Medmen Terminates PharmaCann Merger

Medmen Enterprises (CSE: MMEN) announced this morning that it will be terminating its merger agreement with that of PharmaCann, a multi state operator with operations across six states. Medmen indicating that it was terminating the deal as it did not provide enough shareholder value given current market conditions.

The definitive agreement to merge was initially announced on December 24, 2018, by Medmen and PharmaCann, and had yet to consumate as a result of regulatory hurdles experienced within multiple states. Additionally addled by federal involvement in relation to antitrust issues, the merger was the subject of a second request by the Department of Justice. PharmaCann and Medmen had both announced on September 11, 2019, that the associated waiting period had passed, and thus investors were waiting on the final announcement of the deal closing.

It was originally anticipated that PharmaCann would take in consideration of the transaction 168.4 million shares of Medmen Enterprises. However, the value of those shares has since plummeted as market conditions turned against the sector in general, and concerns arose about excessive spend by members of Medmen management.

In announcing the termination of the agreement, Medmen stated several justifications for the cancellation of the deal that investors had been waiting to see close, including:

  • The HMMJ index being down 47% since initial announcement of the deal, citing capital access issues as a result.
  • High capital expenditures to develop PharmaCann assets.
  • A renewed focus on California where it wishes to penetrate its market presence on a deeper level.
  • The closing timeline for the agreement was significantly impacted by regulatory hurdles, despite receiving the green light from the Department of Justice.
  • A focus on current core markets will provide more shareholder value than that of a breadth approach to the market.

As part of the termination of the merger agreement, Medmen has acquired an operational cultivation facility and dispensary in Illinois, along with a second retail license in the state and a license for a vertically integrated facility in Virginia. This is a result of the US$21 million owed to Medmen Enterprises by PharmaCann as a result of a previously issued loan.

In conjunction with the termination of the PharmaCann arrangement, Michael Kramer has been replaced as Chief Financial Officer at Medmen. Chief Corporate Development Officer Zeeshan Hyder will be taking on the role in his place. Kramer will stay on with the firm as a consultant for the remainder of the year.

Medmen Enterprises closed yesterdays session at $2.29.


Information for this briefing was found via Sedar and MedMen Enterprises. The author has no 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

New Found Gold: The Strategic Maritime Resources Purchase

Amex Exploration: Revised Perron PEA Has INSANE Economics

Aris Mining: The Multi Billion Dollar Soto Norte PFS

Recommended

Canadian Copper Secures $8 Million Lead Order From Ocean Partners As Part Of Larger Funding Round

Northern Superior Expands Philibert With 350 Metre Step Out Testing 1.10 g/t Gold Over 25.5 Metres

Related News

Canaccord Drops Medmen Price Target To $0.00, Reiterates Sell Rating

After Medmen Enterprises’ (CSE: MMEN) fourth-quarter results dropped after hours on October 15th, Canaccord downgraded...

Friday, October 16, 2020, 12:22:53 PM

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

Medmen Sees At Least Two LA Dispensaries Looted In Riots

It appears that the ongoing riots throughout the USA have not been kind to a...

Sunday, May 31, 2020, 10:14:17 AM

Medmen Announces Layoffs, Divestment of Assets, Focus on SG&A Reduction

Medmen Enterprises (CSE: MMEN) will be the next cannabis firm to conduct layoffs in the...

Friday, November 15, 2019, 04:38:02 PM

Adam Bierman Resigns As CEO of Medmen Enterprises

It appears to be the end of an era. Medmen Enterprises (CSE: MMEN) this morning...

Friday, January 31, 2020, 08:40:35 AM