In a surprise move, Medmen Enterprises Inc (OTCMKTS:MMNFF) has announced the termination of the merger accord with PharmaCann. The deal is worth $682 million. According to Medmen, both the firms agreed to terminate the agreement mutually. In September 2019, Medmen announced that PharmaCann and Medmen have complied with the anti-trust obligations, which are mandatory under HSR requirements. The deal is expected to be closed by the end of this year.
Medmen to focus on retail operations
According to a communiqué from Medmen, the company would focus on retail operations in Nevada, Massachusetts, New York, Illinois, Florida, and California.
PharmaCann to transfer cannabis assets to Medmen
PharmaCann said it would transfer cannabis production, cultivation, related assets, and retail licenses in Virginia and Illinois to Medmen with no additional payments. It also surrenders a greater Chicago retail license to Medmen. However, Medmen should forego certain debts. PharmaCann carries out marijuana operations in New York, Massachusetts, and Maryland.
Greg Capelli, Executive Director of PharmaCann, said it marks a new beginning for the company and its shareholders. The company has tripled the revenues in the past 12 months through organic growth in Massachusetts, New York, and Illinois and by opening stores in Pennsylvania and Ohio. PharmaCann is also progressing on building cultivation/ processing sites in Pennsylvania, Massachusetts, and Ohio and expected to be operational next year.
PharmaCann is well-positioned to capitalize on recreational sales in Illinois. The company currently holds retail licenses for five cultivation/ processing facilities, 26 retail locations in 6 states.
Chief Executive Officer and founder of Medmen, Adam Bierman, said since the announcement of transaction in 2018, the cannabis sector evolved tremendously, and a lot of opportunities are expected in this area in the future. The company plans to deepen its focus on the business going forward.
Medmen replaces CFO
Medmen has replaced Michael Kramer, Chief Financial Officer, with Zeeshan Hyder, its Chief Corporate Development Officer. Kramer is in the present job at Medmen for less than a year. The company hired Kramer, who has extensive knowledge in corporate retail, to reduce spending at the corporate level.
Medmen would announce the financial results for FY 2019 and Q4 2019 on October 28, 2019.