MedMen Runs From Florida
MedMen Enterprises Inc., which some say is the worst cannabis operator in America, is leaving Florida.
The cannabis retailer with operations across the United States, announced last week the close of a $67 million deal in which the company sold its Florida operations to Green Sentry Holdings.
The deal, which included MedMen’s licenses, dispensaries, inventory and cultivation operations, is comprised of $63 million in cash and approximately $4 million in liabilities to be assumed by the Florida-based Green Sentry. It also includes the license of MedMen’s trademarks in the state.
“We are pleased to announce the successful completion of this deal, particularly given the challenging economic environment we are operating in,” said Edward Record, chief executive of MedMen, in a statement. “The sale of MedMen’s Florida assets marks an important step in the company’s restructuring efforts designed to provide greater financial flexibility and a stronger, leaner operating structure – and ultimately put us on a path to being EBITDA positive.”
Perhaps if the founders of the company were more concerned with running the business than they apparently were with buying expensive cars and multi-million dollar homes, the company would be in better shape today.
Record added that the company is making strides to improve its relationship with partners and vendors, as well as increasing its support of social-equity initiatives. New York became the 15th state to legalize cannabis last year. MedMen intends to profit off of what could be a $7 billion market once fully established.
“We are focused on maximizing our existing footprint, including our operations in New York,” Record said in a release. “New York’s adult-use market will be game-changing for the entire industry, and we are considering all options to ensure strong shareholder return. This includes the potential sale of assets and/or licensing of the MedMen trademark.”
In February of last year, it was announced that Ascend Wellness Holdings company would acquire 86.7% of MedMen New York for $63 million; however, the deal was broken off earlier this month. That plan was delayed by a legal battle between the companies after Ascend filed a lawsuit against MedMen and accused the company of breaching the deal’s terms. In May the dispute was resolved when Ascend agreed to amend the acquisition to pay $88 million for a 99.99% stake in MedMen New York.
During a second-quarter earnings call on Aug. 15, Ascend co-founder and chief executive Abner Kurtin told investors that because of concerns about the status of MadMen’s assets, “which have deteriorated materially” since Dec. 31, Ascend is no longer moving forward with the transaction.
“We have been engaged in negotiations with MedMen for 17 months, and because of the state of MedMen’s assets it is time for all of us to move on,” Kurtin said on the call.
Despite the setback, MedMen also announced last week that it’s exploring strategic alternatives for New York, where the company operates a cultivation facility and four dispensaries under the state’s existing medical program. MedMen’s operational footprint is primed to benefit from the pending rollout of recreational sales in New York sometime next year.
Why anyone continues to do business with MedMen is beyond comprehension.