How MedMen CEO is making the pot producer an ‘investable story’
- MedMen CEO explains what he's doing to restructure the company.
- The pot producer now stands tall with the healthiest cash position in years.
- MedMen plans on opening several new stores to expand its footprint.
MedMen Enterprises Inc (CNSX: MMEN) – a California-based cannabis company once surrounded by legal and financial issues, now stands tall with the healthiest cash position in years, thanks to its new Chairman and CEO, Tom Lynch.
MedMen is undergoing aggressive restructuring
Lynch is aggressively cutting costs and restructuring the pot producer into an international brand that focuses on organic growth while sustaining margins, he told New Cannabis Ventures in an interview.
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When I arrived, the company’s retail footprint had a negative 8% EBITDA contribution per store. Now, the company is at a positive 20% across its portfolio.
With operations in California, Florida, Nevada, New York, Arizona, Illinois, and Massachusetts, MedMen now owns and operates six cultivation facilities, 29 retail stores and has plans to open several new locations in pursuit of expanding its footprint.
The restructuring also saw MedMen sell part of its New York assets to Ascend Wellness Holdings (AWH). The regulatory approval for the agreement is likely to arrive by the end of the year.
MedMen now has a strong balance sheet
According to Lynch, MedMen now has a strong enough balance sheet to tap into growth opportunities, especially after a sizable equity investment from Serruya. It is also exploring ways to collaborate with Canadian peer, Tilray Inc after it bought MedMen’s debt from Gotham Green Partners. Lynch said:
Tilray has an international reach, and MedMen has an international brand. So, there’s an opportunity to work together on that down.
He agrees that challenges remain, including legal and restructuring costs, but referred to significantly improved metrics like traffic, average basket size, and conversion rates, which he said were a proof that MedMen is now an “investable story”.