Multistate marijuana company MedMen is switching up its business partner in its effort to take the firm public in Canada.
The California-based firm signed a letter of intent with Vancouver, British Columbia-based Ladera Ventures that will allow a reverse takeover of the firm.
The deal charts a path for MedMen to go public in Canada without launching an initial public offering of its shares – the traditional route for most companies.
It also means MedMen cut off a reverse takeover deal it had brokered with Toronto-based OutdoorPartner Media in early April.
After the initial due diligence, MedMen discovered issues that made OutdoorPartner Media “unqualified to be the target of the RTO (reverse takeover),” said Daniel Yi, a spokesman for MedMen.
Under the terms of the new agreement, Ladera will create a new class of voting shares that will be issued to the founders of MedMen, Adam Bierman and Andrew Modlin.
Ladera Ventures is listed on the TSX Venture Exchange under the ticker LV.H. Trading of its shares has been halted while the MedMen deal runs its course.
According to Bloomberg, Ladera is essentially a shell company with no major current operations but was previously involved in oil and gas properties in Alberta, Canada. The firm was formerly called T.M.T Resources but changed its name to Ladera Ventures in 2017.
MedMen expects the takeover to be complete this quarter. The move includes having the company officially listed and trading on the TSX Venture Exchange.
“This is very much about raising capital at a faster speed so that we can execute on our larger plan,” Yi said.
MedMen is an operator of high-end marijuana dispensaries in luxury ZIP codes, as well as a cultivator and cannabis products manufacturer, with a footprint spanning three states.
Earlier this year, the company also launched a joint venture with Cronos Group, a Canadian medical cannabis producer, manufacturer and distributor.
The firm has raised $135 million through two funding rounds in 2016 and 2017 and has grown to more than 800 employees, Yi said.
The company most recently wrapped up construction on a 45,000-square-foot factory in northern Nevada. It also just opened a “first-of-its-kind” dispensary along the pricey Fifth Avenue corridor in New York.