Marijuana multistate operator Ascend Wellness resolved a bitter, weekslong legal dispute with Los Angeles-based MedMen Enterprises by agreeing to pay an additional $15 million for MedMen’s lucrative New York medical cannabis operation.
The total acquisition price now is $88 million for a 99.99% interest in a vertical operation that includes a cultivation facility in Utica and dispensaries in Manhattan, Long Island, Syracuse and Buffalo, according to a news release from Ascend.
The original deal was $63 million for an 86.7% interest, meaning that MedMen essentially sold the remaining 13.3% for $25 million.
The deal gives New York-based multistate operator Ascend a foothold in the state’s emerging multibillion-dollar recreational marijuana industry.
The agreement resolved a flurry of lawsuits and counterclaims that played out in the media in recent weeks after MedMen balked at completing the deal.
“We are thrilled to put this dispute behind us and look forward to the imminent closing of this transaction,” Ascend founder and CEO Abner Kurtin said in the release.
MedMen stressed in its own release that it gained an additional $15 million for its stockholders from the deal, while Kurtin declared that the acquisition price is still way below market.
“While we always seek accretive deals, this transaction is particularly attractive given a recent comparable acquisition valued at $247 million,” Kurtin said.
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Here are details of the acquisition:
- Ascend will pay MedMen $74 million at closing. Ascend said it has already paid $4 million as a deposit.
- Ascend said it will make a subsequent payment of $14 million upon the first sale of recreational cannabis in a MedMen NY dispensary, which includes a $10 million transaction earnout and $4 million related to the settlement.
- There will be no additional earnouts or assumption of debt.