MedMen, a Los Angeles-primarily based multistate marijuana operator, announced that its blockbuster acquisition of PharmaCann has been scuttled and that the organization will concentrate on beefing up its retail operations in California and other states.
MedMen also fired its chief economic officer, Michael Kramer, replacing him right away with the company’s chief corporate improvement officer, Zeeshan Hyder.
The selection to terminate the planned $682 million all-stock transaction, very first announced pretty much a year ago to the day, shocked observers considering that it came just a single month following MedMen stated each organizations had complied with antitrust obligations below Hart-Scott-Rodino (HSR) specifications and that the deal was now anticipated to close by the finish of this year.
“We fully grasp the have to have to pivot in a quickly evolving market, but this announcement comes as a surprise to us, specifically provided the timing of the HSR expiry press release issued much less than a month ago, which consisted of optimistic management commentary in regards to the deal’s prospects,” Vivien Azer, analyst at New York-primarily based Cowen, wrote in a study note.
MedMen stated the selection to scrap the acquisition was a mutual a single on the component of it and PharmaCann.
In a news release, MedMen stated the move will enable it to “deepen” its presence in the “core” retail markets of California, Illinois, Nevada, Florida, New York and Massachusetts.
According to the release, PharmaCann has agreed to transfer specific cannabis cultivation, production and retail licenses and associated assets in Illinois and Virginia to MedMen for “no added consideration from MedMen, other than the forgiveness of specific debt.”
PharmaCann also has marijuana operations in Maryland, Massachusetts and New York.
“The cannabis sector has evolved tremendously considering that we very first announced the PharmaCann transaction and primarily based on the existing macro-atmosphere and future possibilities that exist for our company, we think it is now in the very best interest of our shareholders to deepen, rather than widen, our company’s attain,” Adam Bierman, MedMen co-founder and CEO, stated in the news release.
MedMen trades on the Canadian Securities Exchange under MMEN.
For evaluation and in-depth appears at the investment trends and offers driving the cannabis market forward, sign up for our premium subscription service, Investor Intelligence.
Nick Thomas can be reached at [email protected]