Did MedMen Just Make A Key Hire To Build A Competitor To Eaze?

Did MedMen Only Make A Key Hire To Build A Competitor To Eaze?

In late May, MedMen Enterprises Inc. (MMEN.CN) (MMNFF) completed a successful IPO on the Canadian Stock Exchange (CSE) and was immediately under pressure.

Although MedMen is a major cultivator, manufacturer and retailer of state-sanctioned cannabis in america, the shares were under pressure due to the company’s lavish management compensation packages (specifically the CEO and Chairman) and the arrangement of this offer.

Two days after MedMen began trading on the CSE, the shares had fallen almost 40% from the opening price on the day of IPO and were extremely oversold. This plunge created a great chance for new and existing investors and the shares came storming back.

MedMen rallied approx. 65% off these lows before discovering resistance and we are monitoring the decline. Today, we’ve issued an update on the company following the recent developments.

Now, MedMen announced two important additions to the management team. The company appointed David Dancer as Chief Marketing Officer. He is a veteran marketing executive with more than 25 years of experience leading brands like Teleflora, Charles Schwab, Visa and American Express.

MedMen also announced that Mike Lane would function as Chief Digital Officer. He had been the vice president of merchandise at Grindr and brings 20+ years of experience leading design and development of electronic customer experiences at major brands such as Live Nation, Ticketmaster, FOX Broadcasting and Adobe.

These additions lead us to think that MedMen is focused on developing and launching a marijuana delivery app to compete with Eaze. This sort of project would significantly benefit MedMen’s leading line as it would create a new revenue stream for the business. When looking at MedMen’s business, this seems like the obvious next step and we will continue to monitor the way the team executes. 

MedMen Drops on Equity Guru’s Article

Yesterday, MedMen listed a double-digit percentage decline on heavy volume after Equity Pro released a scathing article about the company. The article said that the company has been taking tips away from its employees. According to the story, numerous MedMen employees were told by management that their bi-weekly pay would be subjected to a deduction based on the customer gratuities that had been passed through the stores electronic payment systems.

This is a difficult situation and not a fantastic way to treat employees. We don’t think this sort of practice could cause any problems with the IRS or the state of California, and will continue to monitor the situation.

A Major United States Cannabis Company

With 18 licensed facilities in California, Nevada and New York, MedMen is a pioneer in the cannabis market.  In June, the company announced the acquisition of Florida’s Treadwell Nursery, with state licensing for 25 stores, and hope to hear some updates on this emerging market soon.

MedMen currently operates 13 stores in marquee locations like New York’s Fifth Avenue, Beverly Hills and Los Angeles’ Abbot Kinney district. MedMen’s branded shop in Downtown Las Vegas is scheduled to open this week, and the company has a joint venture arrangement with Canada’s Cronos Group to open stores in that country under its new adult-use program.

MedMen has fallen more than 20% from its late June highs and we are monitoring the recent decline. We consider MedMen to be a top United States cannabis retailer and this is a stock that investors will need to keep an eye on.

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