Trailblazing yet financially insecure cannabis company MedMen Enterprises Inc. locked down its brightest ray of hope, Tom Lynch, as Chief Executive Officer earlier this month. After a lengthy period of risky and downright irresponsible financial moves by previous management, bringing Lynch on as interim and now permanent CEO of the company may just be the key to MedMen’s successful financial restructuring.
Lynch has a long professional history of being a “turnaround specialist” for struggling enterprises, which includes big names such as David’s Bridal and Frederick’s of Hollywood Group Inc. Across these varying industries, Lynch has successfully and optimistically led companies away from financial havoc and toward financial security. Because of his seemingly magic touch, Lynch and the rest of the folks at MedMen are subsequently optimistic that he’ll do the same for the widely popular cannabis corporation.
That’s the thing: MedMen isn’t struggling due to lack of sales or interest – in fact, their numerous locations in legalized states are often referred to as the “Apple stores of dispensaries” in reference to their modern and enticing displays and shopping experiences.
Rainbow labels, dazzling glass jars, and shiny gold mylar bags stuffed with the dankest, headiest, and latest flower innovations line the glass shelves.
Shopping at MedMen is a luxurious experience – you can even have their products delivered to your door, a service that grew in popularity during COVID-19 shutdowns. But while the previous MedMen management seemed to be focused on producing for its growing consumers, they let their debt rack up at a rate equal to its increasing popularity.
For example, MedMen is currently tied in a loan deal with Los Angeles-based Hankey Capital, which is charging a 15.5% interest rate on an existing $77 million loan. Their fiscal year-end report from June 27, 2020, showed an unfortunate loss of $526.5 million on $127.1 million – a trend that continued over the next nine months. But amidst MedMen’s financial struggles, Lynch appears undaunted and eternally optimistic; after years of experience as a partner and senior managing director at SierraConstellation Partners, a Boston-based management and advisory firm, he’s coming out strong with restructuring efforts in his newest endeavor at MedMen.
All things finance have long been a point of contention in the cannabis industry, especially when it comes to banking. But with the help of a financial restructuring expert like Lynch, MedMen is on its way to cleaning up its past mistakes and forging a successful path for its financial future.