Hashish retailer as soon as price $1.7 billion is now almost failing

The corporate, MedMen, stated that it has solely $15.6 million in money remaining versus $137.4 million in debt.

“The circumstances described above elevate substantial doubt with respect to the corporate’s capability to satisfy its obligations for not less than one yr,” the corporate stated in its submitting final week.

MedMen is simply the newest of the one-time cannabis darlings to face a reckoning because the trade bubble of 5 years in the past deflates attributable to extreme debt, falling marijuana costs, competitors from illegal sellers, and excessive taxes. The fact, like in any retail enterprise, is that opening shops is dear and taking over debt is dangerous—whilst an increasing number of states legalize pot gross sales.

MedMen, based mostly close to Los Angeles, operates 23 shops together with in California, New York, and Illinois. In an effort to chop prices, it offered its shops in Florida final yr, is making an attempt to promote its New York shops, and can be making an attempt to renegotiate leases for the shops that stay.

The corporate has already defaulted on a few of its debt, the submitting stated, and that it must acquire an extension or to refinance it.

In 2018, MedMen went public on the Canada Inventory Change by way of a reverse merger amid a wave of hashish companies. Early on, its shares rose to over $8, however right this moment its inventory trades for simply 4 cents.

Shares in different pot-related corporations have additionally suffered because the hashish enterprise misplaced its luster with traders. Inventory of Tilray Manufacturers, a hashish producer that’s among the many trade’s largest corporations, is down greater than 90% from its all-time excessive, for instance, whereas Cover Progress, one other main participant, is down an identical quantity.