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Adam Bierman to Get $3 Million from MedMen

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MedMen (OTC: MMNFF) will have to pony up more than $3 million for its co-founder and former CEO Adam Bierman.


An arbitrator ruled that Bieman was entitled to $3,063,300, plus costs of $49,243.34, for a total award of $3,112,543.34 related to his separation from the company. The base award represents the value of Bierman’s super voting shares and a bonus of 12 million common shares, as of August 2020.


Beleaguered MedMen was once billed as the first unicorn of cannabis, meaning the company had a billion-dollar valuation before going public, but now it is selling off parts and drowning in debt.



“After three long years, I’m glad the truth has come out and that I can finally share my story,” Bierman said. “The court found MedMen, as well as the former executive chairman, guilty of fraud. This judgment completes the factual narrative as I passionately chased the end of prohibition.”


However, the win could be cold comfort for Bierman as MedMen recently reported that it has a working capital deficit of a whopping $137 million and noted that it is a going concern. Medmen stated that it had already defaulted on debt with a senior lender and would need to obtain an extension or refinance.

The company has just $15 million in cash and equivalents on the books and a market cap of only $25 million. The stock was selling for less than two cents a share.


$2 Billion



According to the court document, MedMen went public on May 29, 2018, with its stock first listed on the Canadian Securities Exchange.

Days before the IPO, Bierman, as CEO of MedMen, executed an employment agreement for himself, which provided among its benefits:

  • $1.5 million in base salary.

  • An equity grant based on a time vesting schedule.

  • A special IPO bonus of $4 million if the company reached a $2 billion valuation.

Bierman received the valuation bonus in September 2018.

However, the company never revisited those lofty valuations. The stock was selling at roughly $3.54 at the beginning of 2019 but plunged to just roughly 53 cents by the end of 2019.


MedMen Falls


During this time, however, MedMen experienced some setbacks.

Before the IPO, MedMen agreed to buy PharmaCann, but the deal ultimately fell apart in fall 2019. MedMen’s stock fell, and the company needed to restructure as it cycled through several chief financial officers.


The final award statement claims that it was the failure of that deal that caused the stock price to fall, but the company also was reporting heavy losses and not paying its vendors. In addition, the co-founders were accused of enriching themselves as the company struggled.

“In December 2019, an investor died before completing his $20 million investment into the company. Initially, Ben Rose committed that Wicklow Capital, MedMen’s then-largest equity investor, would make up this shortfall. Rose was both a representative of Wicklow and executive chairman of MedMen. But the commitment soon morphed into an ultimatum: To obtain the cash infusion on Christmas, Bierman, Modlin, and Ganan had to sign personal guarantees on the money, or Wicklow would allow MedMen to miss payroll and other obligations. In May 2019, Bierman reduced his salary to $50,000 and changed his equity grant to be discretionary and based on performance, for ‘investor sentiment morale,'” the statement read.


Bierman’s Fiery Exit


According to the statement, on Jan. 24, 2020, Bierman called Rose to tell him he was thinking of stepping down as CEO.


“The next Monday (Jan. 27), Bierman met with Rose and John McCarthy, Wicklow’s general counsel, at MedMen’s offices to negotiate the terms of Bierman’s exit. … At times Rose chastised and cursed at Bierman. And at some point, the negotiations became so contentious that Ganan had to physically restrain Rose when he got up and moved as though he was going to strike Bierman.”


However, despite an oral agreement between Rose and Bierman for 18 million shares, the written separation agreement made no mention of Bierman’s right to a specified number.

According to the board minutes, it was determined that the consideration MedMen would pay Bierman to surrender his super voting shares would be put “through a more rigorous valuation process.”


Super Voting Value


According to the final award statement, Equity Methods valued the super voting shares at $951,300. FW Cook, on the other hand, valued the 2019 excess contribution at about negative $4.9 million, essentially concluding that no compensation was owed to Bierman for this portion.


Bierman contended that MedMen breached the separation agreement in three main ways:

  • Relying on the Equity Methods report, which contained manifest errors, to value the super voting shares.

  • Relying on the FW Cook report, again with manifest errors, to value the 2019 excess contribution.

  • Failing to issue any shares or cash for the super voting shares.


The arbitrator ruled that the Equity Methods report did not contain manifest errors and also denied Bierman’s request for “a multiple of two and a half times the 3.7 million shares” owed to him, because the claimed fraud was not “proven by clear and convincing evidence.”


With this case behind him, Bierman said he is looking at getting back into the cannabis game, noting that he is working on a few projects. One is a new retail concept based on the convenience store model with low overhead and higher margins.

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