MedMen, a Los Angeles-based multistate marijuana operator, announced that its blockbuster acquisition of PharmaCann has been scuttled and that the company will focus on beefing up its retail operations in California and other states.
MedMen also fired its chief financial officer, Michael Kramer, replacing him immediately with the company’s chief corporate development officer, Zeeshan Hyder.
The decision to terminate the planned $682 million all-stock transaction, first announced almost a year ago to the day, surprised observers since it came just one month after MedMen said both companies had complied with antitrust obligations under Hart-Scott-Rodino (HSR) requirements.
The announcement came a little less than a month after MedMen said the deal cleared a regulatory hurdle that moved the transaction closer to completion. The merger had been expected to close at the end of the year.
The scrapping of the MedMen-PharmaCann deal comes as more companies in North America's marijuana industry say they'll more focus more on profit and their existing businesses, after newly legal markets touched off an expansion race.
The absence of PharmaCann, either way, will deprive MedMen of a big anticipated increase in sales and size. MedMen in August reported preliminary fourth-quarter revenue of $42 million. PharmaCann would have added $17.5 million to the top line.