The MedMen (OTC: MMNFF) trial in Los Angeles started on Friday with a spicy first day of testimony. Former MedMen Chief Monetary Officer James Parker took the stand to testify towards his former employers in a case that stems from a 2019 grievance. Parker was as soon as the CFO of the hard-charging California-based hashish firm however abruptly left submitting a case that in the end induced Chief Govt Officer and Co-founder Adam Bierman to go away the corporate and lose majority voting rights.
In line with Law360, Parker advised the Los Angeles jury on Friday that he had no selection however to resign after discovering potential unlawful transportation of marijuana and inventory market manipulation. Law360 additionally reported that Parker didn’t end his testimony and that Parker’s lawyer Michael J. Kump of Kinsella Weitzman Iser Kump & Aldisert LLP advised the jury throughout his opening assertion that Modlin and Bierman additionally “created and imposed a poisonous administration model that included racist, homophobic and sexist slurs and different abusive conduct,” and that Parker complained to them “repeatedly about this.”
The report said that MedMen’s lawyer William F. Dugan of Baker & McKenzie LLP “advised the jury throughout opening statements that Parker was a poor CFO who was in over his head and that he negotiated the phrases of his personal contract. Dugan additionally stated Parker violated his contract by instantly quitting with out giving a 90-day discover, and did so simply as he had been knowledgeable he was being put underneath a efficiency assessment.” For its half, MedMen is paying for Parker’s authorized charges which might go as excessive as $500,000 a yr.
Law360 additionally famous that attorneys for the person defendants, Bierman and Modlin, didn’t ship any opening statements.
The scandal broke not lengthy after MedMen turned a publicly-traded firm when Parker abruptly resigned and filed a case that uncovered many scandalous particulars concerning the co-founders. Probably the most critical claims accused the founders of transporting hashish throughout state strains and paying somebody to purchase the corporate’s inventory as a way to artificially inflate the worth. Along with these allegations, Parker additionally claimed that the MedMen dispensaries had been accepting bank card costs, which aren’t allowed by the foremost bank card firms MasterCard and Visa. Along with these allegations, Parker cited the poisonous office and abusive language he was subjected to by Bierman. MedMen additionally claims that Parker can also be responsible of inappropriate and offensive feedback.
Background
MedMen started buying and selling publicly in 2018 and was described because the hashish business’s first unicorn with a billion-dollar valuation. Parker led the corporate’s transfer to change into a publicly-traded firm, however then he resigned in November 2018. This was seen as a pink flag as it’s fairly uncommon for a CFO to go away an organization inside months of going public. MedMen was additionally altering the phrases of its capital increase whereas reporting large losses and mediocre income (when in comparison with the corporate’s valuation).
It was in February 2019, that Parker filed the lawsuit claiming wrongful termination saying MedMen had begun trying to find a brand new CFO whereas he was nonetheless performing these duties. He alleged that MedMen ordered him to make funds from the corporate’s cash for private bills by the co-founders. These bills ranged from high-tech protected rooms of their houses to special-ordered autos. He additionally accused the co-founders of taking personal jets and bringing alongside family and friends and mainly utilizing the MedMen firm cash to pay for an extravagant way of life.
Parker alleged he despatched cash to a “guide” in Canada that was propping up the inventory when it bought off. Parker claimed that he personally paid for firm gadgets along with his bank card as a result of the co-founders Bierman and Andrew Modlin had been in a position to get a big sufficient credit score line attributable to their work within the hashish business. Parker stated within the courtroom submitting that these bills may attain as excessive as $150,000 to $250,000 every week.
Extra Issues
In March 2019, MedMen’s CEO Bierman claimed ignorance when it got here to mild that the OTC Markets had been making inquiries into inventory promotion exercise by an organization employed by MedMen. The web site www.marijuanastox.com ran a narrative created by a third-party consulting agency that was meant to advertise MedMen inventory. By April, extra prime executives started to go away the corporate. COO Ben Cook dinner and Normal Counsel Lisa Sergi each resigned together with the Senior Vice President of Company Communications Daniel Yi.
The bills on the firm remained elevated, whereas the revenues weren’t sufficient to cowl the prices. Rumors of the corporate being unable to pay distributors induced much more issues.
Along with that, MedMen made nice fanfare about shopping for the privately-held PharmaCann solely to terminate the deal months later.
CFO Churn
By August 2019, MedMen was churning by means of CEO’s like tinder dates. Jim Miller had been appointed interim CFO after Parker resigned. He was changed by Michael Kramer in December 2018, who was terminated in October 2019. Zeeshan Hyder was named the brand new CFO in October 2019. Hyder solely lasted slightly over a yr earlier than leaving in December 2020. Reece Fulgham turned the brand new interim CFO and stays in that position as we speak.
Bierman Ousted
It wasn’t till January 2020, that co-founder Adam Bierman stepped down and relinquished his super-voting shares. The corporate’s COO Ryan Lissack took over as interim CEO. In March 2020, Tom Lynch was named interim CEO and was made the everlasting CFO in July of 2021. He stays in that position as we speak.
MedMen has since bought a number of belongings and most just lately reported that its 2021 fourth-quarter income was $42.0 million, up 55.4% year-over-year and up 18.5% from the earlier quarter.
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