MedMen, a Los Angeles-primarily based multistate marijuana operator, announced it is laying off much more than 190 workers to shore up its bottom line, joining a developing list of cannabis businesses shedding workers amid falling MJ stock rates and a dearth of outdoors funding.
The money-strapped, vertically integrated business also disclosed plans to scale back its retailer openings subsequent year and delay investments in particular markets, like New York and Arizona.
MedMen also is exploring the sale of “certain operations and licenses in states that are presently deemed not crucial to the company’s retail footprint.”
In a news release Friday, MedMen mentioned the layoffs incorporate much more than 80 corporate-level staffers, amounting to much more than 20% of its corporate workforce.
As of Oct. 28, MedMen had much more the 1,300 workers, with half of these in retail. The business expects to save around $10 million via the head-count reduction, and it signaled that much more job cuts are probably on the horizon.
In announcing the layoffs, MedMen joins various other cannabis businesses in slashing its workforce, like Weedmaps, Pax Labs and Eaze.
“We obtain ourselves in the precise similar spot as all of the other competitors across the market, exactly where nobody’s totally funded since everybody’s been living in this higher-development phase,” Adam Bierman, MedMen co-founder and chief executive officer, told Bloomberg. “That’s why we’re taking such dramatic measures.”
As element of its plans to slash fees, the business mentioned it will:
- Sell off its interest in the cannabis-focused Treehouse REIT for total net proceeds of $14 million.
- Back out of “minority” investments in “high-development brands,” netting the business $eight million.
- Limit new retailer openings in 2020 to these with income prospective of much more than $10 million inside the initial year of getting operational.
- Divest licenses in “noncore markets.” MedMen mentioned it has hired Canaccord Genuity Corp. to “explore strategic alternatives” for these operations and licenses.
- Continue to concentrate its business enterprise efforts on Chicago, Las Vegas, Los Angeles, Miami and New York City.
The announcement follows final month’s disclosure by MedMen it was terminating its blockbuster acquisition of PharmaCann.
“We have a clear program to raise our market place share, whilst at the similar time enhancing our margins and minimizing our corporate overhead,” Bierman mentioned in the news release.
MedMen’s announcement Friday also indicated the business plans to take more price-cutting actions.
“It appears there will be much more layoffs, and a new share-primarily based incentive bonus program may possibly imply lowered base spend for remaining workers,” said Mike Regan, equity analyst at Marijuana Enterprise Day-to-day‘s Investor Intelligence.
“Of the $85 million in planned corporate expense savings, the specified cuts add only up to $32 million, so the supply of $53 million in savings remains to be observed.”
The news release noted that the business “will continue to get rid of layers inside the organization” to build higher efficiency, and that particular functions that previously existed across a number of states will be “consolidated into a centralized function.”
Bart Schaneman can be reached at [email protected]