Ascend Wellness (AWH), a multi-state, vertically integrated cannabis operator, has signed a term sheet to resolve its previously announced lawsuit against MedMen NY and MM Enterprises in the Commercial Division of the Supreme Court of the State of New York in New York County. Pursuant to the term sheet, MedMen has agreed to complete the sale of MedMen NY to AWH, and upon closing, AWH will enter its seventh state.
To settle the dispute, AWH will increase the transaction consideration by $15 million, $4 million of which is contingent on the start of adult-use sales at a MedMen NY dispensary. The revised total consideration of $88 million remains significantly below recent precedent transactions. As part of the settlement, MedMen will withdraw its counterclaims against AWH. The parties will also amend certain terms in the previously announced transaction agreement.
Amended Transaction Terms:
- AWH will receive a 99.99% controlling interest in MedMen NY at closing.
- AWH will pay MedMen $74 million at closing, inclusive of the $63 million transaction consideration and the $11 million settlement payment. AWH has already paid $4 million of the consideration as a deposit.
- AWH will make a subsequent payment of $14 million upon the first sale of recreational cannabis in a MedMen NY dispensary, inclusive of the $10 million transaction earn-out and the incremental $4 million related to the settlement.
- There will be no additional earn-outs and no assumption of debt.
"We are thrilled to put this dispute behind us and look forward to the imminent closing of this transaction," said Abner Kurtin, Founder and CEO of AWH. "We continue to build scale in some of the most sought-after locations in premier, limited license markets in the country, and with this investment, we will bring our high-quality products and exceptional retail experiences to our seventh state. While we always seek accretive deals, this transaction is particularly attractive given a recent comparable acquisition valued at $247 million."
MedMen NY owns and operates four medical cannabis dispensaries located in Manhattan, Long Island, Syracuse, and Buffalo; and one cultivation facility located in Utica, New York.