Adam Biermen and his super voting shares are no longer in charge at MedMen, which means the dilution of common shares might finally stop. But it remains to be seen if a new CEO can stop the bleeding and turn the business to create value for existing equity holders.
Though he stepped down as chief executive, Bierman will maintain his position on the board of directors.
His super voting shares should go away in December 2020, which would benefit Class B common shareholders, because economic and financial incentives will finally be equalized between them and those in control.
Super voting shares provide holders with voting rights larger than their financial interests, and the misalignment of control and economics can lead to those in control to favor their own interests ahead of common shareholders’ interests.
In the case of MedMen, Bierman’s and Andrew Modlin’s 1,000:1 super voting shares meant additional share dilution never threatened their control of the company, as the total shares outstanding have ballooned to 607 million to 620 million, by our estimates.