California-based cannabis company MedMen is planning to become a publicly traded company in the early part of the second quarter. Rather than do an Initial Public Offering (IPO), MedMen is planning on a reverse merger in the Canadian market. C0-founder and CEO Adam Bierman is making the announcement in Vancouver at a Canaccord event.
Company spokesman Daniel Yi said several companies were being considered for the purpose of serving as its entry into the public market. Yi also noted that MedMen preferred a major exchange like the ones in Canada versus the OTC Marketplace in the U.S. “The Canadian Stock Exchange seemed the appropriate vehicle,” said Yi. “It’s where companies like Canopy and MedReleaf have been able to raise lots of money.”
MedMen’s first fund was very successful and raised $100 million. In 2017, the company announced it would start a second fund and raise $250 million. Yi said $75 million was raised for the second fund when the decision was made that it would be easier to go public instead and the fundraising effort stopped. Investors in both funds will receive shares in the public company.
Chris Leavey, who had been hired to help raise private money and was a co-chairman will no longer work with the company, however, he will remain as an investor. “He had come out of retirement to work with MedMen and has no interest in working for a public company,” said Yi.
The proceeds of the offering will be used for expansion purposes. MedMen was founded 10 years ago as Bierman and Co-founder and President Andrew Modlin formed a team to open medical marijuana dispensaries. MedMen’s plans are to be hyper-focused on the California, Nevada and New York markets. The strategy is to be located in only the largest markets with the heaviest tourist traffic.
The company has quickly grown from two to seven dispensaries in California. Sales have tripled at the California dispensaries since the state legalized adult use marijuana. There are plans to open three locations in Las Vegas by the end of the first quarter. One MedMen dispensary will be located directly on the Vegas strip. In addition to that, the company just finished constructing a 45,000 square foot cultivation and manufacturing facility near Reno
MedMen owns one of only 10 state issued vertical licenses in New York, of which only five are operational. The company holds a lease on a Fifth Avenue location in Manhattan but is biding its time until New York’s marijuana laws ease. It has no plans to enter the New Jersey market.
The company has grown to several hundred employees in a short time and according to Paysa, the average salary is $104,000.