MedMen Issues 6+ Million Shares to Pay Vendors; iAnthus to Open 1st "Be." Store in New York
MedMen Files Documents Detailing Issuance of Over 6 Million Shares to Pay Off Vendors
Back in mid-January, rumors began circulating around various social media channels that MedMen, unable to pay their vendors, were offering to pay them with shares of the company in lieu of cash.
A few days of relative silence passed by until January 23, when MedMen’s former CEO, Adam Bierman, did an interview with Green Market Report’s Debra Borchardt that ultimately confirmed the truth of the alleged rumors.
“Those emails are absolutely, real emails. We’ve never denied those emails. We’ve been very forthright with the public, and with our investment community at large about the fact that at the end of last year we entered into a restructuring in the business, exiting the hyper-growth stage of the business, and getting into sustainability, and with that, there’s a lot of pain. … we stopped payments to certain vendors as would be commonplace in the restructuring of a retailer. We turned over our accounts payable to a restructuring consulting firm (FTI Consulting) so that we could preserve and allocate the cash as we got through and out the other end of restructuring.”
In an attempt seemingly diffuse and normalize the situation, Bierman went on to share that similar payment arrangements had happened in the past – with the shoe having been previously on the other foot:
“But I also say that there have been plenty of times where, well, roles have been reversed and we’ve been asked to be partners, long term partners to some of these groups. I think that’s just part of building an industry. There will be times when you’ll be asked to help others out in the industry. And there’ll be times when it’s vice versa. We are probably 30 days away from being out the other end of this restructuring."
Bierman stepped down as MedMen CEO just one week later after this interview, while also surrendering his super voting shares.
Although Bierman was relegated to a seat on the Board, MedMen will host their Annual Shareholder Meeting on February 21 at 10:30 AM EST. One such topic matter being voted upon is electing six Directors for the ensuing year, with Mr. Bierman being one of the six proposed candidates.
Official company filings submitted to the CSE this past Monday delves into the details of the shares MedMen utilized to pay vendors.
On January 31, 2020, MedMen issued a total of 2,874,425 shares to 5 different "purchasers” – 4 in California, and 1 in Nevada – at a share price of $0.448 USD. The dollar value total for these shares was just under $1.2 million.
Additionally, just one week later on February 6, MedMen again paid six different vendors – 4 in California, and 2 in Canada (Toronto, Vancouver) a total of 3,274,216 shares at a share price of $0.393 USD. This transaction paid out a total of $1.34 million.
All in all, MedMen issued over 6 million shares to satisfy over $2.5 million in indebtedness. Both transactions were detailed to be eventuated “in satisfaction of amounts payable to various vendors".
At the time of publishing, it’s unclear if MedMen is still paying vendors with shares of the company instead of cash.
Shares of MedMen (CSE: MMEN, OTC: MMNFF) are trading down approximately 41% year-to-date, and the company is expected to report their second quarter financials on February 26.
iAnthus is Gearing Up to Open Staten Island's First Medical Cannabis Dispensary.
iAnthus plans to open up their third New York dispensary in the coming weeks, doing business under their previously announced retail brand of "Be.". Company representatives shared that there will be a soft opening "very soon", along with a grand opening celebration sometime in March.
Situated in Staten Island, this will be the only dispensary available to serve the nearly 500,000 citizen-strong borough.
Although no opening date has been set, iAnthus also owns a license to build-out a fourth New York dispensary in Ithica. The company also owns a production license for a roughly 50,000 square foot facility in Warwick that they plan to focus development on later in 2020.
New York's Governor Andrew Cuomo, in remarks delivered this past Thursday, stated his intention to visit states such as Illinois, Massachusetts and "California or Colorado", to converse with officials from those jurisdictions about how their legalization efforts have played out.
Specifically speaking, Governor Cuomo expressed interest in seeing what has and hasn't worked for those states from the standpoint of social equity and law enforcement. In gathering this information, Governor Cuomo wants to ensure that he has the "best bill" and "best system" possible for a bill he hopes to pass come April 1.
iAnthus (CSE: IAN, OTC: ITHUF) is one of just ten total companies authorized to serve New York's 114,000+ medical cannabis program participants. Shares of the company are trading down roughly 24% on the year.
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