The corporate, MedMen, mentioned that it has solely $15.6 million in money remaining versus $137.4 million in debt.

“The circumstances described above elevate substantial doubt with respect to the corporate’s potential to satisfy its obligations for no less than one yr,” the corporate mentioned in its submitting final week.

MedMen is simply the most recent of the one-time hashish darlings to face a reckoning because the trade bubble of 5 years in the past deflates attributable to extreme debt, falling marijuana costs, competitors from unlawful sellers, and excessive taxes. The truth, like in any retail enterprise, is that opening shops is dear and taking over debt is dangerous—at the same time as an rising variety of states legalize pot gross sales.

MedMen, based mostly close to Los Angeles, operates 23 shops together with in California, New York, and Illinois. In an effort to chop prices, it offered its shops in Florida final yr, is making an attempt to promote its New York shops, and can also be trying to renegotiate leases for the shops that stay.

The corporate has already defaulted on a few of its debt, the submitting mentioned, and that it must get hold of an extension or to refinance it.

In 2018, MedMen went public on the Canada Inventory Change by means of a reverse merger amid a wave of hashish companies. Early on, its shares rose to over $8, however at this time its inventory trades for simply 4 cents.

Shares in different pot-related corporations have additionally suffered because the hashish enterprise misplaced its luster with traders. Inventory of Tilray Manufacturers, a hashish producer that’s among the many trade’s largest corporations, is down greater than 90% from its all-time excessive, for instance, whereas Cover Development, one other main participant, is down an identical quantity.