(This story has been updated with comment from MedMen.)
Multistate cannabis operator Ascend Wellness Holdings called off its tumultuous acquisition of MedMen Enterprises’ New York operation, citing concerns over the state of the company’s assets.
Ascend CEO Abner Kurtin announced the canceled acquisition on a Monday quarterly earnings call, according to Cannabis Business Times.
The deal was first announced in February 2021.
In a regulatory filing, Ascend said the companies’ amended deal required Los Angeles-based MedMen to make:
- Certain warranties that MedMen New York’s assets had not materially changed since the end of 2021.
- “An acknowledgement that the representations and warranties from the investment agreement will survive” three months after closing.
“(Ascend) has determined that MedMen cannot make or provide the representations and warranties it is required to as part of the contemplated transactions,” the filing noted.
MedMen CEO Ed Record said in a statement to MJBizDaily that the company’s “New York-based assets and trademark have never been more valuable” in light of the state’s pending adult-use market.
“We are considering all options to ensure strong shareholder return; this includes the potential sale of assets and/or licensing of the MedMen trademark,” Record added.
New York-based Ascend said it had already paid MedMen a $4 million deposit for the acquisition.
Kurtin told investors the canceled deal would give Ascend $70 million in cash, adding that New York isn’t currently a priority for the company because of the state’s “highly uncertain” adult-use regulatory environment.
Ascend originally announced it would pay $63 million for an 86.7% stake in MedMen New York, with the option to acquire the rest.
That plan was delayed by a legal battle between the companies after Ascend accused MedMen of breaching the deal’s terms and then filed a lawsuit.
Ascend resolved the dispute in May when it agreed to amend the acquisition to pay $88 million for a 99.99% stake in MedMen New York.
