MedMen Asks New York State For Documents On Ascend's Aquisition Approval

Law360 reported that on Wednesday a New York state judge Wednesday authorized subpoenas requiring the state’s cannabis regulators and Gov. Kathy Hochul to produce documents related to the contentious acquisition between MedMen (OTC: MMNFF) and Ascend Wellness Holdings (OTC: AAWH). The conflict stems for Ascend’s plan to acquire MedMen’s New York assets, which stumbled as New York State experienced a change in the governors seat and a lack of leadership in the legal cannabis program.

The acquisition was dependent upon New York State’s approval for the acquisition which came in the waning days of 2021. MedMen believed that the approval from the state was conditional and not a “final” decision. The company also believes that without a definitive final approval, it doesn’t have to complete the transaction. For its part, MedMen also had a change of leadership during this same time and the new CEO Michael Serruyo is believed to feel the price was too low and wasn’t willing to let go of the New York Assets for a the previously agreed upon price.

Ascend has argued that MedMen isn’t completing the deal as was agreed and they point to an email from New York regulators saying the decision to approve the acquisition was final.

Political Peddling

The bombshell accusation from MedMen was that Ascend Wellness executives attended a fundraiser for the incoming Governor Kathy Hochul. MedMen implied that Ascend got the approvals only after these events and suggested that there was political peddling. That Ascend got the approvals by greasing the wheels in Albany. Public records show that Ascend did donate $15,000 to Hochul’s campaign in October 2021.

Now it seems MedMen is serving subpoenas to Hochul’s office, the New York Office of Cannabis Management and its governing body, the Cannabis Control Board. Law360 also reported that the subpoenaed parties, also includes the New York Department of Health, the body formerly responsible for overseeing the state’s medical marijuana program and that the parties will have 20 days to comply.

Hazel Crampton-Hays, a spokesperson for the governor, said in an email Thursday to Law360, “We objected to the overly broad scope of the previous subpoena, and filed a letter with the court asking for an opportunity to be heard. The court instead denied the motion on that subpoena outright. We are aware of this new subpoena, and fully expect to comply and provide responsive documents.”

Green Market Report has asked a MedMen spokesperson repeatedly for information regarding the subpoena’s and was given no information.

MedMen’s Political Donations

MedMen is no stranger to the world of political donations. In 2019, The New York Post wrote that MedMen’s former CEO and co-founder Andrew Modlin donated $25,000 to Cuomo the day before the company opened a dispensary on Fifth Avenue. The story also reported that The MedMen Opportunity Fund gave $65,000, a so-called “LLC loophole” donation.

The company’s former CFO James Patterson also accused the company of forcing him to make a $10,000 political donation. However, Patterson lost his recent case against the company in which he made several inflammatory accusations.

 

Debra Borchardt

Debra Borchardt is the Co-Founder, and Executive Editor of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Master's degree in Business Journalism from New York University.


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