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This Is the Next Cannabis Stock CEO Who Needs to Go

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Two brand-name pot stock CEOs have resigned in less than two weeks, and this company’s leader may be next.

Just when you thought things couldn’t get any wilder for cannabis stocks, it does.

Following a miserable 2019 that saw the North American marijuana industry succumb to a combination of supply issues (both shortages and bottlenecks), high tax rates, and a resilient black market that is unwilling to give up market share, 2020 has begun with a number of key management changes. Within just the past two weeks, two CEOs of brand-name pot stocks have headed for the exit.

Two brand-name pot stock CEOs are now gone

It began on Jan. 31, when MedMen Enterprises (OTC:MMNFF) CEO and co-founder Adam Bierman announced that he’d be stepping down. This was a move that was considered long overdue by Wall Street and shareholders, with MedMen’s valuation having plunged by well over 90% since October 2018.

Although the vertically integrated multistate operator has offered glimpses of success, such as its longest-operating Southern California locations, which have rivaled Apple stores in terms of sales per square foot, MedMen’s overzealous expansion efforts have led to ballooning operating expenses and unsustainable losses. In fiscal 2019, MedMen wound up losing almost $232 million on an operating basis — and that was after a 30% reduction in selling, general, and administrative expenses between the beginning and end of the fiscal year.

MedMen is also facing a serious cash crunch. The company recently admitted to attempting to pay off its vendors with its own common stock. This comes after management noted that the final $115 million in financing of the up to $280 million pledged from private equity firm Gotham Green Partners is no longer accessible. It was definitely time for Bierman to step aside.

To Read The Rest Of This Article By Sean Williams on The Motley Fool
Published: February 11, 2020
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