Cannabis chain once worth $1.7 billion and called the ‘Apple store of weed’ is now nearly failing as the once-hot pot industry faces a major reckoning

February 7, 2023 · Fortune

A chain of cannabis stores that was once described as the “Apple store of weed” and valued as high as $1.7 billion as a public company, is near financial collapse, according to a regulatory filing.

The company, MedMen, said that it has only $15.6 million in cash remaining versus $137.4 million in debt.

“The conditions described above raise substantial doubt with respect to the company’s ability to meet its obligations for at least one year,” the company said in its filing last week.

MedMen is just the latest of the onetime cannabis darlings to face a reckoning as the industry bubble of five years ago deflates due to excessive debt, falling marijuana prices, competition from illegal sellers, and high taxes. The reality, as in any retail business, is that opening stores is expensive and taking on debt is risky—even as an increasing number of states legalize pot sales.

MedMen, based near Los Angeles, operates 23 stores including in California, New York, and Illinois. In an effort to cut costs, it sold its stores in Florida last year, is trying to sell its New York stores, and is also attempting to renegotiate leases for the stores that remain.

The company has already defaulted on some of its debt, the filing said, and it needs to obtain an extension or to refinance it.

In 2018, MedMen went public on the Canadian Securities Exchange through a reverse merger amid a wave of cannabis businesses. Early on, its shares rose to over $8, but today its stock trades for just 4 cents.

Shares in other pot-related companies have also suffered as the cannabis business lost its luster with investors. Stock of Tilray Brands, a cannabis producer that is among the industry’s largest companies, is down more than 90% from its all-time high, for example, while Canopy Growth, another major player, is down a similar amount. (Full Story)

In categories:Business Dispensaries
Next Post

N.J. will allow more legal weed companies to grow cannabis to boost slowly growing market

With New Jersey’s legal marijuana market off to a slow start, state officials announced Wednesday they would eliminate the cap on the number of companies allowed to grow weed and make $10 million in grants available to people opening a cannabis…
Read
Previous Post

Nevada Bill Could Remove Marijuana From Controlled Substances & Strip Pharmacy Board's Control Over It

New legislation in Nevada seeks to remove the status of cannabis as a "controlled substance" and strip the Nevada Board of Pharmacy of authority over the plant and its derivatives. Assemblyman Reuben D'Silva said that under the proposed bill, the Cannabis Compliance Board would have oversight over marijuana, reported…
Read
Random Post

The Cannabis Correlation - Every $1 Spent on Cannabis Leads to a Drop in Alcohol Sales of $0.75 to $0.85 Says New Canadian Study

New Study Finds That Every Dollar Of Cannabis Sold Is Linked to a Reduction in Alcohol Sales …. A Threat To Big Alcohol? Big players in the alcohol industry have long been watching the development of legal cannabis with a careful eye,…
Read
Random Post

The Senate must act on legislation clarifying cannabis banking rules

Members of the U.S. Senate Committee of Banking, Housing and Urban Affairs are scheduled to discuss legislation tomorrow, the Secure and Fair Enforcement (SAFE) Banking Act, that seeks to normalize relations between state-licensed cannabis businesses and financial institutions. The advancement of the SAFE Banking…
Read
Random Post

Ohio Republicans Vow to Undermine Will of Voters

Voters across Ohio approved a ballot measure Tuesday to legalize and regulate recreational cannabis, but leaders in the Republican-majority state legislature already have vowed to make significant changes to the law before Issue 2 goes into effect on December 7. “This statute…
Read
Random Post

California GOP Lawmaker Expands Psychedelics Bill To Create Workgroup And Plan For Veterans’ Therapeutic Access

As California’s 2024 legislative session gets underway, a Republican lawmaker has filed a revised bill to create a state workgroup that would be tasked with exploring a regulatory framework to provide therapeutic access to psychedelics like psilocybin and ibogaine. The…
Read