From debt defaults to ousted leaders, the hashish business had its justifiable share of scandals in 2022.
We at all times joke that point strikes rapidly within the hashish business. One 12 months in hashish is the same as 5 years in some other business.
It additionally feels just like the hashish business, in contrast to extra mature industries, has its justifiable share of scandals. So Inexperienced Market Report took a take a look at the previous 12 months and got here up with the highest 5 scandals within the hashish business for 2022.
MedMen/Ascend Wellness
This story began properly sufficient. MedMen wanted some cash and determined to promote its New York property to Ascend Wellness. A value was agreed upon, although it appeared somewhat low contemplating how promising the New York market seemed initially of 2022.
Then the highest administration at MedMen modified, and so they too thought the worth was a bit low-cost and tried to again out of the deal. After court docket battles that included accusations of political pandering, Ascend gained.
However the victory dance didn’t final lengthy. Ascend developed purchaser’s regret because the New York market started wanting like a scorching mess, so the corporate stated thanks however no thanks.
MedMen was left with its New York property and located itself caught with a property that few want even because it put them again on the shelf to promote. Marvel what would’ve occurred if MedMen had simply taken the unique value and closed on the deal earlier than the New York market unraveled for MSOs?
Parallel/Beau Wrigley
Hell hath no fury like a scorned investor. Parallel Hashish, which was once referred to as Surterra Wellness, discovered itself within the crosshairs with a few of its buyers. The buyers sued the corporate, saying that, in line with their funding settlement, Parallel couldn’t tackle extra debt – however it did.
The buyers additionally claimed that the corporate CEO, gum scion Beau Wrigley, wasn’t being truthful with them. Wrigley finally misplaced his job because of the lawsuits. However the problem is ongoing, and Parallel defaulted on that debt.
Regardless of that, Floridians can nonetheless go right into a Parallel hashish dispensary and purchase medical marijuana. Payments, schmills. Solely suckers pay their money owed, proper?
Excessive Occasions
No cash, no downside. Excessive Occasions owes its lenders $28 million, however that hasn’t stopped the corporate from happening an acquisition spree. It purchased Moxie Holdings and a consumption lounge this 12 months, and it paid for the offers regardless of defaulting on its debt.
Excessive Occasions additionally owes $5 million in again hire for a lease settlement it acquired caught with when it purchased some dispensaries from Harvest Well being.
The legacy writer began the 12 months by watching its newest CEO, Peter Horvath, stroll out the door and named Paul Henderson as CEO. Henderson’s additionally president and interim CFO. Busy man!
The corporate prolonged its inventory providing although it may possibly’t promote any inventory till it updates its financials with the SEC. If all that wasn’t sufficient, Excessive Occasions discovered itself embroiled in a inventory promotion scheme with a fraudulent e-newsletter author primarily based in Florida.
Perhaps the identify must be modified to Not-So-Excessive Occasions.
Dutchie Ditches Founders
Dutchie co-founders Ross and Zach Lipson discovered themselves dumped by their very own firm through a board coup. The Lipsons had been preventing for management of the corporate after some board members grew to become sad with their management.
Whereas the Lipsons went into the struggle pondering that they had majority voting energy, the board ditched considered one of their very own and adjusted the stability. It then ditched the Dutchie founders and put themselves in cost.
The brothers are suing, saying that the board didn’t have that energy and that they need to be reinstated. The board, which was made up of a number of buyers, imagine they’re in the appropriate and can deliver higher management to the corporate.
Lesson realized: Don’t piss off the buyers.
Tip Jar Jokes
It seems to be so easy. A tip jar on the counter for the bud tender. A little bit thanks for the hashish concierge, who possible will get paid lower than a residing wage. Solely it seems the employees weren’t getting the information.
Varied firms, together with Curaleaf and Bud’s Items & Provisions, discovered themselves in scorching water when staff complained they didn’t get their suggestions. Massachusetts landed on the aspect of the staff, who will get some a reimbursement from the corporate. Curaleaf argued that the employees had been advised to not put out a tip jar, however they did it anyway.
Right here’s a tip: Pay staff sufficient so {that a} tip jar doesn’t must grow to be a factor.
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