market in California, a slower-than-expected rollout to the New York market and other challenges.
But problems began to surface six years ago, when the stock was at its peak. After its founding in 2010 and rapid growth in California and other markets, Los Angeles-based MedMen failed in 2018 in its attempt to acquire PharmaCann in an all-stock deal worth $682 million.
Meanwhile, one of its founders, Adam Berman, left the company in 2020 in a move that sparked a wave of legal action. In December of 2022, Berman won a $3.1 million arbitration settlement with MedMen. Other problems arose when Ascend Wellness Inc. AAWH,
It backed out of a deal to buy MedMen's New York business in 2022 in a move to preserve $70 million in cash.
MedMen is also selling assets to raise funds. The company said this month it had sold its non-core business operations in Arizona. Plans to sell two cannabis stores in Nevada are awaiting regulatory approval.
Read also: MedMen puts New York business on sale after canceling Ascend deal
