In the wake of financial losses, MedMen has announced plans to streamline its business model. One of the largest and best-known cannabis chains in the United States, MedMen will cut its cultivation and processing efforts, instead outsourcing to other outfits.
According to CNN, the new business plan is meant “to salvage a cannabis company that is running low on cash and is deeply in debt after a lengthy bout of growing too big, too fast.”
While MedMen has reported an increase in revenue, up 50% from the previous quarter, its losses have gone up at an even higher rate, from $18.7 million to $40.6 million.
“While vertical integration has been a big focus for the industry, our growing belief is that cannabis is evolving like every other consumer vertical: with a fragmented value chain and specialists at each layer,” Ryan Lissack, MedMen’s interim CEO said during the company’s latest earnings call this week.
The company has also announced that it may shutter some of its more than 30 retail locations across the country, even as its websitelists eight new franchises “coming soon.”
MedMen says it plans to put each of its current retail locations under enhanced scrutiny, with underperforming storefronts to be shuttered temporarily or permanently.
“We cannot continue to invest in assets that are not producing near-term cash returns,” said Zeeshan Hyder, the company’s chief financial officer.
Even while looking somewhat desperate, MedMen Executive Chairman Ben Rose indicated that the company is also contacting investors to bolster long-term funding.