🥤 Diet MedMen: Going Asset-Light

MedMen is the first cannabis retailer that caught my attention - which is probably true for lots of you.

I moved back home to Southern California in 2017, after a stint in NYC. I still worked at Anheuser-Busch, but was phenomenally unhappy there (stellar brands, but I’m not a fan of the size of the company or ways of working or much of anything else), and I began an earnest search for a career in cannabis.

MedMen, at the time, was the hottest thing on the market. They had opened their flagship store in June 2016, in the heart of WeHo, and they were about six months away from going public at an implied value of $1.8 billion. They were on an expansion tear, opening up stores on Abbott Kinney and other streets where cool kids dwell, and their progress was made all the more visible by the bright red billboards popping up all over Los Angeles (like the one above).

California was about to turn adult-use, and their Apple Store-inspired brick and mortar stores were bringing legitimacy and a premium feel to the fledgling legal market. I wanted to work there.

I actually sent Adam Bierman a direct LinkedIn message at the time. I just re-read it, and it’s about the cringiest thing ever. Truly, criminally cringey. It begins with the line: “Hi Adam - here’s the deal. I want to work at MedMen.” 🥴 Young Brian was gettin’ creative, and a little bit desperate.

But hey, that’s showbiz, baby.

Luckily for me, I was insanely unqualified for the positions I was seeking, so I was ignored.

🎯 It was about the brand

As we all watched the once-hot MSO lose something like 90% of its value, and as we all read the Politico articles and Forbes pieces on the misuse of funds and all-around bad behavior in the company, one item remained:

The brand.

MedMen had (and still has) a world-class brand. It stood for normalizing cannabis, reducing the stigma across a broad array of people. It was red as can be, and recognizable from anywhere (when I was at a meeting at the Culver City HQ once in 2018, one of the toilets was red). It delivered a strong retail experience across multiple markets, enhanced by technology and serviced by capable staff.

The early team at MedMen didn’t know much about growing, packaging, or selling cannabis - and that was made abundantly clear when they started losing unbelievable sums of money per quarter (they lost $178 million in the 3 quarters ended 3/30/19) - but what they did know, friends - was how to build a brand.

🥤 The new normal: asset light

2020 was a turnaround year for MedMen, spent figuring out what assets were worthwhile and where the company should spend its time and capital moving forward. Expansion was slowed, cuts were made. And in August 2021, a $100 million investment led by Serruya Private Equity changed the landscape even more. And, most recently, this happened:

From the press release around the above deal:

Serruya is a retail guy. Not a cultivation or packaging or digital guy. The company has indicated that its vision for the future is a tighter focus on top-performing retail assets, with simultaneous (and aggressive) expansion via trademark licensing - in other words, they’re letting the brand work for them.

Cookies does something similar, btw, via its “retail partner” model: license the world-class brand, provide the game plan, then take a cut of the revenue. It has worked pretty well so far.

📚 tl;dr

• I wrote a cringey email to Adam Bierman in 2017

• In its early days, MedMen was great at building a brand, and not so great at managing a national retailer or making money

• The new leadership at MedMen seems laser focused on:

  • Divesting from things that don’t make sense (like a large FL portfolio that would require intense capital expenditures to support)

  • Investing in things that do (licensing the brand and taking a cut)

• It is Friday