U.S. marijuana retail company MedMen Enterprises Inc.
is laying off more workers and transferring voting rights away from a co-founder as it continues to fight off a cash crunch. Less than a month ago, the company said that it planned to lay off 190 workers, including 20% of corporate staff, in order to lower its spending on selling, general and administrative efforts to an annualized rate of $85 million. In a fresh announcement Wednesday afternoon, MedMen said it laid off another 20% of corporate staff this week to bring the total reduction to more than 40%, and said that it now expects to reduce SG&A expenses to an annualized run rate of $65 million. MedMen also revealed that co-founder and President Andrew Modlin has turned over the super-voting rights from 815,295 class A shares – 50% of the class A shares in existence – to Executive Chairman Ben Rose for a period of one year. The company also issued revenue guidance for the current fiscal year and the 2021 fiscal year, projecting sales of $225 million to $245 million this fiscal year – which ends in June 2020 – and $450 million to $500 million in the following year. Analysts on average were expecting revenue of $292.8 million this year and $446.5 million next year. MedMen projected positive adjusted Ebitda in the quarter ending Sept. 26, 2020, and positive free cash flow in the quarter ending March 27, 2021. MedMen shares jumped 14.4% Wednesday to about 44 cents, after a debilitating run: The stock is down 60.7% in the past month and 85.2% so far this year.
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