Market Overview

New York Cannabis Trade Group Kicks Out MedMen After Former CFO Alleges Racism, Corruption

New York Cannabis Trade Group Kicks Out MedMen After Former CFO Alleges Racism, Corruption

Cannabis dispensary operator Medmen Enterprises Inc (OTC: MMNFF) is being pushed out a New York medical marijuana trade group amid allegations made by the company's former CFO in a lawsuit against the company.

What Happened

The New York Medical Cannabis Industry Association is kicking out MedMen following accusations of racist and sexist remarks, as well as allegations of financial corruption among executives, according to the New York Daily News. The association has asked MedMen to resign, but they are ready to expel the company if they refuse to do so, the News said. 

Last month, MedMen's former CFO James Parker filed a lawsuit against the company in Los Angeles Supreme Court.

In the lawsuit, Parker said he was "confronted with an environment replete with racial, homophobic and misogynistic epithets and slurs, drug and alcohol abuse [and] personal humiliation occasioned by the words and deeds of the CEO and president of the company."

MedMen spokesman Daniel Yi told the Daily News that the cannabis company continues to support the trade organization. 

“We have already addressed these allegations publicly. They are patently false. They were made by a disgruntled employee and are untrue," Yi told the newspaper.

CEO Adam Bierman and other executives used MedMen ran up huge expenses, according to the lawsuit. 

"After paying each of the founders (who already own combined more than 20 percent of a $2-billion market cap entity) $1.5 million in salary a year, plaintiff was ordered to spend several millions of company dollars on such items as 24-hour armed executive protection (security) for the CEO, president, and their families, high-tech safe rooms and security systems for their new houses, personal drivers, private jets (often with friends and family along for the ride), luxury hotels, special-order pearl white Escalades for the CEO (and another car for his family), a custom $160,000 Tesla SUV demanded by the president, tens of thousands of dollars apiece on multiple extravagant custom conference room tables and placing CEO Bierman’s personal therapist and marriage counselor on staff full-time as a 'performance improvement expert' at a pay rate in excess of $300,000 a year." 

Parker's lawsuit follows a complaint filed by two early investors in MedMen who accused the company of breaching its fiduciary duty. 

Why It's Important

MedMen holds one of 10 licenses to operate a medical marijuana dispensary in New York. The company has four dispensaries in New York and 21 stores across the U.S. 

What's Next

The state of New York is on path to legalize adult-use marijuana and could potentially become one of the largest markets for recreational weed in the U.S. Gov. Andrew Cuomo has pledged to legalize as part of a "justice agenda."

At the beginning of February, Cuomo reiterated that he's confident a vote can be taken to legalize weed as part of the state budget, the deadline for which is April 1.  

Related Links:

8 Stocks That Could Benefit From Marijuana Legalization In New York

The 3 Toughest States To Start A Cannabis Business


Related Articles (MMNFF)

View Comments and Join the Discussion!

Posted-In: marijuana new york daily news pot weedCannabis News Markets Media Best of Benzinga

Cannabis Movers