Medmen to acquire PharmaCann for $682-million
Marijuana player’s takeover takes aim at U.S. market
MEDMEN Enterprises Inc. and Chicago-based PharmaCann LLC have signed a binding letter of intent for Medmen to acquire PharmaCann in an all-stock transaction valued at $682-million.
The resulting pro forma company (including pending acquisitions by Medmen) will have a portfolio of cannabis licences in 12 states that will permit the combined company to operate 79 cannabis facilities. The combined company will operate in 12 states, which com prise a to tal estimated addressable market, as of 2030, of approximately $40-billion according to Cowen Group. Through the
transaction, Medmen will add licences in Illinois, New York, Pennsylvania, Maryland, Massachusetts, Ohio, Virginia and Michigan.
“This is a transformative acquisition that will create the largest U.S. cannabis company in the world’s largest cannabis market,” said Adam Bierman, Medmen’s chief executive officer and co-founder. “The transaction adds tremendous scale to our vertically integrated business model by expanding our U.S. retail footprint across important growth markets while strengthening our cultivation and production capabilities. With the revenue synergies that the deal is expected to produce, Medmen is well positioned to continue executing on our growth strategy. This would not have been possible even two years ago and is a testament to how far both the industry and these two companies have evolved. PharmaCann’s leadership has built a world-class organization, and we are excited about the value this transaction is creating for shareholders.”
Founded in 2014, PharmaCann is one of the largest medical cannabis providers in the United States. It currently operates 10 retail stores and three cultivation and production facilities across multiple states, including New York, Maryland and Massachusetts, and in Illinois, where it is the largest holder of medical cannabis licences. The company also owns licenses for retail stores in Pennsylvania, Maryland, Massachusetts, Ohio, Virginia and Michigan, and cultivation and production licences in all of its markets, excluding Maryland. PharmaCann is known for its high-quality cultivation and production, and has one of the best records in the industry for cannabis licence applications.
“PharmaCann has built highly efficient cultivation centres and dispensaries to promote a better quality of life for medical marijuana patients,” said Dr. Teddy Scott, PhD, PharmaCann chief executive officer. “This acquisition validates the dedication and level of sophistication we have used to provide consistent patient outcomes. I am proudest of the top-notch team we have assembled here and their dedication to our mission of serving medical marijuana patients. Our organization is a natural fit for Medmen, and we are excited to join a leading enterprise with a best-in-class management team.”
PharmaCann is licensed for 18 retail stores in eight states and eight cultivation and production facilities in seven states. Combined, the two companies will be licensed for 66 retail stores and 13 cultivation and production facilities (including pending acquisitions by Medmen).
Based on the closing price of the company’s Class B subordinate voting shares as of Oct. 9, the total transaction is valued at $682-million and will be satisfied by the issuance of Class B subordinated voting shares of the company. Under the terms of the agreement, PharmaCann holders will own
approximately 25 per cent of the fully diluted shares of the company upon closing and will be subject to lock-up agreements for a period of six to 12 months.
The board of directors of both Medmen and PharmaCann have unanimously approved the transaction.
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Erika Flores condensed this news release (firstname.lastname@example.org).
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