If there’s one weed company lining themselves up to be the next E! Hollywood True Story, it’s MedMen Enterprises ( ).
Management are acting like ballers with Mike Tyson lifestyles at the shareholders expense, last year over $27 million dollars in salaries and benefits were taken from the company.
The 3 guys at the top got into this thing to become rich, and God bless them, I can’t blame them for that. Here is CEO Andrew Modlin’s new West Hollywood crib.
Why MedMen Could Easily Go Bankrupt in 18-36 Months
In most startups the founders tend to take a smaller salary in the first couple years to allow room for the company to scale at a faster rate. They understand that if they make a bit of sacrifice early on, it will allow them more financial leverage in the future to build the company.
Not these guys though, they wanted that money quick.
Just how much cash are these boys slangin?
According to their most recent financials for the year ended June, 2018 MedMen incurred a net loss of $112,264,844.
Their expenses totalled $98,180,978, $27,058,150 of which were in salaries and benefits. This type of spending is becoming a trend, in 2017, the company had $14,138,166 in expenses, nearly half of which was in salaries and benefits at $6,002,760.
The company did an impressive $39,783,102 in revenue last year, but with the type of spending MedMen is used to, in the words of personal finance guru Dave Ramsey: ‘you can’t out earn your stupidity’.
MedMen’s saving grace is its ability to raise money from investors, the company has raised $238,304,659 to date, 101,802,288 coming from the private placement during their RTO.
The looming problem MedMen faces is the possibility that investors will begin to tire when MedMen comes knocking for more cash. It’s like the homeless man with a Gucci bag asking for change.
MedMen also has a North Korea-esque paranoia when it comes to their name and reputation, they recently tried to sue media outlet Equity Guru for half a billion dollars for writing unfavourable things about them.
With $112 million in expenses and $238 million cash and $39 million in revenue, this company isn’t exactly built for the long term when you break the numbers down.
At this point I wouldn’t be surprised if these guys bought a tiger to follow suit with Mike.