🧔 Adam Bierman steps down as CEO, COO/CTO Ryan Lissack as interim CEO
☑️ Surrenders all Class A super voting shares
⁉️ Deal coming?
The change in management comes a few weeks after Co-Founder / former President Andrew Modlin also surrendered his Class A super voting shares (also with a title change) last month. Removing the Class A super voting shares from the founders makes it more likely for a sale of the Company to occur as the co-founders would have been able to block a sale previously. My guess is a deal might already be on the table, otherwise, the move would have been announced with a permanent CEO in place rather than announcing an interim CEO while mentioning that a permanent one could come from within or outside.
Adam hosted an AMA on r/weedstocks last week and his response to one of the questions now seems like this change was already underway and an attempt to start changing the narrative on the Company.
This was one of his responses to a question on stepping aside:
“As the biggest shareholders Andrew and I will always do what’s in the long term best interest of the business. In December, Andrew proxied his supervotes to Wicklow Capital and Ben Rose, our Executive Chairman. He also stepped away from the President role and moved to Chief Brand Officer. We have never been shy about having the right people in the right role and even more importantly the best person available for the role at that time. I know that for today I appreciate the support of our outstanding executive leadership team, board and capital partners (Wicklow and Gotham). I will continue to work tirelessly to create as much long term equity value as possible, for as long as I am CEO.”
This is a thread, rather than the normal post, so comments are open below.
MedMen today announced that Adam Bierman, Co-Founder and Chief Executive Officer, has decided to step down as Chief Executive Officer of the Company effective February 1, 2020. The board of directors of the Company is in the process of forming a committee of directors that will be responsible for identifying and appointing a new CEO. The committee expects to consider internal and external candidates and may engage a national search firm to aid in its efforts. In the interim, the board of directors has named the Company’s Chief Operating Officer & Chief Technology Officer, Ryan Lissack, as Interim CEO. Mr. Bierman has agreed to continue to serve on the Company’s board of directors, including as part of the board to be elected at the Company’s upcoming shareholder meeting.
In addition, Mr. Bierman has agreed to surrender all of his Class A super voting shares (the “Super Voting Shares”) back to the Company. As previously announced in December, MedMen Co-Founder Andrew Modlin granted a proxy over all of his Super Voting Shares to the Company’s Executive Chairman, Ben Rose until December 2020. Mr. Modlin has also agreed to surrender all of his Super Voting Shares to the Company, which would occur upon the expiration of the proxy granted to Mr. Rose. As a result of the surrender of the Super Voting Shares, by the end of 2020, MedMen will have only one class of outstanding shares, the Class B subordinate voting shares (the “Subordinate Voting Shares”), each of which entitle the holder to one vote.
“The Board supports both Adam’s decision to step aside for a new CEO to lead the Company, and his and Andrew’s decision to surrender their voting rights to give all shareholders a stronger voice. This evolution will provide Adam the space to contribute to the future of MedMen and extend his commitment to the industry that he has helped pioneer,” said Executive Chairman Ben Rose.
“I continue to believe that MedMen is positioned to thrive. It’s time for our next iteration of leadership to capitalize on the opportunity we have created. This has been an incredible journey and I will continue to be inspired by those around the globe working to make our world safer, healthier and happier through access to legal, regulated cannabis,” said Adam Bierman.
The Company plans to release its financial results for the second quarter fiscal 2020 ended December 28, 2019 after market close on Wednesday, February 26, 2020. Following the release of these financial results, at 5:00 PM Eastern that same day, the Company will host a conference call and audio webcast with interim Chief Executive Officer, Ryan Lissack, and Chief Financial Officer, Zeeshan Hyder, to discuss the results in further detail.
After all Super Voting Shares are canceled, Bierman will still hold ~5.8M subordinated voting shares (or equivalents) and ~9.7M of LTIP units that together would comprise ~4.8% of the company’s outstanding shares. However, this does not yet account for additional share consideration that could be awarded to Bierman with respect to the forfeiture of his Super Voting Shares, which could result in a significant increase in ownership.
Stock ended up 9.3% (USD) / 7.4% (CAD), above the majority of Cannabis stocks for the day, but not as much as expected given shareholders attitudes towards a shakeup over the past few quarters.