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by Stockwatch Business Reporter
The Canadian Securities Exchange Composite Index dropped 8.95 points to 396.91 Monday. Medmen Enterprises Inc. (MMEN) dove 32 cents to 98 cents on 2.55 million shares. After the market closed on Friday, Medmen announced that it would slash its work force by 190 employees (over 20 per cent of the company's employees) in an effort to reduce expenses. The United States-based cannabis retailer announced a number of initiatives aimed at reducing its costs and at becoming EBITDA-positive by the end of 2020. Medmen lost $277-million (U.S.) in fiscal 2019 (compared with its market cap of $151-million (U.S.)), so a plan to get itself back on track was necessary. At the end of fiscal 2019 (June 29, 2019), Medmen had just $849,000 (U.S.) remaining in working capital. It has access to $125-million (U.S.) from its credit facility with Gotham Green Partners, but to draw down much of that, it needs the consent of Gotham.
Medmen's losses have been made worse through seemingly excessive expenses such as $7.7-million (U.S.) on travel and entertainment and $14.4-million (U.S.) on security. The company made no mention of these expenses in its go-forward plan.
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