The Weed Apple Store 🔥

How MedMen's valuation went from $3B to 0.                                                                                                                                                                                                                                                                                                                                                                                                                 [Read Online]( The Failure of the Apple Store of Weed How MedMen's valuation went from $3B to 0. [Nicolás Cerdeira]( [fb]( [tw]( [in]( [email](mailto:?subject=Post%20from%20Failory&body=The%20Failure%20of%20the%20Apple%20Store%20of%20Weed%3A%20How%20MedMen%27s%20valuation%20went%20from%20%243B%20to%200.%0A%0Ahttps%3A%2F%2Fnewsletter.failory.com%2Fp%2Ffailure-apple-store-weed) Hey — It’s Nico. Today’s issue takes 6 minutes to read. If you only have one, here are the five main things: - [Cannabis retailer MedMen files bankruptcy]( (read why below). - [Peloton lays off 400 employees]( and CEO resigns. - [Wayve](, [Bolt]( and [Indicium]( raise new rounds of funding. - A travel startup shares [how they grew x60 in one year](. - ex-CEO of Github [opens a Twitter thread]( to brainstorm AI product ideas people would pay for (find my selected ideas below). Let’s get into it. This Week In Startups 🔗 Resources Travel startup shares [lessons from its x60 growth journey](. How FlowMapp [used 0 marketing to grow to 320K users](. Nathan Barry, Nick Huber, and others [discuss 6 keys to building a $40M business](. A guide to [pricing early-stage B2B software products](. Why you should [stop looking for a technical cofounder and become one yourself](. 📰 News [ICONIQ Growth raises $5.75 billion]( across two funds for tech investments. [Peloton lays off 400 employees]( as the CEO quits. [Underscore VC raises $58M]( to invest in early-stage B2B software products. Autonomous driving startup [Luminar lays off 20 percent of its workforce](. [DocuSign acquires AI agreement management software Lexion]( for $165M. 💸 Fundraising [Wayve secures $1B from SoftBank]( to share its self-driving tech with other car makers. [Bolt raises €220M]( in credit as it prepares for IPO. Data and AI consultancy [Indicium raises $40M for US expansion](. AI-powered promotion startup [Monocle emerges from stealth with $7.5M](. Fail(St)ory The Apple Store of Weed When California legalized recreational cannabis use in 2016, MedMen was among the pioneering companies to enter this emerging market. Adam Bierman, cofounder of MedMen, wanted to completely redefine what a drug store could look like. Imagine stepping into a cannabis shop. What comes to mind? If your mind conjures a dimly lit space adorned with bongs, jars of marijuana, and cannabis leaves plastered on the walls, then you probably haven't been to a MedMen store. Bierman revolutionized the cannabis retail aesthetic by introducing spacious stores, minimalist design elements, and sophisticated branding reminiscent of Apple stores. It is no wonder that people quickly started to refer to MedMen as the Apple store of weed. This strategy was successful, and in 2018, Medmen went public, reaching a peak valuation of $3B. They expanded quickly, opening new stores in seven states, including one on Fifth Avenue, and hiring over 1,300 people. However, after four years of struggling to achieve profitability, [MedMen declared bankruptcy last week](. Reasons For Failure - Overspending: In order to fuel their expansion, MedMen acquired hundreds of millions of dollars in debt, using it to establish 25 branches, including the high-cost Fifth Avenue location. Additionally, they allocated significant funds towards lobbying efforts to influence regulations in states like Florida and New York. Moreover, substantial investments were made in marketing campaigns aimed at destigmatizing marijuana, highlighted by an [advertisement directed by award-winning filmmaker Spike Jonze](. - Regulations: Despite the legalization of cannabis in certain states, it remains federally illegal, leading to strict regulations for businesses operating in this sector. Moreover, laws vary from state to state, and because the cannabis industry is still relatively new, these regulations are subject to frequent changes. For instance, in Florida, advertising for weed stores is prohibited. When MedMen opened its store in Key West, regulators raised concerns that passersby could view the products through the window, which was deemed as advertising. Consequently, MedMen was required to frost their windows to comply with regulations. - Taxes: Another consequence of cannabis being federally illegal is that businesses in this sector can not deduct their business expenses, such as employee salaries, from their taxes. Essentially, this results in cannabis retailers facing an effective tax rate that can soar [as high as 80%](. - Lawsuits: MedMen was [sued several times](. In 2018, MedMen workers sued the company, alleging [MedMen had violated labor laws](. In 2019, MedMen was sued for breaching its fiduciary duty as a public company. That same year, another suit alleged that Bierman was using company money to pay for personal expenses like his marriage counselor. Bierman was forced out of the company in 2020 after new lawsuits accused him of [saying racial slurs to an LA city councilman](. The Future of the Cannabis Industry MedMen’s case shows that the Cannabis industry is still full of complications. However, numerous bills have been proposed at both federal and state levels that could deregulate the cannabis industry, potentially enhancing its profitability. For example, the [Marijuana 1-to-3 Act of 2023]( aims to reclassify marijuana from a Schedule I controlled substance to a Schedule III controlled substance. This reclassification would simplify operations within the industry, as Schedule III substances are subject to fewer regulations compared to Schedule I drugs. Moreover, it could lead to significant tax reductions for cannabis companies, enabling them to deduct expenses from their taxes. Furthermore, the support for legalizing marijuana has reached a [record high of 70%](. When you also consider that currently, over 50% of Americans report having tried marijuana, and 17% smoke it regularly, it becomes evident that the cannabis industry still has ample room for growth. Go Deeper - This [deep-dive into MedMen and Adam Bierman](. - The [state of federal cannabis legislation](. - How the [cannabis industry is performing](. Your Next Startup A Thread Full of AI Ideas Last week, Nat Friedman, ex-CEO of Github, asked people on Twitter for AI products that don’t exist but that they would pay for. The tweet went viral and received tons of really interesting ideas. Let’s look at some of them. [tw profile: Nat Friedman] Nat Friedman @natfriedman [tw] What AI product – that can be built today but for some strange reason doesn't exist yet – would you pay for right now? Preference for B2B answers! Apr 29, 2024 1.27K Likes 73 Retweets 364 Replies FBAR compliance in a box [tw profile: Patrick McKenzie] Patrick McKenzie @patio11 [tw] Replying to@natfriedman “FBAR compliance in a box” is almost embarrassing in not existing. Niche need, where niche is a few million Americans and probably half+ of the client base of private banks. Apr 30, 2024 167 Likes 2 Retweets 14 Replies Patrick McKenzie's suggestion is an AI that helps users fill their yearly Reports of Foreign Bank and Financial Accounts (FBAR). This might seem niche, but I think that focusing the AI on a single type of report is clever, as it improves the odds of the AI actually being helpful and reduces the risks of errors or hallucinations. All-in-One Audio Digest [tw profile: Ryan Delk] Ryan Delk @delk [tw] Replying to@natfriedman Ingest all relevant inputs (slack, email, whatsapp, etc.), pop in Airpods each morning, get ~10 min audio digest of what's important, take (small) actions conversationally during digest, start each day knowing where to dive in. Apr 30, 2024 487 Likes 0 Retweets 29 Replies Ryan Delk, CEO of Primer, proposes an AI capable of aggregating messages from various sources and condensing them into a concise 10-minute audio briefing. I think that, if done correctly, the potential utility of such an AI like is evident. Personally, I know that having a summary of all my emails would save me a lot of time in the morning, enabling me to kickstart my day earlier. Also, receiving the summary in audio format aligns well with multitasking during one's morning routine, ensuring access to pertinent information while engaged in other activities. Personal Money Manager Auto Categorizer [tw profile: David Aronchick] David Aronchick @aronchick [tw] Replying to@natfriedman Expense / personal money manager auto categorizer Apr 30, 2024 16 Likes 0 Retweets 3 Replies David Aronchick, CEO of expanso, would like an AI that auto-categorizes all his spending. It is a bit niche but also a very simple AI that could save a lot of time. Everyone tells you to track your expenses, and I agree. Being able to see where your money is going after each month can be very enlightening and help you save money. However, categorizing each expense is a pain. Most expense trackers nowadays have ways of automating this process, but they rarely cover all scenarios, so you end up with a lot of uncategorized data. An LLM could easily fix this problem. AI for BI [tw profile: Jp Marín Díaz] Jp Marín Díaz @jpmarindiaz [tw] Replying to@natfriedman AI BI replacement to tableau, qlik view, power bi and friends. Ask questions, get charts from your own data Apr 30, 2024 33 Likes 0 Retweets 13 Replies Marin Diaz suggests an AI that can replace Tableau and Power BI. This could potentially save a lot of time, helping companies get the KPIs they need in an easier way. We know AI is capable of doing data analytics. GPT-4 and its Code Interpreter are great at understanding what KPIs the user wants and finding them in a dataset. This functionality could be expanded and made easier to use for the average user. Ideally, this AI would not only help you find your desired KPIs, but also suggest what indicators you should consider from looking at your data. Refer Failory, Get Rewards Share Failory Chances are you have some more friends who would enjoy Failory as much as you do. Share Failory with these friends and cash in on premium resources and swag. You currently have 0 referrals, only 1 away from receiving my Pitch Deck Airtable. [Share Failory →]( Or copy and paste this link to others: Help Me Improve Failory How Was Today's Newsletter? If this issue was a startup, how would you rate it? [🚀 Launches to the moon!]( [🤔 Room for a pivot]( [💀 Crashes and burns]( That's all of this edition. Cheers, Nico Update your email preferences or unsubscribe [here]( © 2024 Failory 1309 Coffeen Avenue Ste 1200, Sheridan, Wyoming 82801, United States of America [[beehiiv logo]Powered by beehiiv](