The lawsuit alleges co-founders Adam Bierman and Andrew Modlin, along with former executive Christopher Ganan, “engaged in self-dealing in breach of their fiduciary duties” by negotiating themselves bonuses worth more than $9M “on entirely unreasonable terms.” The company paid out “at a time where MedMen was in substantial need of liquidity.”
The complaint alleges that shortly before MedMen’s 2018 initial stock offering CEO Bierman executed employment agreements for himself, Modlin and Ganan that guaranteed them “onerous terms of compensation.” These include guaranteed payouts of $4M for Bierman and Modlin and $1M for Ganan if the company’s enterprise value ever reaches $2B.
MedMen is informed and believes, the filing reads, that the defendants “caused MedMen to reach the triggering market capitalization…all without any long-term benefit to MedMen.” MedMen’s market cap is currently around $70M Canadian.
MedMen recently used cannabis’ federal illegality as a defense in lawsuit over unpaid rent.
The defendants didn’t respond to requests for comment.