MedMen-Related Legal Complaint Fixes the Lost Value of Federal Reform "in Excess of $1 Billion"*

The complaint for damages and demand for jury trial filed on December 31, 2025, alleges breach of fiduciary duty, aiding and abetting breach of fiduciary duty and civil conspiracy

For most plant-touching businesses, figuring out how President Trump’s recent executive order on cannabis reclassification might realistically affect their bottom line is an exercise in futility. That’s because if the move from Schedule I to Schedule III at the federal level actually does happen — and, all optimism aside, that’s still a mighty big if — when the shift happens, and what the legal landscape and business climate look like at the time, make the future feel as cloudy as a hotboxed VW Bus.

But MedMen — the once high-flying coast-to-coast dispensary chain that flew too close to the sun before flaming into a cautionary tale in 2024 — wasn’t like most plant-touching businesses when it was a going concern. And it still isn’t today, as what’s left of it lumbers along in receivership. That’s because, according to a complaint for damages and jury trial filed Dec. 31, 2025, in Los Angeles County Superior Court, the damages it suffered by not surviving to see federal reclassification were “in excess of $1 billion.”

If that number sounds like the kind of loss you’d associate with a failed movie studio tentpole or a late-stage crypto implosion, that’s the point. MedMen once marketed itself as “the Apple Store of weed,” and, for a brief, heady moment in the late 2010s, the market played along. At its peak, as the complaint notes, the brand operated dozens of gleaming glass and red-walled storefronts across seven states, had licenses that could have expanded it to 65 retail locations and had a public market capitalization of roughly $3 billion in October 2018.

The new lawsuit alleges a story arc that’s a departure from the well-worn grew-too-big-too-fast narrative, involving conflicts of interest, a battle for control waged from the inside and something called the “option value” of federal reform — the long-promised payday that would arrive when Washington finally loosened the choke collar on cannabis.

In the suit, the plaintiff is MMIRF, LLC, an entity that says it is asserting claims assigned from the receivership estate of MM Can USA, Inc. (MMUSA), MedMen’s former U.S. operating subsidiary, through receiver Richard Ormond. The defendants include Tilray Brands, Inc., Serruya Private Equity Inc., Superhero Acquisition Corp., Superhero Acquisition L.P., and several individuals: Tilray CEO Irwin Simon, Tilray executive Denise Faltischek, and Michael Serruya, who served as MedMen’s chairman and CEO from 2021 until the receivership began in 2024.

The claims are blunt and sweeping: breach of fiduciary duty, aiding and abetting breach of fiduciary duty, and civil conspiracy — all tethered to a core allegation that the defendants “abused their control” of MedMen after taking the reins in 2021 and made corporate decisions designed to benefit themselves at MedMen’s expense. The suit seeks actual damages “believed to exceed $1 billion,” punitive damages and a jury trial.

At the center of the complaint is the notion that the company’s true value was locked behind a federal door — a door that could swing open with rescheduling, descheduling, or some other regulatory shift that allows normal banking, uplisting on major U.S. exchanges and interstate commerce. The complaint argues MedMen built that “option value,” and that the defendants effectively took it for themselves by driving the company into collapse before the payoff could arrive.

According to the complaint, MedMen entered the 2020s in financial distress, bleeding from rapid expansion, heavy capital expenditures, and a debt structure that came with sharp edges. By early 2020, it had pushed out co-founder Adam Bierman as CEO, brought in restructuring executive Tom Lynch of SierraConstellation Partners, and worked with Moelis & Co. on a turnaround plan intended to buy MedMen time — years of it — to survive long enough to see federal change.

The plan, as described, had three prongs: sell MedMen’s money-losing New York business; restructure debt associated with a Gotham Green Partners credit facility; and shore up capital through additional investment. If executed, the complaint claims, the plan would have taken MedMen to break-even by mid-2022 and kept it operating without new capital through at least 2028 — a seven-year runway to wait out Washington.

In February 2021, MedMen entered a purchase agreement with Ascend Wellness Holdings to sell the New York assets for up to $73 million, the complaint says, with proceeds intended to retire an $80 million loan secured by those New York assets — a loan that had already been amended multiple times to avoid default.

Then came the restructuring deal. Tilray, a Canadian cannabis company listed on NASDAQ, that could not directly acquire MedMen’s U.S. plant-touching operations due to U.S. law and exchange rules. The complaint contends Tilray instead funded the purchase of a controlling stake in MedMen’s senior secured debt through a limited partnership structure managed by Serruya (the “Superhero” entities), while Serruya Private Equity led and backstopped a $100 million private placement of convertible equity in MedMen. Serruya then gained a board seat and later became chairman and CEO.

From there, the suit alleges, what was nominally debt investment became de facto control. Tilray executives were installed into key MedMen roles, including CFO and head of information systems, the complaint says, giving Tilray access to MedMen’s internal financial and operational data. Tilray executives also served as board observers, entitled to participate in discussions and review materials, though not vote.

And, critically, the lawsuit claims the new power structure “torpedoed” the Ascend deal to sell New York — the deal the prior board-approved turnaround plan treated as essential. MedMen issued a notice terminating the New York sale on Jan. 2, 2022, according to the complaint, which alleges Ascend was ready to close and that state regulatory approval had been obtained. The termination, the lawsuit argues, was the domino that knocked down the rest of the plan: without that sale, MedMen could not pay off the New York-secured loan at maturity; Ascend initiated arbitration; market conditions deteriorated; and later attempts to revive the deal fell apart.

By the complaint’s telling, the endgame was predictable and brutal. With bankruptcy in federal court unavailable to plant-touching cannabis businesses, MMUSA entered a California receivership in April 2024. Through that liquidation process, the lawsuit alleges, Tilray — through the Superhero entity — ultimately acquired MedMen’s remaining assets via a credit bid, leaving the receivership estate primarily with litigation claims against third parties.

The new suit argues those claims are worth more than a billion dollars because MedMen, had it not been “robbed” of its runway, would have lived long enough to cash in on federal reform — reform that the complaint ties to President Trump’s December 2025 executive order directing reclassification of cannabis from Schedule I to Schedule III.

Of course, the filing of the complaint is merely the opening salvo in what will no doubt be a very protracted legal wrangling. (According to the L.A. Superior Court’s website, a case management conference is next on the docket and scheduled for April 30, 2026.) But there’s no small amount of irony in the fact that MedMen, which has come to symbolize Big Weed Gone Bad for so many, might have, by asking for damages in the billion-dollar ballpark, incidentally lit the fuse on a realistic discussion on the dollars and sense of meaningful movement at the federal level.

*[Updated 01/12/2025, 10:05 a.m.: The headline on an earlier version of this post incorrectly stated that MedMen’s receiver filed the Dec. 31, 2025, legal complaint seeking over a billion dollars in damages. The suit was actually filed by a third party — MIRF, LLC — and the Receivership Estate will receive 20% of any net recovery should MMIRF, LLC prevail.]