MedMen CEO Adam Bierman is stepping down from the company and surrendering all of his Class A super voting shares. This move is effective Feb. 1.
Bierman will remain on the company's board of directors, which is now responsible for identifying and appointing a new CEO. MedMen COO Ryan Lissack will step in as interim CEO for now.
Last month, MedMen co-founder Andrew Modlin announced that he had handed over all of his super voting shares to the company’s Executive Chairman, Ben Rose, until December 2020.
“The board supports both Adam’s decision to step aside for a new CEO to lead the company, and his and Andrew’s decision to surrender their voting rights to give all shareholders a stronger voice. This evolution will provide Adam the space to contribute to the future of MedMen and extend his commitment to the industry that he has helped pioneer,” Rose said in a public statement.
The news follows a series of layoffs at the company in California and recent court filings that have shed light on internal financial matters. Investors have sued the company in state court, alleging breach of fiduciary duty. Part of the lawsuit described a complicated internal structure that vested nearly all voting power within the company in the hands of Bierman and Modlin, effectively silencing any investors' voices. That corporate power was conveyed in Bierman and Modlin's super voting shares.
"As a result of the surrender of the super voting shares, by the end of 2020, MedMen will have only one class of outstanding shares, the Class B subordinate voting shares, each of which entitle the holder to one vote," according to the company.
Second quarter financial results (for the company's fiscal 2020) are due out Feb. 26.
A Seeking Alpha report from earlier this week paints a grim picture of long-term debt and negative cash flow. Throughout the past year, investors and industry observers have pointed to MedMen's all-stock acquisition spree as a sign of trouble. And with no voice granted to the company's legions of investors, Bierman's corporate moves were never given space for debate or pushback.
Looking back at the investors' lawsuit, one line stands out: “This dynamic—Bierman agreeing with Bierman to pay Bierman for things Bierman agreed with Bierman to do because they were good for Bierman, while being terrible for shareholders and for the entities Bierman decided should pay him—permeates the entire MedMen enterprise.”