Mauled by MedMen

By Steve Propes
Jeff, Matt and Zack Abrams.

One Love Dispensary at 2767 E Broadway opened unofficially in 2012, and closed for a spell thanks to a police raid. Then in 2018, it was officially licensed by the city after the cannabis was made legal by voters.

Owned by MattnJeremy, Inc. LLC d/b/a One Love Beach Club, all was smooth sailing until 2019 when they got an offer they chose not to refuse.

In what One Love co-founder Jeff Abrams describes as “the Abrams clan’s Shakespearean tragedy,” the MedMen deal was a major loss for these founders of One Love.

Historically, Jeff Abrams symbolized opposition to city efforts to quash unlicensed dispensaries. In a multi-year series of police raids of local dispensaries, One Love was the final dispensary targeted for unlicensed operation in February 2016, less than a day after the city council killed an ordinance that would have regulated medical marijuana dispensaries. One Love was the first to open legally in August 2018.

Jeff Abrams’ son and co-owner of One Love, Matt Abrams, said they sold the dispensary to MedMen in June 2019. The price was $13 million. “That was the number they agreed to at the time,” based on a multiple of one and half times one-year revenue. At the time, their gross sales were about $6 million, netting about $1.2 million.

“We had a broker approach us, who said, ‘We might have buyers.’ As the whole nature of the business had changed with new regulations, we were tired.  It was purely timing; right time right place. Myself, my mom, brother, two other partners. Down payment was a million along with all the stock, 10 million in stock. We were supposed to hold for a year.”

“It was basically a combination of cash and stock; the cash was on a digital payout over the year.” When the next payment came due, “they said couldn’t pay us, they’d have to pay in stock. They wanted to enter in a new agreement. They had a huge deal with PharmaCann in Illinois blow up after Jeff Sessions’ DOJ put on some pressure. MedMen stock fell from $1.95 a share to .17 a share. With these lower share prices, “the stock payout would be a 20 % of the company.”

Jeff Abrams sued in 2020 at L.A. Superior Court asking for an injunction, which the judge turned down. Because of COVID lockdowns, the trial was set for three years out. During the two and half years, “MedMen forced us into mediation. They offered to sell us back our store, the mediator said you can’t be serious. That was the end of the mediation. The case sat around for a year and half; we spent over $500,000 in legal expenses. We would send them motions, the court would sit on it because of COVID.”

“It gave them a reason not to pay us. Ken Bossidy was the interim COO at the time, Sierraconstellation Partners bailed the company out. They said, ‘Hey, we’re not going to make the payments.’”

Matt Abrams attributed the financial problems to “poor management. The founder, Adam Bierman, tried to bring the Apple thing to cannabis. He was pouring out millions of dollars and left with a big payout, a huge payout. After he left, the company arbitration settlement was $3.1 million. They had a lot of money in real estate trusts.”

At the end, MedMen agreed to return the store. Then, a holding company, Tilray, bought their debt. “Tilray didn’t want to return the store. In November 2023, Tilray refused to sign the paperwork. Based on the Tilray decision, they agreed to a payout of $3 million and five million in stock. After two payments of $100,000, the money stopped. “The lawyer cost $250,000.” As of the last quarter of 2024, the company had more than $474 million in liabilities, and less than nine million in cash.

“This was MedMen’s only Long Beach location. They closed down about a month ago. I have no idea who management is. Their attorney fired them for non-payment. Now they have a receiver.”

With MedMen creditors Gotham Green and Tilray, “we are talking to the receiver, trying to get the license back. It’s morally defeating, bad faith all the way. I knew a couple of guys who were suing them, couple of deals, building stores with them, but they never turned them over to them. They can’t file for bankruptcy.”

A recent MedMen financial statement disclosed, if they “were to experience a bankruptcy, there is no guarantee that U.S. federal bankruptcy protections would be available to MedMen’s United States operations, which would materially adversely affect prospects of MedMen and on the rights of lenders to and security holders of MedMen.”

A request for comment was sent to Tilray on April 2, but no response was received.

“The majority of retailers are struggling; the black market is too big. Nobody’s being arrested, but we’re still being chased for taxes since 2017. The city’s not that complicit, it’s more a state issue.  They lowered the taxes for dispensaries which allows people to get licenses. The Lift on Lakewood and Stearns just closed.  The Circle is still going strong, subsidized through cultivation.”

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