MedMen Enterprises Inc. (“MedMen” or the “Company“) (CSE: MMEN) (OTCQX: MMNFF), is pleased to announce the sale of C$20.0 million of units (“Units“) at a purchase price of C$0.40 per Unit (the “Private Placement”). Each Unit consists of one Class B subordinate voting share (each, a “Share“) and one share purchase warrant (each, a “Warrant“). Each Warrant permits the holder to purchase one Share for a period of three years from the date of issuance at an exercise price of C$0.50 per Share.
MedMen considers Florida to be a core market where the Company has identified significant potential opportunities. MedMen’s current Florida asset base includes 16 prime leased dispensary locations (including 10 fully built-out stores) with 4 operational dispensaries. The Company also owns underutilized production facilities that are producing approximately 8,000 pounds annually.
Under Florida cannabis regulations, cannabis retailers can only sell products that have been produced in-house. Therefore, a constraint on the Company’s Florida retail sales has been production capacity. MedMen’s Florida strategic growth plan includes using the proceeds of the Private Placement to: (i) expand and increase utilization of the existing production facilities with the goal to boost cultivation capacity from 8,000 pounds to 22,000 pounds annually, (ii) increase manufacturing capacity and allow for the introduction of Mary’s Medicinals’ suite of products and Dixie Brands’ award-winning edibles, and (iii) with the increased capacity, have 15 operational stores open to serve Florida patients within the next year. Proceeds will also be used to fund certain costs related to opening locations in Massachusetts, Illinois and California, and for general corporate purposes.
“This past year we have made tremendous progress on our turnaround plan with our cost cutting initiatives, gross margin expansion and focusing investments on our highest ROI opportunities,” said Tom Lynch, Chairman and Chief Executive Officer of MedMen. “MedMen’s future has never been brighter. We believe we have the most recognizable brand in cannabis, an actionable strategic growth plan and a disciplined management team that knows how to execute this turnaround.”
This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities being offered have not been registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act“), and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the U.S. Securities Act, and applicable state securities laws. As part of the transaction, the Company has agreed to file a resale registration statement on Form S-1 with the Securities and Exchange Commission within 15 days of the closing to register the resale of the Shares and Shares underlying the Warrants issued in the Private Placement.