MedMen Enterprises Inc., which in November announced an ambitious plan to cut costs and achieve profitability, is already beginning to see the benefits of its efforts.
The Culver City-based cannabis retailer said in a Dec. 11 announcement that it has received $37 million in gross cash proceeds for the sale of various businesses since Nov. 26.
“Today’s announcements are a clear indicator of our ability to execute on capital allocation and cost saving initiatives to position MedMen for improved, long-term growth,” MedMen co-founder and Chief Executive Officer Adam Bierman said in a statement.
MedMen expects a sale of $27 million in shares to its investor, Wicklow Capital, to close Dec. 18.
The company also raised a $10 million convertible credit facility from investor Gotham Green Partners on Nov. 27.
“Our long-term investors have shown confidence in our strategic direction and industry-leading retail brand,” Bierman said. “With this strong level of support, we can now further focus management’s attention on maximizing our core assets while also reducing our corporate expenses to achieve positive (earnings) in calendar year 2020.”
MedMen reworked the terms of an existing $78 million loan issued by Stable Road Capital in October 2018, extending the due date by another two years but nearly doubling the interest rate.
On Nov. 15, MedMen announced it would lay off roughly 190 employees, and the company increased that number to include an additional 20% of corporate-level workers. Altogether, the company has reduced its headcount by more than 40%, saving an estimated $20 million in annual salaries.
MedMen was granted a delivery license in the Bay Area last month and opened a new store in Evanston, Ill., on Dec. 3. By early 2020 the company expects to operate four recreational cannabis stores in Illinois and nine in Florida. In total, MedMen operates 33 retail stores across nine states.
Bierman said MedMen expects its fiscal year 2020 revenue from wholesalers and retail locations to be in the $225 million to $245 million range.
MedMen’s fiscal year 2019 revenue totaled $130 million, and its annual net losses were $79.2 million.
Tech reporter Samson Amore can be reached at [email protected] or (323) 556-8335. Follow him on Twitter @samsonamore.
