NewsStock NewsStocksUSMedMen Facing New Allegations from Former CFO

Former Medmen CFO James Parker has made further allegations that not only is he owed a lot of money from MedMen but that the Company was also very aggressive in trying to drive up the price of its shares for the benefit of CEO Adam Bierman and other high-ranking executives.
David Jagielski David JagielskiMay 6, 20196 min

MedMen Enterprises Inc (CSE:MMEN) is having trouble staying out of the news for all the wrong reasons.

James Parker previously alleged that his former employer was reckless when it came to spending. And while The Company was dismissive of the claims, it’s hard to ignore that given the significant losses that MedMen incurred in its most recent quarterly results.

Last week, Parker made further allegations that not only is he owed a lot of money from MedMen but that The Company was also very aggressive in trying to drive up the price of its shares for the benefit of CEO Adam Bierman and other high-ranking executives. With the help of a company called Winning Media, Parker claims MedMen paid $200,000 for the media company’s services, which can sometimes include pumping and dumping.

It was on January 30 that MedMen’s stock would end up hitting its high for 2019, reaching over $5 a share. Since February, however, the stock has been hammered, declining more than 17% and it is now nowhere near even $4. The stock even attracted the attention of the OTC Markets which according to a release by a MedMen in March, “made inquiries regarding certain promotional activity concerning MedMen securities.

The Company noted in the press release that it believed the statements made were based on factual information such as investor presentations and financial statements. However, it did say that there were statements encouraging the purchase of the stock and that were not approved by The Company.

Regardless of which side you want to believe, it’s clear that there are some issues brewing over at MedMen.

Turnover as a result of efficiency?

In a leaked memo, written by Bierman, he suggests that the astronomical turnover that MedMen has seen is normal and even ties to efficiency. Yet for a growing company, it’ll likely see an increase in employees rather than a reduction, meaning the staff that has been terminated will inevitably need to be replaced. That in itself is an efficient process, to have to re-hire and re-train that much staff. It’s also concerning when you have key staff turnover in important roles for The Company. That suggests that the problems might be coming from the top.

While we don’t know the driving forces behind these terminations or what the potential problems might be, there’s no denying that where there’s smoke, there’s fire. And it’s not just coming from the boatloads of cash that MedMen is burning.

Investors should remain cautious

There’s quite a soap opera shaping up at MedMen and for investors, that means there’s a lot of uncertainty facing The Company, and so it’s no surprise that the share price has struggled recently. From high turnover to posting big losses and facing some significant allegations, bearish investors have no shortage of reasons to be selling the stock today. Ultimately, MedMen is going to have a tough road back until these issues are addressed and put behind The Company.

While MedMen has done very well growing its brand in various States, investors need to be careful in deciding whether the stock is worth the risk.

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