Gotham Green Partners, with participation from Wicklow Capital, has agreed to an additional $30 million in an equity commitment to MedMen Enterprises Inc. (CSE:MMEN) (OTCQX:MMNFF), bringing the total financing commitment to $280 million. To date, Gotham Green Partners has funded $100 million of the total commitment.
MedMen said that it has signed a binding term sheet in respect of certain amendments to the definitive agreements for the up to $250 million senior secured convertible credit facility led by Gotham Green Partners, an investor in the global cannabis industry.
The terms were amended to reflect the drop in the company’s share price. “Pursuant to Tranche 1 of the Facility will be changed from $3.29 to $2.55, which represents a 12% premium over the Company’s 20 trading day VWAP as of July 8, 2019.” In addition, Gotham Green Partners and Wicklow Capital have committed to a $30 million non-brokered financing of Subordinate Voting Shares at a price equal to $2.37 per share. The Equity Placement is conditional upon the satisfaction of customary conditions, including but not limited to the receipt of all necessary approvals. MedMen shares were lately trading at $2.53, up from the 52-week low of $1.88, but well below the year’s high of $7.57.
“Both Gotham Green and Wicklow have shown continued confidence in our strategy and recognize the potential ahead,” said Adam Bierman, MedMen co-founder, and CEO.
According to the company statement, the increased financing commitment will primarily be used to:
- operationalize the balance of the company’s retail licenses; the company is licensed for up to 86 retail stores across the U.S., of which 37 are operational today (including the footprint to be acquired through pending acquisitions, subject to customary regulatory approvals);
- focus on strategic markets, such as Illinois, where the company anticipates 10 stores after the state transitions from a medical to adult use market in 2020 and pending regulatory approvals associated with the PharmaCann acquisition;
- continue expanding the retail presence in Florida, where the company expects to open 11 additional stores in 2019;
- remain opportunistic with respect to selective growth initiatives such as expanding the Company’s retail footprint and investing in its delivery and loyalty platforms and
- strengthen the company’s balance sheet
“MedMen’s strategy, brand, and performance makes them the clear leader of cannabis retail in the U.S. and we are supportive of management’s vision and plan for growth and profitability,” said Jason Adler, managing member of Gotham Green Partners. “As their primary capital partner, we will continue to support the Company as they bring their iconic brand to new markets.”