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MedMen, The $1.7 Billion Apple Store of Weed, Goes Bankrupt Just as Marijuana Gets Rescheduled in America

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MedMen Enterprises Inc. has admitted defeat, citing financial woes and an inability to settle its debts, revealed Amit Pandey, the former chief financial officer of the cannabis company, late Friday.

MedMen, once a celebrated pioneer in the cannabis industry and dubbed the ‘Apple store of weed,’ has been hit by a string of setbacks in recent years. These include financial woes, the shuttering of retail outlets, workforce reductions, legal battles, and internal disputes among top executives, all of which have led to the company’s current predicament.

In a press release issued on Friday, MedMen declared that they have carefully assessed the company’s and its subsidiaries’ current financial state. This assessment also includes their incapacity to meet financial obligations as they come and the imminent actions by secured creditors. To that end, they’ve reached the challenging decision to cease operations and initiate Bankruptcy Proceedings and Receivership Proceedings.”

Considering these factors and with no viable alternatives at hand, the Company’s board of directors concluded that proceeding with the Bankruptcy Proceedings and Receivership Proceedings was in the Company’s best interest,” the statement continued.

Here Are A Few Indications

Once revered as a titan in the cannabis industry, with a valuation soaring as high as $1.7 billion as a public entity, MedMen faced imminent financial collapse over a year ago, as revealed in a December 2022 regulatory filing with the Securities and Exchange Commission. At that time, the company possessed a mere $15.6 million in cash while grappling with a staggering $137.4 million debt load.

Following its initial financial struggles, MedMen faced a series of challenges. Store closures and inventory liquidation began in California, and the company defaulted on payments, leading to severed partnerships with major brands. Landlords demanded overdue rent payments. Amid this turmoil, top executives and board members started to depart, signaling deeper turmoil within the company, as the Green Market Report reported.

What Caused the Downfall?

The crux of the issue likely stems from the company’s swift expansion, driven by the initial excitement surrounding the 2018 legalization of cannabis in California. However, as is often the case nationwide, legalization marked just the beginning, leading to confrontations with the intricate realities of an industry rife with regulatory barriers, hefty taxes, and hampered by federal law.

Despite enjoying early triumphs, MedMen encountered a slew of obstacles, including legal disputes, unsuccessful acquisitions, and competition from both legal and underground cannabis markets.

Six years following an IPO that propelled its valuation to over $3 billion, MedMen, a cannabis retailer, now holds negligible value. Its recent bankruptcy filing in a California court signifies the final blow in a dramatic downfall for a company emblematic of the broader trials facing the legal cannabis sector.

“MedMen has been ‘DeadMen’ for many investors for quite some time,” remarked cannabis industry analyst Alan Brochstein to Fortune. “While this outcome may have been foreseeable to some, not everyone anticipated it.”

MedMen swiftly penetrated the legal cannabis scene following California’s legalization of recreational use in 2016. Initially lauded as the “Apple store of weed,” MedMen’s retail outlets boasted “sleek branding” and a “premium design aesthetic,” as outlined in a 2022 investor presentation.

To capitalize on the anticipated surge in legal cannabis demand, MedMen embarked on an ambitious expansion, opening upscale storefronts in prominent areas such as Venice Beach, New York’s Fifth Avenue, and near the Las Vegas Strip. Riding a wave of positive media coverage and public excitement surrounding legal cannabis, the company enjoyed significant attention.

Under the leadership of co-founder Adam Bierman, who launched the venture in his twenties, MedMen made its debut on the public market in 2018 at slightly above $3 per share. Investor enthusiasm drove its share price to double by the year’s end.

Buoyed by early triumphs, MedMen aimed for rapid growth, accumulating hundreds of millions in debt and pursuing an extensive $682 million merger with competitor PharmaCann. However, the merger collapsed following a Department of Justice announcement of an antitrust investigation, exacerbating MedMen’s financial woes.

As the broader cannabis market faced headwinds, compounded by concerns over regulatory scrutiny of hazardous vape cartridges, investor confidence waned, hindering MedMen’s ability to repay creditors. They went public in 2018. And by the time we reached 2020, [MedMen] was in big trouble, remarked Brochstein. They took on too much debt and made overzealous promises.”

Throughout 2019, MedMen’s stock plummeted, shedding 92% of its value as the company grappled with exorbitant tax obligations and struggled to compete against unlicensed sellers offering lower prices. The onset of the pandemic, however, triggered a surge in demand, providing MedMen and other cannabis retailers with a reprieve through 2020.

The cannabis industry did better than anybody would have expected in 2020. Despite this unexpected boon, it proved insufficient. At its peak, MedMen boasted 25 branches nationwide and had ambitious plans for international expansion. However, today, all but two locations have permanently shuttered.

Bierman, the co-founder, was ousted in early 2020 amidst a slew of high-profile lawsuits alleging racism, stock manipulation, and misuse of company funds to finance an extravagant lifestyle complete with private security and customized Cadillac Escalades.

A Fall From Grace

MedMen’s bankruptcy filing, unveiling over $400 million in liabilities, marks the final chapter in its stunning collapse. Hindered by steep interest rates and sour investor sentiment, the company could not refinance its debt, eventually ceasing SEC disclosures altogether.

“The capital markets were cut off for them so they couldn’t fix their old mistakes,” noted Brochstein.

The once-vibrant unicorn of the cannabis industry now stands bankrupt, with assets valued at a mere $1 (yes, just a dollar) and liabilities totaling $410 million, as detailed in the company’s bankruptcy documents. Predictably, MedMen’s shares, dormant for weeks, face imminent delisting following its steep downward spiral in 2024. At the start of this decline, the OTC Marketplace devalued the company to zero in January.

MedMen’s complete downfall serves as a sobering lesson in the ever-evolving cannabis sector, where once a fault appears, the entire structure can unravel swiftly.

 

MEDMEN BANKRUPTCY EXPLAINED, READ ON…

MEDMEN BANKRUPTCY PROCEEDING

FRANK SEGALL TALKS MEDMEN DISTRESSED DEBT!

 



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FDA Approves Landmark Clinical Trial for Veterans with PTSD and Smoking Cannabis

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For decades, veterans and civilians alike have turned to cannabis to manage their PTSD symptoms, often finding relief where traditional pharmaceuticals fell short. Walk into any VA hospital, and you’ll likely find patients being prescribed a cocktail of medications – SSRIs like sertraline and paroxetine, anti-anxiety drugs like alprazolam, sleep aids like zolpidem, and sometimes even antipsychotics. Yet many vets report these medications leave them feeling like zombies, trading one set of problems for another.

As someone who’s been following cannabis policy for years, I’ve watched countless researchers bang their heads against the wall trying to study this plant’s potential for PTSD treatment. The roadblocks have been numerous and, frankly, ridiculous. Despite overwhelming anecdotal evidence and desperate pleas from the veteran community, getting approval for clinical trials involving smokable cannabis has been about as easy as teaching a cat to swim – theoretically possible, but practically impossible.

That’s why the FDA’s recent approval of a landmark clinical trial has caught my attention. After three years of back-and-forth negotiations, the Multidisciplinary Association for Psychedelic Studies (MAPS) finally got the green light to conduct a Phase 2 study examining smoked cannabis for PTSD in veterans. This isn’t just another sterile laboratory experiment – it’s designed to reflect real-world usage patterns, something we’ve desperately needed in cannabis research.

In this article, we’ll dive deep into what this study means for veterans, the cannabis community, and the future of federal legalization. We’ll explore why this research is groundbreaking, how it might reshape our understanding of cannabis as medicine, and what it could mean for the millions of Americans living with PTSD.

Let’s dive into what makes this study so groundbreaking. MAPS isn’t just dipping their toes in the water – they’re diving in headfirst with a comprehensive Phase 2 clinical trial involving 320 veterans suffering from moderate to severe PTSD. What makes this study particularly fascinating is its focus on “real-world” cannabis use, allowing participants to self-titrate their dosage of high-THC flower within certain limits.

Now, for those who aren’t familiar with the FDA’s clinical trial phases, let me break it down. Phase 1 typically focuses on safety and involves a small group of people. Phase 2 – where this study sits – is where things get interesting. It’s designed to test both effectiveness and side effects, involving a larger group of participants. If successful, Phase 3 would follow with an even larger group, and finally, Phase 4 would monitor long-term safety after FDA approval.

The fact that this study reached Phase 2 is a big deal, folks. It means we’ve cleared the initial safety hurdles and are moving into territory that could actually influence medical policy. But what really sets this research apart is its focus on smokable flower. This wasn’t an easy win – MAPS had to fight through five partial clinical hold letters from the FDA just to get here.

Why does the smoking aspect matter so much? Well, think about it – most FDA-approved medications come in neat little pills or carefully measured doses. Smoking cannabis? That’s been a major sticking point for regulatory agencies. By including smoking as a delivery method, this study acknowledges how most veterans actually use cannabis in the real world. No fancy pharmaceutical extracts or synthetic compounds – just the plant in its most basic, smokable form.

The implications here are huge. If this study demonstrates positive results, it could fundamentally change how we approach cannabis as medicine. It might force regulatory bodies to reconsider their stance on smokable cannabis, potentially opening doors for more research and eventual federal approval of whole-plant medicine. This could be particularly significant for veterans, who often prefer smoking or vaping cannabis for its rapid onset and ease of dose control.

But perhaps most importantly, this study could provide the hard scientific evidence we’ve been missing. While thousands of veterans have testified about cannabis helping their PTSD, the lack of controlled clinical trials has been a major roadblock in changing federal policy. A successful outcome here could be the wedge we need to finally crack open the door to federal legalization.

Of course, we shouldn’t count our chickens before they hatch. Clinical trials are complex beasts, and there’s still a long road ahead. But for the first time in a long while, I’m feeling optimistic about the direction we’re heading. This study could be the game-changer we’ve been waiting for in the fight for cannabis legitimacy.

Let’s talk about PTSD – a condition that affects roughly 12 million American adults annually. That’s more people than the entire population of New York City, folks. Post-Traumatic Stress Disorder isn’t just about being scared or anxious; it’s a complex psychological condition where traumatic experiences get stuck in an endless replay loop, like a scratched record that keeps skipping back to the same devastating track.

But here’s where cannabis enters the picture, and it’s fascinating how it works. Our endocannabinoid system plays a crucial role in how we process and store memories, particularly emotional ones. When someone consumes cannabis, it can help disrupt those stubborn neural pathways that keep trauma loops running. Think of it like hitting the pause button on a horror movie that’s been playing on repeat in someone’s head.

However – and this is crucial – cannabis isn’t a magic eraser for trauma. I’ve spoken with countless veterans who use cannabis, and they’re the first to tell you: the plant helps manage symptoms, but it doesn’t “cure” PTSD. Real healing requires doing the hard work of processing and integrating traumatic experiences. Cannabis is more like a helpful companion on that journey rather than the destination itself.

What makes cannabis particularly interesting in PTSD treatment is its ability to increase neuroplasticity – the brain’s ability to form new neural connections and reorganize existing ones. This is where the real magic happens. When someone’s brain becomes more “plastic,” they’re better equipped to process traumatic memories and potentially create new, healthier neural pathways.

Speaking of neuroplasticity, we can’t ignore the elephant in the room – psilocybin. Recent studies have shown remarkable promise in treating PTSD with psilocybin-assisted therapy, often producing profound and lasting changes in just a few sessions. The fact that both cannabis and psilocybin increase neuroplasticity while offering different therapeutic approaches suggests we might be onto something big in trauma treatment.

What drives me crazy is how long it’s taken to get here. We’ve known about cannabis’s potential benefits for PTSD for decades. Veterans have been telling us. Trauma survivors have been telling us. Heck, even some forward-thinking psychiatrists have been telling us. Yet we’re only now getting around to serious clinical research? It’s a testament to how prohibition hasn’t just restricted access to cannabis – it’s actively delayed our understanding of this plant’s therapeutic potential.

But hey, better late than never, right? As we move forward with studies like the MAPS trial, we’re finally starting to piece together the scientific puzzle that veterans and other PTSD survivors have known about all along. Cannabis isn’t just helping them sleep better or feel calmer – it’s potentially giving them the neurological flexibility they need to process and integrate their trauma in a healthy way.

Like most things in the cannabis reform movement, progress moves at a snail’s pace. But as frustrating as it might be, we’re undeniably moving forward. The FDA’s approval of this MAPS study, focusing on smokable cannabis no less, marks a significant shift in how our regulatory bodies view cannabis research.

The beauty of this study lies in its real-world approach. No artificial laboratory settings or synthetic cannabinoids – just veterans using cannabis the way they already do. This authenticity could provide invaluable data about how cannabis actually functions as a medicine in everyday life, not just in theory.

Let’s be real though – regardless of what this study finds, veterans and others suffering from PTSD who’ve found relief with cannabis aren’t going to stop using it. The plant has been their lifeline when traditional pharmaceuticals failed them. But positive findings could open doors for countless others who might benefit from cannabis but have been hesitant due to its federal status or lack of clinical validation.

This is particularly crucial for our veteran community. With veteran suicide rates remaining tragically high – averaging around 17 deaths per day – we desperately need more treatment options. It’s no coincidence that veteran groups have been among the loudest voices calling for cannabis research and reform. They’ve seen firsthand how this plant can offer hope where traditional treatments have fallen short.

As we await the results of this groundbreaking study, I remain cautiously optimistic. Sure, progress is slower than we’d like, but each step forward brings us closer to a future where veterans and others with PTSD can access the medicine they need without stigma or legal barriers. And for the countless individuals struggling with PTSD, that future can’t come soon enough.

Source:

www.marijuanamoment.net/fda-approves-long-awaited-clinical-trial-of-smoked-marijuana-to-treat-ptsd-in-veterans/

 

ARE PSYCHEDELICS JUST WEED 2.0? READ ON…

PSYCHEDELICS SHOW BENZINGA

ARE MAGIC MUSHROOMS THE NEW WEED 2.0? WE ASKED THE EXPERTS!

 



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Oregon Cannabis: Get Your OLCC Renewal or New Application in Before December 5th

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As of this Thursday, December 5th, Ballot Measure 119 requires all OLCC licensed retailers, processors and labs to provide a signed labor peace agreement (LPA) with a bona fide labor organization, to renew or apply for an OLCC license.

In the totally avoidable, unduly compressed timeline since BM 119 passed, we have been advising our Oregon cannabis clients to renew their license applications ahead of the December 5th deadline if possible. Same deal for new applicants– get everything in before the deadline. This will allow qualifying businesses to avoid the LPA issue for another year (or maybe forever, if the courts get ahold of BM 119).

OLCC marijuana licensees are required to renew their licenses annually. Licensees are notified 90 days prior to their license expiration date that it’s time for license renewal. According to my wizard paralegal, this notice automatically posts in CAMP, which is the OLCC’s online licensing software. Specifically, a licensee will receive an “Actions Required” notification on their dashboard.

OLCC has confirmed that licenses set to expire after December 5th, will not require an LPA submission until the following year’s renewal, provided that the license has been renewed prior to the December 5th deadline. Same deal with any new license applicant. To that point, OLCC’s most recent BM 119 Bulletin is here. It answers some basic questions and contains no surprises.

OLCC also recently published its Labor Peace Agreement Attestation Form. This is a form that applicants may submit in lieu of actually filing their LPA with the Commission. Somebody asked me what the repercussions might be if they were to submit this form without having a signed LPA in place. The short answer is “don’t do that.” The longer answer is that there are many administrative rules dealing with “false statements”, “material false statements” and the submission of “false or misleading information” to OLCC. License revocation or non-renewal is a real possibility there.

For more information on this topic, the Cannabis Industry Alliance of Oregon has a guide here, and has been sending out helpful emails on its listserv (you can sign up for those here). The relevant OLCC materials are linked above, and I’ll provide links to our previous posts on this topic just below. For now, get those license renewals and applications in!

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Trump is a Businessman, He Will Legalize and Tax Marijuana

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The two biggest reasons why Trump supporters have said that Trump supports legalization is that he is a businessman and will legalize cannabis and tax it at the Federal level, and that since he will not be up for re-election in 4 years, he will legalize it and not worry about the pushback.  Both are terrible reasons because the US government already makes $2.5 billion a year (and growing!) by keeping the 280E tax code in place for cannabis businesses, and since he isn’t running for re-election means he has no incentive to come back to the middle or please Democrats on the weed issue.

Also, taxes are the #1 killer of the legal weed industry right now, so adding a Federal tax to the consumers’ bill will just push more people to the illicit and gray markets.

How bad are taxes in the weed industry you may ask?

The legalization of marijuana has ushered in a new era of cannabis consumption, transforming it from an illicit substance into a mainstream product. As states across the U.S. and countries around the world embrace this change, they are also capitalizing on the opportunity to generate significant tax revenue. However, while the legalization of marijuana has many benefits—including increased access, reduced criminalization, and economic growth—there is a hidden cost that consumers often overlook: the heavy taxation on legal weed. This article delves into the complexities of marijuana taxes, how they impact consumers, and why they may be hitting your wallet harder than you think.

 

The Landscape of Legal Marijuana

 

A Brief History of Marijuana Legalization

 

The journey toward marijuana legalization has been a long and winding road. In the United States, the movement gained momentum in the late 20th century, with California becoming the first state to legalize medical marijuana in 1996. Since then, more states have followed suit, with Colorado and Washington leading the way in 2012 by legalizing recreational use.

 

As of now, over 20 states have legalized recreational marijuana, while many others allow medical use. This shift has not only changed public perception but also created a new market that states are eager to tax.

 

The Economic Boom

 

Legalizing marijuana has proven to be an economic boon for many states. According to reports from various state governments, cannabis sales have generated billions in revenue. For instance, Colorado reported over $2 billion in sales in 2020 alone, contributing more than $387 million in tax revenue to state coffers. These funds are often earmarked for education, infrastructure, and public health programs—benefiting communities and justifying the high tax rates.

 

Understanding Marijuana Taxes

 

Types of Taxes Imposed on Cannabis

 

Marijuana taxes can be categorized into several types:

 

  • Excise Taxes: These are taxes imposed on specific goods and services. In many states where marijuana is legal, excise taxes are levied on cannabis sales at both the wholesale and retail levels. Rates can vary significantly; for example, California imposes a 15% excise tax on retail sales.

 

 

 

 

 

Variability Across States

 

The structure and rates of marijuana taxes vary widely from state to state:

  • California: A combination of a 15% excise tax and local sales taxes can lead to total taxes exceeding 30%.

  • Colorado: Recreational marijuana is subject to a 15% excise tax plus a 2.9% state sales tax and local taxes that can add up to another 5%.

  • Illinois: The state has one of the highest cannabis tax rates in the nation, with recreational marijuana taxed at rates ranging from 10% to 25%, depending on the potency.

This variability creates confusion among consumers and can lead to significant price differences between states.

 

The Impact on Consumers

The most immediate effect of these taxes is the increased cost of legal marijuana products. Consumers may find themselves paying significantly more for legal weed compared to what they would pay for illicit products. For example:

  • A gram of cannabis that might cost $10 on the black market could cost upwards of $15 or more in a legal dispensary due to taxes.

  • For consumers who regularly purchase cannabis for medical or recreational use, these additional costs can add up quickly.

 

Disparities Between Medical and Recreational Use

 

In many states, medical marijuana patients benefit from lower tax rates compared to recreational users. This disparity raises questions about equity within the legal cannabis market:

  • Patients often rely on cannabis for therapeutic reasons and may struggle with higher prices due to taxation.

  • Some states exempt medical marijuana from certain taxes entirely or offer reduced rates, but this is not universal.

 

 The Psychological Effect of Pricing

 

The psychological impact of pricing cannot be underestimated. Higher prices driven by taxes may discourage some consumers from purchasing legal cannabis altogether:

 

  • Consumers may revert to purchasing from illegal sources where prices are lower.

  • This undermines one of the primary goals of legalization: reducing illegal drug trade and its associated harms.

 

 

The Economic Implications

 

Impact on Small Businesses

 

While large corporations often dominate the legal cannabis market, small businesses play a crucial role as well. High taxation can create barriers for small dispensaries and growers:

 

  • Smaller businesses may struggle to compete with larger companies that can absorb costs more effectively.

  • High operating costs due to taxation can lead small businesses to raise prices further or limit their product offerings.

 

Job Creation vs. Tax Burden

 

Legalizing marijuana has created jobs across various sectors—from cultivation and retail to distribution and marketing. However, if consumer demand declines due to high prices caused by taxation:

 

 

 

The Future of Marijuana Taxation

As more states consider legalization or reevaluate their existing frameworks, there is potential for changes in how marijuana is taxed:

  • Some lawmakers are advocating for lower tax rates as a way to encourage consumer participation in the legal market.

  • Others argue that maintaining high taxes is necessary for funding public services and addressing social equity issues related to past drug enforcement practices.

 

The Role of Federal Legislation

 

Currently, marijuana remains classified as a Schedule I substance under federal law, complicating taxation at that level:

 

 

 

Conclusion

 

The hidden costs associated with marijuana taxation are significant and multifaceted, presenting both challenges and opportunities. While these taxes generate essential revenue for public services and help regulate an emerging industry, they also impose financial burdens on consumers that can deter participation in the legal market. As legalization expands globally, it is crucial for lawmakers to find a balance between generating revenue and ensuring accessibility for all consumers. By recognizing these hidden costs, consumers can make informed decisions about their cannabis purchases and advocate for fairer tax policies that promote equity within this burgeoning industry. Ultimately, while legal cannabis offers numerous benefits—from improved public health outcomes to enhanced economic opportunities—the taxes associated with it pose a complex challenge that demands careful consideration from both policymakers and consumers. Moving forward into this new era of cannabis consumption, transparency regarding these costs will be essential in shaping a fairer and more equitable market for all stakeholders involved.

 

CANNABIS AND TAX BURDENS, READ ON…

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THE #1 REASON CANNABIS BUSINESS FAIL? A. TAXES B. NON-PAYMENTS C. 280E?



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