MedMen will let off around $ 21 Mn debt of PhramaCann, only if it will handover some of the cannabis facilities in Virginia and Illinois.
Amidst all the twists and turns, United States-based high-end cannabis retailer MedMen Enterprises called off their $682 Mn merger with PharmaCann, another company that provides top quality cannabis products. In October last year, MedMen announced its plan of acquisition of PharmaCann however, ever-changing industrial aspects have impelled both the companies to scrap the merger deal.
While informing about this decision CEO of MedMen, Adam Bierman said that there was tremendous evolution in the Cannabis sector since both the companies first announced its plan of merger. “Considering present macro-environment and opportunities lie ahead for our business, this decision of terminating merger is in the best interest of the shareholders of both companies. It would rather widen our reach,” stated Bierman in a press release.
What Termination Agreement Says?
According to termination agreement, MedMen will let off around $ 21 Mn debt of PhramaCann, only if it will handover some of the cannabis facilities in Virginia and Illinois along with licenses to MedMen which is pending for regulatory approval. “Considering the recent portfolio of PharmaCann, the facility of Illinois has turned up as the most lucrative opportunity for our long-term growth plan. It is a win-win situation for both- our company and shareholders,” said Bierman. The shares price, however, fell down around 20% after the news of termination of the deal broke.
Reportedly, one of the major reasons behind the fall off the share price is MenMen’s announcement regarding its decision of terminating CFO, Michael Kramer. Zeeshan Hyder, who served as MedMen’s Chief Corporate Development Officer will replace Kramer. In spite of these turns and twists in its operations and executive ranks due to termination of merger, MenMen claimed that it would remain on track to recover costs on an EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) by 2020 end.
MedMen owns nineteen Cannabis Facilities
The company operates and also owned 19 licensed facilities of cannabis in retail, cultivation, and manufacturing. MedMen trades on CSE (Canadian Securities Exchange). Earlier it has traded in the United States over-the-counter.