I was browsing the Marijuana Business Daily website yesterday and noticed Tilray had announced that they had purchased a stake in the marijuana dispensary MedMen (MMENM). This is a big deal as the company is now valued at $3.5 billion. They have more than 850 dispensaries in Canada and the United States.
MedMen, the U.S. cannabis investment firm, has bought a minor stake in Canadian cannabis firm Tilray, a deal that could significantly boost MedMen’s share of the U.S. market.
Tilray (NASDAQ:TLRY) has purchased a medical marijuana company that is backed by Hollywood producer Michael Medved, for $165 million. The move by Tilray helps the Canadian cannabis company diversify its investment portfolio and may not be too bad for medmen either.. Read more about tilray and let us know what you think.
Tilray, Inc. (NASDAQ: TLRY) has acquired the majority of MedMen Enterprises Inc.’s (CSE: MMEN) (OTCQX: MMNFF) outstanding senior secured convertible notes, which were previously owned by funds associated with Gotham Green Partners, LLC and other funds. The total value of the deal is $165.8 million.
Tilray claims that by converting the Notes and exercising the accompanying warrants after U.S. cannabis legalization (or Tilray’s waiver of such requirement), the firm would acquire a substantial ownership stake in MedMen. MedMen and GGP modified the restrictive covenants and extended the loan maturity to 2028 in conjunction with the sale of the Notes, giving MedMen the freedom to execute on its growth objectives and explore new strategic possibilities.
“Backed by increasing trends toward legalization worldwide, we are committed on creating the world’s top cannabis-focused consumer branded business with a target of $4 billion in sales by the end of our fiscal 2024,” stated Tilray Chairman and CEO Irwin D. Simon. The investment in MedMen stocks that we are announcing today, one of the most well-known brands in the $80 billion U.S. cannabis industry, is a key step toward achieving our goal of enabling Tilray to dominate the U.S. market whenever legalization occurs.”
In addition, MedMen announced today that it has received a substantial equity investment from a group of investors via a private offering of MedMen shares and warrants. MedMen has 21 licenses and 25 retail sites in major cities such as the Bay Area, Los Angeles, Boston, Chicago, and Las Vegas, as well as a strong presence in California.
“Our management team has spent the last 18 months implementing a rigorous turnaround plan,” said Tom Lynch, Chairman and CEO of MedMen. We appreciate our stakeholders’ patience and support while we worked to repair the company and re-establish confidence and reputation. We think our perseverance paid off, as we were able to recruit partners that shared our goal for creating the world’s most powerful cannabis retail brand. Furthermore, the funds from the private placement, as well as modifications to the Notes, provide MedMen with the liquidity and flexibility to align our revenue trajectory with our operational competence and globally recognized brand. MedMen 2.0 has here, and we are ecstatic to begin the next chapter of our journey.”
Backstop of $100 million
In addition to the Tilray acquisition, MedMen announced that investors headed by Serruya Private Equity are purchasing $100 million in MedMen units at a $0.24 (C$0.32) per unit purchase price. The $100 million to be raised in the Private Placement will be backed up by certain SPE investors. The funds will be used to expand MedMen’s operations in important areas such as California, Florida, Illinois, and Massachusetts, as well as to discover and accelerate other growth possibilities throughout the United States.
“This US$100 million investment is a game-changer for our Company, bolstering our financial sheet and laying the groundwork for our future growth,” Lynch added. This acquisition provides us with the freedom and firepower to align our revenue growth with our operational competence and globally recognized brand. MedMen 2.0 has here, and we are ecstatic to begin the next chapter of our journey.”
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