EX-L.A. MAYOR ON POT FIRM’S BOARD
Antonio Villaraigosa will help guide MedMen’s expansion, social equity efforts.
Former Los Angeles Mayor Antonio Villaraigosa is joining the board of publicly traded cannabis company MedMen, marking his return to the business world after a resounding defeat in June’s Democratic gubernatorial primary.
MedMen — a Culver City company that operates high-end cannabis shops in California, Nevada and New York and has aggressive expansion plans — announced Villaraigosa’s appointment Wednesday morning. Villaraigosa adds political and governmental experience to a board made up of branding, entertainment and accounting executives.
Other recent additions to the company’s board include Stacey Hallerman, a former executive at the conglomerate that owns luxury brands Montblanc and Cartier, and Jay Brown, chief executive of Roc Nation, the entertainment company co-founded by Shawn “Jay-Z” Carter.
In a statement announcing the appointment, MedMen Chief Executive Adam Bierman called Villaraigosa an experienced, connected leader who will help the cannabis company continue to expand.
“Few people understand Los Angeles and our home state better than Mayor Villaraigosa,” Bierman said. “He will be instrumental in guiding MedMen’s expansion in the Golden State, and through his broad network, Mr. Villaraigosa will help MedMen solidify its presence across the country.”
The former mayor told the Los Angeles Times in an interview Wednesday that he hopes to use his political connections and his new role with MedMen to advocate for effective social equity programs, which, like other cannabis policies, have yet to be fully implemented.
Such programs adopted by Los Angeles and other cities offer preferential permitting and other assistance to entrepreneurs previously charged with marijuana-related crimes or from neighborhoods disproportionately affected by marijuana arrests.
“I have a relationship with those communities that’s as strong as anyone’s,” Villaraigosa said. “I understand the goal [of social equity]; I’ve supported it from the beginning. But we’ve got to make it work. Right now, a lot of what we have is doodles on paper.”
MedMen has been expanding its board since going public this year to help fund its expansion amid stiff competition.
Its stock is traded on Toronto’s Canadian Securities Exchange, which has become a haven for cannabis companies seeking public status.
This month, Constellation Brands Inc. — an alcoholic-beverage company whose holdings include Corona beer, Robert Mondavi wine and hard liquor brands — announced it will spend about $3.8 billion to boost its stake in Canopy Growth Corp., a Canadian grower betting on full legalization of pot sales in the United States and other international markets.
Businesses have often turned to Villaraigosa when they needed a friendly public face.
Downtown L.A. supplement company Herbalife hired him as an advisor amid long-running accusations that it was a pyramid scheme targeting poor and minority victims. Santa Ana lender Banc of California hired him when it was looking to make inroads in the Latino community; he later helped negotiate a deal that eased tensions between the bank and community groups.
Bierman said he hopes Villaraigosa can play a similar role as mediator between the cannabis industry and city hall, especially when it comes to social equity programs. Bierman suggested that such programs could prove burdensome to businesses — an outcome MedMen wants to avoid.
“In his life, he’s been a mediator and a conduit for compromise,” he said. “How do you make sure a social equity program is created and exists in L.A that is the gold standard, while also ensuring commercial viability?”
MedMen was one of the few cannabis companies that backed Villaraigosa’s gubernatorial campaign. The company gave $29,200 — the legal limit — to the campaign, though it also donated that amount to Democratic nominee and cannabis-industry favorite Gavin Newsom, state records show.
Villaraigosa is not the first big-name politico to get into the cannabis business. This year, former House Speaker John A. Boehner, an Ohio Republican, joined New York cannabis company Acreage Holdings as an advisor. Former Massachusetts governor and Libertarian Party vice presidential nominee William Weld is also an Acreage advisor.
Villaraigosa has a mixed record on cannabis issues. As mayor, he sought to limit the number of medical marijuana dispensaries in the city, but he endorsed the 2016 state ballot measure, Proposition 64, that legalized the sale of cannabis to adults age 21 and older.
Villaraigosa, 65, said he smoked cannabis in his youth — “I grew up in the 1960s; everybody in my neighborhood did” — but hedged on whether he’s done so more recently. “I’m not aware of all the new products out there,” he said.
MedMen spokesman Daniel Yi said he could not disclose the compensation package for Villaraigosa and other new board members. Those details should be made public in the coming weeks in a securities filing.
MedMen operates 14 cannabis shops in Southern California and Nevada, with a focus on high-end, high-visibility shopping districts.
It has a store on New York’s famed Fifth Avenue, Robertson Boulevard in West L.A., Abbot Kinney in Venice and a redeveloping stretch of Broadway in downtown Los Angeles.
Bierman told The Times this year that the company wants to open more stores in similarly high-profile locations in the United States and eventually around the world.
“How do you become the trusted brand in the hearts and minds of the marijuana users of tomorrow? You do it on Fifth Avenue, you do it in Beverly Hills,” he said.