California-based cannabis behemoths MedMen is teetering on the edge right now. What was not too long ago the largest and most valued cannabis company in the world, has been amid a public relations nightmare for months now and was recently kicked out of burgeoning medicinal cannabis state, Virginia.
Earlier this month, the Virginia Board of Pharmacy rescinded MedMen’s medicinal cannabis dispensary license where they were set to open up in the town of Staunton. Over the past few months, Virginia has embraced cannabis reform, decriminalizing cannabis as of July 1, enabling a robust medicinal cannabis program, and seriously considering legalization for recreational adult-use, all of which should be a boon for MedMen in a newly cannabis-friendly state. Instead, its license has been revoked after an extension request was rejected.
MedMen’s Virginia license, which was conditional, came about after the failed 2019 merger between MedMen and PharmaCann left MedMen with that license as part of a settlement (they received the license for just $10). The failed merger however, left the nearly seven acres allotted for the dispensary undeveloped. Rather than allow MedMen an extension to develop the dispensary, the license has simply been revoked.
Last week, MedMen was at the center of a federal controversy in which whistleblower John Elias told the U.S. House Judiciary Committee that Trump-appointed Attorney General William Barr has unfairly focused on cannabis business mergers primarily because Barr’s office has opposed cannabis reform. “The Antitrust Division launched ten full-scale reviews of merger activity taking place in the marijuana, or cannabis, industry,” Elias testified. “These mergers involve companies with low market shares in a fragmented industry—they do not meet established criteria for antitrust investigations.”
Among those numerous mergers, only the MedMen and PharmaCann merger was mentioned by name because it was the first one Barr’s antitrust division reviewed. Elias, a career DOJ attorney, explained that the $682 million merger was fully reviewed by Barr despite the nature of the merger not meeting the high merge review threshold. The intense scrutiny was why the merger ultimately failed and lead the Virginia Board of Pharmacy to reject MedMen’s license.
But having its dispensary license revoked in Virginia is just one of many problems for MedMen, which has been hemorrhaging cash lately (losing tens of millions each quarter) and recently saw two if its co-founders, Adam Bierman and Andrew Modlin, step down amid lawsuits and controversies about a toxic business environment. An investigative piece in Politico from May detailed MedMen’s many excesses—a kind of billionaire tech-bro nightmare described in great detail in “Lavish Parties, Greedy Pols and Panic Rooms: How the ‘Apple of Pot’ Collapsed.”
In effect, the dual failings of the Trump administration to embrace cannabis reform (and on top of that, try to retaliate against cannabis companies) and the hubris of MedMen amid the “Green Rush” is having adverse effects on state-level cannabis programs. In Virginia, MedMen losing its license means that it is possible that Staunton, which is part of the “health service area” containing the Shenandoah Valley and Charlottesville simply will not have a dispensary of its own when medicinal cannabis begins.
“As with the initial round of applications to the Board of Pharmacy, I hope Staunton is still a point of interest for other potential entities,” Billy Vaughn, Staunton’s Community and Economic Development director told the Staunton News Leader.
Image by Kathy Wyche