The CEO of MedMen Enterprises (MMNFF) will not see the struggling cannabis retailer through its restructuring.
Adam Bierman, who co-founded the California dispensary chain in 2010, is stepping down from his role as chief executive, effective Feb. 1, MedMen announced Friday morning.
While Bierman is expected to remain a shareholder and a member of MedMen’s board – and will be among those subject to reelection at the company’s next shareholder meeting on Feb. 21 – his influence as a stockholder will diminish sharply as he is being stripped of control over the company.
“I continue to believe that MedMen is positioned to thrive,” Bierman said in a statement included in the announcement. “It’s time for our next iteration of leadership to capitalize on the opportunity we have created.”
Bierman has agreed to surrender his Class A super voting shares, which grant him more voting rights than other shareholders. Last month, MedMen co-founder Andrew Modlin granted share voting rights for one year to board chairman Ben Rose, chief investment officer of investor Wicklow Capital.
Following next month’s shareholder meeting, MedMen will form a special committee of independent directors to determine the amount of compensation Bierman will receive in conjunction with his resignation and transfer of shares.
Ryan Lissack, MedMen’s chief operating officer and chief technology officer, will serve as the interim CEO. The company plans to consider internal and external candidates for the CEO role. Lissack declined to be interviewed.
Bierman’s departure comes at a critical time for the future of MedMen, which sought to become the nation’s premier cannabis retailer by opening sleek, “Apple Store”-like dispensaries in high-profile locales. MedMen and others who went big on expansion plans, marketing and lobbying efforts, have been among the hardest hit as the cannabis industry swung into its recent downturn.
A blockbuster merger with cannabis operator PharmaCann fell apart, and in recent months, MedMen embarked on an aggressive cost-cutting plan and laid off hundreds of employees, exited markets barely a year after entering, and sought to modify outstanding debt arrangements – including offering to pay past-due vendor bills with stock.
Shares of MedMen jumped more than 13% and were trading at 46 cents by midday. Six months ago, shares were trading above $2.
Analyst Jesse Pytlak, who covers MedMen for Cormark Securities, said Bierman’s departure is a “net positive for shareholders.”
“In our view, Bierman rightfully deserves credit for building MMEN into the most recognizable retail brand in US cannabis, however, questions over his leadership approach and financial responsibility have been main concerns by investors,” Pytlak wrote in a note to investors.”We therefore think that his departure will allow the company a fresh start with investors.”
MedMen is scheduled to release is second-quarter earnings on Feb. 26.