The Los Angeles based marijuana operator, Madmen has announced that they will be cutting down around 190 jobs and will be putting hold on various expansion projects due to unfavorable conditions and dropping stock prices. They are not the first cannabis operator to do so as a lot of other companies have followed the same path in the past few days due to rigorous regulations and investors pulling out their investments. The latest regulations have drastically affected the cannabis firms and nearly all of them are performing badly in stock exchange.
They announced that they will be scaling down their store openings, putting a hold on investments in certain areas like Arizona and New York, along with cancelling projects and operations that are not as profitable for the company. They will be selling some of their licenses in different states that are not very important for their core operations. It is being said that they are cutting around 20% of their current workforce.
Until October 28, Madmen boasted a team of 1300 employees around America and nearly half of those workers were working in their retail stores. The company expects to save around $10 million after reducing the head count of their employees and has indicated that more jobs may get reduced as well.
Co founder of Madmen, Adam Bierman said that Madmen has also reached the spot where many cannabis companies have been, he added that none of the firms are fully funded and that is the main reason for taking such drastic measures.
Other measures from Madmen include, divesting the licenses of unimportant operations, limiting new store opening, focusing on their best return investments in large cities, backing out of minority investments and selling off their interest in cannabis based tree house. These announcements have surfaced after they recently disclosed that they are pulling out of the acquisition of PharmaCann.