MedMen Beset By Lawsuits, But This Investor Is Still Betting On The Cannabis Retailer
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Gotham Green Partners, a New York-based investor in the global cannabis industry, has agreed to provide a senior secured convertible credit facility totaling as much as $250M to MedMen Enterprises.
Los Angeles-based MedMen will use the financing to expand its retail presence in the cannabis sector.
Specifically, MedMen will focus on starting up medical marijuana dispensaries in Florida, where it is licensed for 30 stores. The company will also accelerate geographic expansion through acquisitions and other investments in core markets.
Currently MedMen has 19 cannabis facilities, including retail dispensaries but also cultivation and manufacturing. The company went public in 2018 via a reverse takeover and is listed on the Canadian Stock Exchange.
The new funding comes at a time when legislation is being considered in Congress that would make it easier for cannabis companies to use banks, which would open a new capital spigot to support the industry's growth.
It also is moving forward despite MedMen facing a raft of recent lawsuits.
Former employees have filed a class-action lawsuit alleging that the company didn't pay them for all hours worked, pay overtime wages or provide mandatory meal and rest breaks.
James Parker, who was the company's chief financial officer for less than a year in 2018, alleges in a different suit that he was wrongfully fired and that the company's work environment is “replete with racial, homophobic and misogynistic epithets and slurs.”
Also, one of MedMen's largest shareholders, former board member Brent Cox, filed a suit against the company alleging that in certain decisions, CEO Adam Bierman and President Andrew Modlin have put their personal financial interests ahead of the company's.
MedMen has vehemently denied wrongdoing in all these cases. When reports of alleged offensive comments and financial impropriety became public, the New York Medical Cannabis Industry Association kicked MedMen out.
MedMen holds one of the state's 10 licenses to operate a medical cannabis dispensary in New York, and operates a tony dispensary on Fifth Avenue in Manhattan.