MedMen was the country’s hottest pot startup — until it flamed out
After a year at Division III Brandeis University, in Waltham, Massachusetts, he was soon back in California, transferring to Los Angeles City College, and then the University of Southern California in Los Angeles. While still enrolled in college, he set up shop as a sports agent, representing friends and teammates.profile and other online bios do not indicate he earned a college degree, but in 2004, Bierman started the BrandX Group, a marketing and public relations agency.
“It’s like Penn & Teller,” explained Rob Kampia, who as the former executive director for the Marijuana Policy Project put on several events with the duo, referring to the magician duo in which one partner does the talking while the other is silent. Steve DeAngelo welcomes costumers to his Harborside marijuana dispensary in Oakland on Jan. 1, 2018, the first day recreational marijuana can be sold legally in California. | AP Photo/Mathew Sumner
“They honed their cannabis chops in the era when you opened a shop you had to expect it would be shut down in eight or six or ten weeks,” DeAngelo said of MedMen, arguing that this environment fostered a fly-by-night ethic. The latter headline, if anything, understates the 2012 incident, in which masked men abducted a dispensary owner, castrated him, and left him for dead on the side of a road in the Mojave Desert. The man survived. His severed member was never recovered.
Where the traditional dispensary experience could feel grungy and illicit, the MedMen in “WeHo,” with its wood-paneled interior, aimed for sleek sophistication. Strains of weed were displayed in well-lit glass cases, and built-in iPads allowed customers to browse information about the offerings. The weed was stored in stainless steel drums in a back room that resembled an open kitchen in a high-end restaurant.
Around this time, he began pitching his business at conferences hosted by the Arcview Group, a network of cannabis investors. Troy Dayton, who co-founded Arcview with DeAngelo, said MedMen’s valuation was about $30 million when Bierman began showing up at the group’s gatherings.
Kampia, whose Marijuana Policy Project has been a chief mover in liberalization campaigns nationwide since the ’90s, said MedMen was the first business to step up with a six-figure donation and provided a significant part of his group’s budget from 2015 to 2017. The Drug Policy Alliance declined the requests, and the partnership ended after the first clinic, Hernandez said.
Four months earlier, MedMen had announced it was raising an eye-popping $100 million. By mid-2017, the firmthat it had raised $60 million, which, despite falling short of its goal, still amounted to a head-turning figure in pot circles. In early 2018, Toronto-based Captor Capital invested $30 million for a 3 percent stake, implying that MedMen was among the first, if not the first, U.S. cannabis firm with a ten-figure value.
Top: Customers line up for recreational marijuana outside one of MedMen's marijuana dispensaries in Los Angeles in January 2018. Bottom: An employee hands a customer a shopping bag at the MedMen dispensary in West Hollywood in January 2018. | AP Photo/Richard Vogel, Patrick T. Fallon/Bloomberg via Getty ImagesMedMen hired dozens of staffers for its in-house marketing agency.
Because of weed’s legal status, internet platforms like Google and Facebook, as well as most television stations, generally reject ads for it.The centerpiece of the marketing blitz, however, was a dramatic ad directed by Spike Jonze, better known for his critically acclaimed feature films like “Being John Malkovich” and “Her.” The two-minutedepicts MedMen’s version of the historical arc of American cannabis.
At its height, MedMen seemed to be everywhere. It snapped up a retail location in Manhattan’s Meatpacking District and secured preliminary approvals to open a shop near Boston’s Fenway Park. It opened a store in Beverly Hills and acquired a pot business in Arizona. In Nevada, it opened a cultivation facility in Reno, opened stores in Vegas, and started a delivery service.
Four months later, Former L.A. Mayor Antonio Villaraigosa joined MedMen’s corporate board. Villaraigosa, a Democrat who has since left the board, declined to comment.MedMen also hired lobbyists in Florida, Illinois, Massachusetts, California, Nevada and New York, according to state disclosure databases., Bierman spoke of navigating “the most arduous retail zoning restrictions known to man.”
It turned out that frosted windows ran afoul of local police departments. So, the executive recalled, MedMen obtained permission from the state to restore its transparent windows. Regulators dropped their complaint about visible dispensing activity at the register but made MedMen take down its branded T-shirts.“It’s Kafka,” the former executive said. “It happens because the rules and regulations just don’t make sense.
One cannabis executive who visited the headquarters in its prime was struck by the super high-end sports cars in the first two parking spots outside the entrance—out of place in both the neighborhood and in this still-modest industry. Two former executives said the firm maintained a small “culture group,” whose job it was to guide the company culture.
The market suspended its disbelief. In October of 2018, MedMen announced a deal to purchase PharmaCann, an Illinois-based retailer with operations in several states, for nearly $700 million in stock. It was to be the largest-ever cannabis acquisition in the U.S., and the move played well with investors.
Later that month, the company’s outgoing CFO filed a more sensational suit. In his complaint, James Parker claimed that Bierman and Modlin breached his contract by forcing him out of the company in response to his attempts to professionalize its finances and uphold his fiduciary duties to shareholders.
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