Those familiar with the show that made Jon Hamm famous will immediately understand the alliterative allusion. Anyone acquainted with the clean lines and minimalist aesthetic of the latest overvalued tech startup will understand how to navigate the space. And when it comes to the way polished facades so often obscure a deeply troubled inner life — well, the folks at MedMen have that too.
With the help of slick marketing and dispensaries modeled after Apple stores, the California-based legal cannabis brand was once positioned to be the biggest marijuana chain in the U.S. Yet behind the hype, the company was hemorrhaging cash, binge-spending on lavish perks for top executives, and — if you believe the litany of lawsuits lodged against them — fostering a workplace culture of day-drinking, sexism, and schemes to inflate their stock price.
Considering that San Francisco’s Cannabis Equity Program seeks to cultivate a legal weed landscape where opportunities abound for those impacted by the War on Drugs and billionaire-backed bud takes a backseat, a local MedMen shop might seem like a longshot. And yet, MedMen recently secured approval for a Union Street location in the high-priced retail corridor of Cow Hollow.
Unlike some other cities, where saturation levels of lookalike, cookie-cutter retail cannabis franchises portend the Starbucks-ification of legal weed, San Francisco currently does not host a marijuana dispensary chain as large as MedMen. That’s partly because here in S.F., local laws dictate that a dispensary can only have four locations within the city.
Our biggest “chain” is The Apothecarium, which has three locations in the city and 10 nationwide. It’s owned by a Canadian conglomerate and traded on a stock exchange. Berner’s on Haight is under the umbrella of the Cookies brand, which has about 30 stores in the U.S. Other shops like Stiiizy and SPARC have two or three locations in town and a half a dozen or so elsewhere in California.
A local MedMen would certainly be the most corporate cannabis brand to plant a flag in San Francisco. At its peak in 2019, the chain held 78 retail dispensary licenses and enjoyed a $1.6 billion valuation. They’ve since lost significant ground.
When they launched their May 2018 IPO on the cannabis-friendly Canadian Securities Exchange, MedMen described themselves as “the largest U.S. weed company.” Their brash attitude and ambitious plans for industry dominance made few friends and plenty of enemies. It wasn’t long before the ascendant brand was brought low — thanks in part to a lengthy Politico exposé entitled “Lavish Parties, Greedy Pols and Panic Rooms: How the ‘Apple of Pot’ Collapsed.”
The “collapsed” MedMen has since restructured, and as the company prepares to enter San Francisco, it is aiming to tell a new story — aligning itself with celebrity cannabis activists and engaging an equity partner.
A Cannabis ‘Unicorn’
San Francisco was barely a month into its new recreational cannabis era when Culver City-based MedMen was declared the first U.S. cannabis “unicorn,” the trendy tech industry nickname for a startup achieving a $1 billion valuation. A Toronto investment firm agreed to buy three percent of the company for $30 million in early 2018, so doing the math, the company was “worth” about a billion dollars on paper.
Within months, the company scored a sponsorship deal with Gwyneth Paltrow’s nebulous lifestyle brand Goop to promote items like CBD bath bombs. Former Los Angeles mayor Antonio Villaraigosa joined their board of directors. MedMen splurged on TV ads directed by Spike Jonze (though these could only air on streaming services, not network television).
Their store openings in the ritzy retail corridors of Fifth Avenue in New York and Venice Beach’s Abbot Kinney were red-carpet affairs that drew the likes of sitting congressmen and actress Rosario Dawson.
The company achieved an even larger $1.6 billion valuation. CEO Adam Bierman bragged that MedMen was the “Apple store” of cannabis dispensaries, and appeared on CNBC’s Mad Money with Jim Cramer to discuss his plans to capture the “Chardonnay moms” demographic.
This did not endear Bierman or MedMen to the old-school cannabis activist set, whose work laid the foundation for the legal marijuana industry. MedMen was even name-checked in a running South Park gag that lampooned creeping corporate greed in the cannabis industry.
“MedMen? Those guys are poseurs,” anthropomorphic towel character Towelie complained in one episode. “Weed isn’t supposed to be some money grubbin’ business model.”
That business model would fall apart within 18 months, in a cannabis industry equivalent to the crash of the tech firm WeWork. In early 2020, MarketWatch reported that the company couldn’t pay its bills. MedMen was selling off dispensaries and farms in Arizona and Illinois to cover its debt and laying off staff. Its stock was down 95 percent.
End of the Party
In the first two months of 2019, MedMen was hit with not one, but two separate $20 million lawsuits. The second of these is still unresolved, accusing Bierman and co-founder Adam Modlin of creating a workplace “environment replete with racial, homophobic and misogynistic epithets and slurs, drug and alcohol abuse.” You can read these alleged epithets in a lawsuit filed by former MedMen CFO James Parker.
But SF Weekly’s review of MedMen’s March 26 Securities and Exchange Commission (SEC) filing also shows a previously unreported $11 million lawsuit filed just this past January by Seattle-based contractor JTM Construction Group. That firm had done build-out work at multiple MedMen Florida dispensary locations.
These lawsuits make for juicy ganja gossip. But MedMen’s biggest problem, as reported in December by Marijuana Business Daily, was that the company “ended the latest quarter with $498 million in net debt.” According to MedMen’s own SEC filings, “the Company has suffered recurring losses from operations and has a net working capital deficiency that raise substantial doubt about its ability to continue.”
In 2021, the company restructured and overhauled its executive staff. Bay Area basketball homers will cheer that former Golden State Warrior and cannabis activist Al Harrington was recently added to their board of directors.
More importantly, controversial CEO Adam Bierman stepped down in January, and the company has raised more than $100 million in new financing thus far in 2021.
“MedMen is pleased to continue to make significant strides in the overall performance of the company,” MedMen said in a statement to SF Weekly. “We see the introduction of the San Francisco Bay Area market as an integral part of this strategy and are excited to join the community.”
MedMen opened its latest Bay Area dispensary in Emeryville last week, and already has another location in San Jose. The proposed San Francisco dispensary could make an even bigger splash, but to comply with San Francisco’s equity cannabis ownership rules, the company has brought on Mission District native Malcolm Joshua Weitz as the CEO and part-owner of the Union Street location.
Weitz meets the equity requirements of being a victim of the War on Drugs, due to his 2015 arrest for transporting 50 kilos of California weed across the Texas border for which he says he received five years probation. “I was back at it again less than a month after my probation started,“ Weitz tells SF Weekly. “I ended up getting arrested for possession and sale of over a pound of marijuana in New York City, Lower East Side. I was subsequently locked up in Rikers Island for a year.”
Wietz is not taking over for Bierman at the top of the entire company. Rather, he is heading the proposed Cow Hollow shop and another proposed location at Union Square. Equity rules allow a local independent cannabis entrepreneur to partner with large firms to open individual shops, which Weitz says is necessary because of the hundreds of thousands of dollars in rent, architecture fees, legal fees, and building inspection costs necessary to open a cannabis business in San Francisco.
“We’re closing in on anywhere between $500,000 and a million dollars before you even put a hammer into a wall. It’s mind-boggling,” he says. “That’s exactly why an equity applicant would need to partner with somebody who has the stomach for that number. It’s a hard number to swallow.”
Weitz says he likes what he’s seen so far of MedMen’s corporate restructuring. He also says that he’s happy to see the company using its capital to open shops, rather than selling them off in fire sales.
“They’re getting back to doing exactly what they’re good at, which is operating really nice stores on high-traffic streets,” he says.
Joe Kukura is a contributing writer for SF Weekly. firstname.lastname@example.org