Adam Bierman and Andrew Modlin appear at a MedMen store opening in 2018. (Photo courtesy of MedMen website)
(This story has been updated to reflect that The Parent Co. agreed to acquire Coastal Holding Co.)
The once-high-flying co-founders of MedMen Enterprises, Adam Bierman and Andrew Modlin, are back in the spotlight – this time for a new court battle. Or two.
Thirteen months after they were given a way back into the cannabis industry by the owners of a California retail chain, Bierman and Modlin have now sued their new partners, accusing them of scheming to unload the company in a “fire sale.”
The duo – who were ousted from MedMen in early 2020 – recently filed three lawsuits in state and federal court against five co-owners of Coastal Holding Co. over plans to sell the Santa Barbara-based company for $56.2 million.
On Monday, The Parent Co. said it agreed to acquire 100% of the equity securities of Coastal in a cash-and-stock deal worth up to $56.2 million.
The San Jose, California-based vertically integrated Parent Co. noted in a news release that the sale is “contingent upon the successful transfer of Coastal’s cannabis licenses.”
It’s unclear whether the lawsuits filed by Bierman and Modlin could scuttle the deal.
The two claim that, as investors and partial owners of Coastal, they have the right to approve the sale but have refused to do so.
The legal tussle, first reported by Law360.com, has been characterized by finger-pointing on both sides.
The other owners of Coastal responded in a court filing that Bierman organized the very sale that he and Modlin now want to torpedo.
“It was Plaintiff, not Defendants, who recommended, found, and negotiated” the sale of Coastal for $56.2 million, according to a court filing by the company’s other owners.
“In fact, (Bierman) has repeatedly expressed concern that Coastal will not survive without an immediate capital infusion.”
At the same time, legal experts said Bierman and Modlin might have created more trouble for themselves as a result of the legal skirmish.
In particular, they revealed their partial ownership of Coastal in their $3.7 million investment in the company, which holds eight marijuana business licenses around Southern and Central California for retail, delivery, distribution and manufacturing.
To Read The Rest Of This Article By John Schroyer on MJBiz Daily
Published: October 04, 2021
Founder & Interim Editor of L.A. Cannabis News