MedMen Doubles Market Reach with Acquisition of PharmaCannSource: Business Wire
MedMento acquire PharmaCann in all-stock transaction valued at US$682 million, the largest acquisition transaction in U.S. cannabis history.
The acquisition doubles the number of states where
MedMenhas licenses to 12.
The combined addressable market in these 12 states accounts for
over 50 percent of the total estimated 2030 U.S. addressable market of
$75 billion, according to Cowen Group.
MedMenand PharmaCann would be licensed for 66 retail stores and 13 cultivation and production facilities, including pending acquisitions by MedMen.
- PharmaCann unitholders will own approximately 25 percent of the pro-forma company, on a fully-diluted basis, at closing.
All dollar values are in U.S. dollars, unless otherwise noted.
The resulting pro-forma company (including pending acquisitions by
“This is a transformative acquisition that will create the largest U.S.
cannabis company in the world’s largest cannabis market,” said
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
“PharmaCann has built highly-efficient cultivation centers and
dispensaries to promote a better quality of life for medical marijuana
|Retail||48||18 retail in 8 states||66|
|Cultivation & Production||5||8 cultivation/production in 7 states||13|
|States||CA, NV, NY, IL, AZ, FL||NY, IL, MA, MD, MI, VA, OH, PA||79|
Creates Largest U.S. Cannabis Companyby Market Reach with Best-in-Class National Footprint: The acquisition expands MedMen’s retail reach to a total of 12 states and gives the Company the ability to leverage the national brand equity it has built with its existing high-profile locations, such as Beverly Hills, Las Vegas and Manhattan’s Fifth Avenue.
Strengthens Cultivation and Production Capabilities: Upon
closing of the transaction,
MedMenwill have over 800,000 square feet of planned cultivation and production capacity in supply-constrained markets. The added capacity allows MedMento accelerate the launch of its in-house [statemade] brand and to distribute its partner brands nationally. The combined company will be vertically-integrated in all markets in which it operates, with the exception of Maryland.
Enhanced Infrastructure for Growth Initiatives: The combined
platform bolsters MedMen’s infrastructure on the
East Coastand Midwest to continue M&A and license application efforts in new attractive cannabis markets across the U.S.
- Revenue Synergies: Optimization of real estate strategy and product mix in stores has the potential to increase store traffic and basket sizes. The transaction capitalizes on MedMen’s retail brand reputation and PharmaCann’s added reach and production capabilities.
- Accretive to MedMen’s Wellness Platform: PharmaCann’s progress in medical-only markets will add further credibility to MedMen’s existing recreational-focused wellness platform.
Based on the closing price of the Company’s Class B Subordinate Voting
Shares as of
The transaction is subject to regulatory approvals by various local and state authorities in each of the markets where PharmaCann’s assets and licenses are held, all debt of PharmaCann being repaid and other customary closing conditions.
The letter of intent is fully binding and subject to contractual obligation.
The Board of Directors of both
Cautionary Note Regarding Forward-Looking Information and Statements
This press release contains “forward-looking statements” and
“forward-looking information” within the meaning of applicable
securities laws (collectively, “forward-looking information”) with
respect to the Company, including, but not limited to: information
concerning the completion and timing of the completion of the
contemplated acquisition of
Forward-looking information is not a guarantee of future performance and is based upon a number of estimates and assumptions of management at the date the statements are made including among other things assumptions about: the contemplated acquisition being completed on the current terms and current contemplated timeline; development costs remaining consistent with budgets; favorable equity and debt capital markets; the ability to raise sufficient capital to advance the business of the Company; favorable operating conditions; political and regulatory stability; obtaining and maintaining all required licenses and permits; receipt of governmental approvals and permits; sustained labor stability; stability in financial and capital goods markets; favourable production levels and costs from the Company’s operations; the pricing of various cannabis products; the level of demand for cannabis products; and the availability of third party service providers and other inputs for the Company’s operations. While the Company considers these assumptions to be reasonable, the assumptions are inherently subject to significant business, social, economic, political, regulatory, competitive and other risks and uncertainties, contingencies and other factors that could cause actual performance, achievements, actions, events, results or conditions to be materially different from those projected in the forward-looking information. Many assumptions are based on factors and events that are not within the control of the Company and there is no assurance they will prove to be correct.
Furthermore, such forward-looking information involves known and unknown
risks, uncertainties and other factors which may cause the actual plans,
intentions, activities, results, financial position, performance or
achievements of the Company to be materially different from any future
plans, intentions, activities, results, financial position, performance
or achievements expressed or implied by such forward-looking
information. Such factors include, among others: the ability to
consummate the proposed acquisition; the ability to obtain requisite
regulatory approvals and third party consents and the satisfaction of
other conditions to the consummation of the proposed acquisition on the
proposed terms and schedule; the potential impact of the announcement or
consummation of the proposed acquisition on relationships, including
with regulatory bodies, employees, suppliers, customers and competitors;
the diversion of management time on the proposed acquisition; risks
relating to cannabis being illegal under US federal law and risks of
federal enforcement actions related to cannabis; negative changes in the
political environment or in the regulation of cannabis and the Company’s
business; risks relating to lack of banking providers and
characterization of the Company’s revenue as proceeds of crime as a
result of anti-money laundering laws and regulation; the costs of
compliance with and the risk of liability being imposed under the laws
the Company operates under including environmental regulations; negative
shifts in public opinion and perception of the cannabis industry and
cannabis consumption; risks that service providers may suspend or
withdraw services; the limited operating history of the Company;
reliance on the expertise and judgement of senior management of the
Company; increasing competition in the industry; risks related to
financing activities, including leverage; risks related to the
management of growth; increased costs related to the Company becoming a
publicly traded company; risks inherent in an agricultural business;
adverse agricultural conditions impacting cannabis yields; risks
relating to rising energy costs; risks of product liability and other
safety related liability as a result of usage of the Company's cannabis
products; negative future research regarding safety and efficacy of
cannabis and cannabis derived products; risk of shortages of or price
increases in key inputs, suppliers and skilled labor; a lack of reliable
data on the medical and adult-use cannabis industry; loss of
intellectual property rights or protections; cybersecurity risks;
constraints on marketing products; fraudulent activity by employees,
contractors and consultants; tax and insurance related risks; risk of
litigation; conflicts of interest; compliance with extensive government
regulation; changes in general economic, business and political
conditions, including changes in the financial markets; as well as those
risk factors discussed in the Company’s Listing Statement filed on SEDAR
MedMen Enterprises Inc.
INVESTOR RELATIONS CONTACT:
Stéphanie Van Hassel
Head of Investor Relations