MedMen Enterprises continues to face challenges with the resignation of the chief operating officer and general counsel in April. More shakeups in management continue for the cannabis retailer based in Culver City, California. Problems also persist for the company with an updated lawsuit filed by former chief financial officer James Parker.
According to CNBC, Chief Operating Officer Ben Cook and General Counsel Lisa Sergi Trager — who also served on the company’s board — have resigned. Daniel Yi, senior vice president of corporate communications, has also quit.
Several members of the company’s design and technology teams were also let go along with the announcement of the new Technology Officer Ryan Lissack. The leaders of the operations group will now report directly to CEO Adam Bierman. Dan Edwards will continue in his role of senior vice president of legal affairs and report directly to the CEO.
“We appreciate the contributions of all current and former MedMen team members as we work to build the world’s leading cannabis company, and I have the utmost confidence in the management team. Their expertise, skill set, and experience set the standard of excellence for the industry,” Bierman said in a press release.
The company’s former CFO filed a lawsuit against MedMen for wrongful dismissal on Jan. 29. Michael Kramer has since replaced Parker as CFO.
The original suit alleges that the work environment at MedMen is “replete with racial, homophobic and misogynistic epithets and slurs, drug and alcohol abuse, personal humiliation occasioned by the words and deeds of the CEO and President of the company [and] profligate spending by both the CEO and President.”
Parker has since come forward with new allegations adding two more causes of action to the breach of contract lawsuit. He is asking for additional compensation because, under the terms of his employment agreement, he claims he was guaranteed 4.2 million “full value long- term incentive-plan units,” or equity grants in the company, that would vest over time. His total package would be worth $17.5 million in cash. However, according to the updated suit, he was denied any of those benefits after being terminated and is seeking restitution.
There are also allegations that MedMen illegally converted incentive-plan units into stock—worth about $25 million at the time based on the company’s stock price—and refuses to return the holdings. It is alleged that Bierman, President Andrew Modlin, and then-Chairman of the Board Ben Rose conspired to engage in a short-term stock manipulation scheme that netted them “millions of additional dollars.”
As alleged, one example of this plan is retaining the digital agency Winning Media for a fee of $200,000.
“Winning Media previously had been widely reported in the press to have been implicated in several ‘pump and dump’ schemes where, for a price, it would help drive-up share prices for a limited period of time,” the lawsuit motion reads. “Rose, Bierman and Modlin knew or should have known that Plaintiff would have strenuously objected to the retention of a company like Winning Media.”
It is alleged that efforts by Winning Media drove up MedMen’s stock price. When the OTC Markets Group began looking into the agency’s work on behalf of MedMen, the company then attempted to distance itself from Winning Media.
According to Parker’s updated lawsuit, “what MedMen Enterprises, Inc. did not disclose was that the General Partners (including Chairman Rose, CEO Bierman, and President Modlin) all had financially benefited from the run-up in stock price to the tune of millions of dollars each, using public company money to fund the Winning Media engagement, and to the direct detriment of their private equity limited partners/investors.”
In an email statement written to Marijuana Business Daily, “As we’ve said in the past, this is a baseless lawsuit for Parker’s financial gain, and we will continue to defend ourselves in court vigorously. We will not be distracted by these meritless allegations.”
According to MedMen’s website, the company owns and operates 19 facilities in Nevada, Arizona, California, Florida, and New York with flagship stores in Los Angeles, Las Vegas, and New York. It employs over 1,000 people, with plans to expand into other states and Canada.