Ascend Wellness Reaches Settlement With MedMen To Acquire New York Assets

It appears that attempting to void a sale agreement with Ascend Wellness Holdings (CSE: AAWH.u) has worked out well for MedMen Enterprises (CSE: MMEN). The dispute, which relates to the sale of MedMen New York, has evidently ended in MedMen’s favor.

The dispute began at the start of January, when it Ascend claimed that MedMen was attempting to terminate the sale of its New York operations to them. Previously, it was agreed upon that Ascend would be acquiring MedMen New York for a figure of $73.0 million, which was to be paid in cash, and a promissory note.

MedMen however evidently had some degree of sellers remorse, and instead elected to dispute the regulatory approval of the transaction, which was made by the Office of Cannabis Management within the state. Two weeks after the dispute was made public, it was decided that the two were headed to court to settle the matter.

The matter appears to now be settled as of this morning, with it being announced that the two parties have entered into a term sheet to resolve the dispute. The sale is to proceed, although with a revised compensation structure.

As a means of achieving the settlement, Ascend will increase total consideration to be paid by $15.0 million, of which $4.0 million is part of an earn-out arrangement related to recreational sales being achieved. Total compensation for the purchase is now pegged at $88.0 million.

The revised transaction will see Ascend take a 99.99% stake in the entity, versus the previously agreed to 86.7% stake. Consideration will consist of $74 million to be paid at closing, which includes $63.0 million of the original transaction figure, as well as $11 million of the settlement arrangement.

$14 million meanwhile is set to be paid upon the first sale of recreational cannabis that occurs at a former MedMen dispensary in the state. No additional earn-outs are attached to the agreement.

The assets presently consists of four medical cannabis dispensaries as well as a cultivation facility.

Ascend Wellness last traded at US$3.02 on the CSE.


Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

Why This Gold Run Could Be Bigger | Roger Rosmus – Goliath Resources

Majors Don’t Want to Be Left Out of This Gold Run | Mike Bennett – Altamira Gold Corp

Gold Isn’t Slowing Down Anytime Soon!? | Terry Lynch – Power Metallic

Recommended

Sage Potash Outlines US$502 Million NPV For Flagship Sage Plains Project

Ontario MPP Removed From Caucus After Assault Charges

Related News

Medmen: Canaccord Reiterates $0 Price Target, Sell Rating

On December 7th, Medmen Enterprises’ (CSE: MMEN) reported first-quarter fiscal 2021 financial results. Medmen reported...

Wednesday, December 9, 2020, 10:50:51 AM

Ascend Wellness: Medmen Dispute “Is Nothing More Than A Case Of Sellers Remorse”

Ascend Wellness (CSE: AAWH) last night filed its motion to dismiss defendants counterclaims in its...

Tuesday, February 15, 2022, 03:53:25 PM

Is the End of the Line Near for MedMen?

It’s long been known by cannabis industry followers that MedMen Enterprises (CSE: MMEN) has a...

Tuesday, June 11, 2019, 07:30:12 AM

Tilray Sees Gotham Green Look To Sell Recently Acquired Shares

It appears that Gotham Green Partners has approximately zero interest in being a shareholder of...

Monday, September 20, 2021, 08:32:00 AM

Medmen Terminates PharmaCann Merger

Medmen Enterprises (CSE: MMEN) announced this morning that it will be terminating its merger agreement...

Tuesday, October 8, 2019, 08:59:05 AM