MedMen Signs Definitive Agreement For The Acquisition Of PharmaCann

CALIFORNIA: MedMen Enterprises and Chicago-based PharmaCann announce that they have entered into a definitive business combination agreement pursuant to which MedMen and PharmaCann will combine their respective businesses.

Under the Business Combination Agreement, a newly formed holding company (“New MedMen”) will acquire (a) all of the securities of PharmaCann in exchange for subordinate voting shares of New MedMen (the “New Class B Shares”) that are identical to the current Class B subordinate voting shares of MedMen, and (b) all of the Class B subordinate voting shares of MedMen in exchange for New Class B Shares on a one for one basis, pursuant to a plan of arrangement under the laws of British Columbia (the “Arrangement”). The securities to be issued in the Arrangement are intended to be eligible for exemption from the registration requirements under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”), in accordance with Section 3(a)(10) thereof. In addition, all of the Class A super voting shares of MedMen will be acquired by New MedMen in exchange for super voting shares of New MedMen (“New Class A Shares”) on a one for one basis, pursuant to the Arrangement.

Under the terms of the Business Combination Agreement, PharmaCann securityholders will be issued New Class B Shares of New MedMen such that following the issuance, the former PharmaCann securityholders will hold approximately 25 percent of the fully-diluted equity of New MedMen (calculated using the treasury stock method), with the majority of such shares to be subject to lock up agreements for a period of 6 months or 12 months from the completion of the Transaction.

Following the completion of the Transaction, current holders of Class B subordinate voting shares of MedMen will hold that number of New Class B Shares equal to the number of Class B subordinate voting shares of MedMen held immediately prior thereto. The terms of the New Class B Shares will be substantively and economically identical to the current MedMen Class B Shares. The Transaction is structured to include an exchange of the current MedMen shares and a new holding company in order to facilitate the tax efficient acquisition of PharmaCann under United States tax laws. Other than the change in the legal entity that is the parent company, which will continue to be incorporated in British Columbia, there will be no change to the substantive or economic rights of the holders of the current Class B subordinate voting shares of MedMen or the current Class A super voting shares of MedMen, as compared to the result if PharmaCann had been directly acquired by MedMen. MedMen shareholders that hold share certificates will need to deliver such certificates for exchange following the closing. All other MedMen shareholders will receive their New MedMen shares without any action on their part.

MedMen Doubles Market Reach With Acquisition Of PharmaCann

CALIFORNIA: MedMen Enterprises Inc. and Chicago-based PharmaCann have signed a binding letter of intent for MedMen to acquire PharmaCann in an all-stock transaction valued at $682 million.

The resulting pro-forma company (including pending acquisitions by MedMen) will have a portfolio of cannabis licenses in 12 states that will permit the combined company to operate 79 cannabis facilities. The combined company will operate in 12 states, which comprise a total estimated addressable market, as of 2030, of approximately $40 billion according to Cowen Group. Through the transaction, MedMen will add licenses in Illinois, New York, Pennsylvania, Maryland, Massachusetts, Ohio, Virginia and Michigan.

medmen“This is a transformative acquisition that will create the largest U.S. cannabis company in the world’s largest cannabis market,” said Adam Bierman, MedMen’s chief executive officer and co-founder. “The transaction adds tremendous scale to our vertically integrated business model by expanding our U.S. retail footprint across important growth markets while strengthening our cultivation and production capabilities. With the revenue synergies that the deal is expected to produce, MedMen is well positioned to continue executing on our growth strategy. This would not have been possible even two years ago and is a testament to how far both the industry and these two companies have evolved. PharmaCann’s leadership has built a world-class organization, and we are excited about the value this transaction is creating for shareholders.”

Founded in 2014, PharmaCann is one of the largest medical cannabis providers in the U.S. It currently operates 10 retail stores and three cultivation and production facilities across multiple states, including New York, Maryland and Massachusetts, and in Illinois, where it is the largest holder of medical cannabis licenses. The company also owns licenses for retail stores in Pennsylvania, Maryland, Massachusetts, Ohio, Virginia and Michigan, and cultivation and production licenses in all of its markets, excluding Maryland. PharmaCann is known for its high-quality cultivation and production and has one of the best track records in the industry for cannabis license applications.

“PharmaCann has built highly-efficient cultivation centers and dispensaries to promote a better quality of life for medical marijuana patients,” said Teddy Scott, Ph. D., PharmaCann chief executive officer. “This acquisition validates the dedication and level of sophistication we have used to provide consistent patient outcomes. I am proudest of the top-notch team we have assembled here and their dedication to our mission of serving medical marijuana patients. Our organization is a natural fit for MedMen, and we are excited to join a leading enterprise with a best-in-class management team.”

MedMen currently operates 14 retail stores in the primary markets of California, Nevada and New York. The Company recently acquired a license to open and operate 30 retail stores in Florida and has signed binding agreements to acquire an operating retail store in Illinois, cultivation and retail operations in Arizona, and an additional non-operating retail license in California. The Company has cultivation and production facilities in Nevada and New York, and is building facilities in Desert Hot Springs, California and outside Orlando, Florida. PharmaCann is licensed for 18 retail stores in eight states and eight cultivation and production facilities in seven states. Combined, the two companies will be licensed for 66 retail stores and 13 cultivation and production facilities (including pending acquisitions by MedMen).