MedMen Enterprises Inc., a Culver City-based cannabis retailer with locations throughout the U.S., saw revenue plummet 23.4% in its second fiscal quarter of 2021.
The company brought in $33.8 million for the period ending Dec. 26, down from nearly $44.1 million in the year-earlier quarter, according to earnings released on Feb. 16.
For the first half of the fiscal year, MedMen revenue was $69.4 million, down from $83.7 million in the same timeframe the previous year.
Chairman and Chief Executive Tom Lynch attributed the company's declining revenue to “retail restrictions in California.”
Cannabis is considered an essential business in California, which has allowed MedMen to remain open with limited capacity during lockdowns. But the company said in its earnings report that sales declined as many consumers have opted not to shop in person.
“The ultimate magnitude of Covid-19, including the extent of its overall impact on our financial and operational results cannot be reasonably estimated at this time; however, the company has experienced significant declines in sales,” MedMen said in a statement.
MedMen was struggling financially before the pandemic. Over the past two years, the company has sold off assets and stock, sought out cash infusions and laid off around 200 employees in its attempt to achieve profitability.
Lynch said that MedMen plans to accelerate growth in coming quarters through brand recognition along with help from changes to "operational efficiency and discipline."
One bright spot in the second quarter was in-store and curbside pickup at MedMen's retail locations, as well as gains by the company's direct-to-consumer channel, MedMen Delivery.
MedMen’s net loss attributable to shareholders in the period was $49.7 million, or $0.11 per share, up from the net loss of $41.3 million, or $0.02 per share, in the same quarter in 2020.
On Feb. 16, MedMen announced the sale of $5.8 million in “units,” consisting of shares and warrants, to unnamed institutional investors, distributed over the course of two rounds. A unit consists of one share and one warrant, which gives the owner a right to another share of MedMen in the future.
The first round will consist of 7.8 million units, expected to generate $2.9 million. The second round will also consist of 7.8 million unit.
