MedMen Refuses To Back Down On Political Influencing Accusations

On March 7, MedMen Enterprises Inc. (OTC: MMNFF) amended its complaint against Ascend Wellness (OTC: AAWH) with regards to its accusation of political influence-peddling but still maintains that its accusations are true. A few weeks ago, MedMen made the explosive allegation that New York’s cannabis regulators only approved Ascend’s request to acquire MedMen’s New York assets after political donations had been made. Ascend fought back saying the people accused of those actions weren’t actually at these political fundraising events and that MedMen would be correcting its allegations. Yesterday, it seems the corrections were made, but MedMen used the opportunity to insist that it is still telling the truth. The court filing claims,

Although the Office of the Governor has denied that specific state officials named in MedMen’s original Counterclaims met with specific Ascend officers, neither the Governor nor Ascend has denied that some form of communication occurred between Ascend or its agents and government officials unaffiliated with the Board or the Office regarding the application

On information and belief, individuals who were involved in Ascend’s lobbying efforts have acknowledged that MedMen’s original counterclaims, even if inaccurate with regard
to some specific details, were nevertheless very close to the truth, saying, in sum and substance, “they are on to us.”

So, MedMen is saying that maybe it got the details wrong, but that the Albany politicians still worked in cahoots to get the approval for the acquisition. MedMen notes that New York’s cannabis regulators were in transition from one governor to another and in the process of creating its governing board as the acquisition approval process took a back seat. MedMen says that the first two meetings of the newly named Cannabis Control Board didn’t even have the acquisition approval as part of its agenda. The next planned meeting was for December 16, but MedMen says that Ascend began making preparations prior to that meeting in the assumption they would get the approval for the acquisition.

They say Ascend CEO Abner Kurtin began informing people that the transaction would be approved during the upcoming Board meeting and on December 14, Ascend employees represented to MedMen that the transaction would close the following week, and that MedMen NY employees should therefore prepare to become employees of Ascend. On December 15, Ascend allegedly sent MedMen a draft press release titled “AWH Receives New York State Approval for Investment Agreement with MedMen NY Inc.” MedMen says that these actions suggest that Ascend had received—or believed it had received— assurances from the state that the Board would approve the application.

Governor Denies MedMen’s Claims

MedMen maintains “that Ascend had used political pressure and undue influence in an attempt to force through an approval that the Board was not prepared to give.”


On January 24, 2022, in response to allegations of a meeting between Mr. Kurtin and Governor Hochul’s secretary and other specific senior state officials in MedMen’s initial
counterclaims, the Office of the Governor released a statement declaring that “None of the Governor’s senior team members named here have ever met with these individuals.” (emphasis added). This statement was notable more for what it did not deny, including that state officials associated with Governor Hochul communicated with representatives of Ascend, the Board, and the OCM in the run-up to the conditional approval.

Ascend says it has the right to petition the government and engage in the political process. MedMen claims that Ascend ended up donating $20,000 at a fundraiser for Governor Hochul on October 28 that was organized by a lobbying firm hired by Ascend.

Ascend Spokesperson said, MedMen’s case continues to reflect nothing more than seller’s remorse. After we proved their first set of politically-charged allegations false, MedMen has admitted they were ‘inaccurate,’ dropped several of their claims, and are now desperately throwing everything but the kitchen sink into their filings in the hope that something sticks. Despite MedMen’s latest round of misleading and meritless allegations, we are confident that the facts and the law are on our side. Ascend looks forward to entering the New York market upon completing its purchase of MedMen’s New York operations.”

MedMen’s Own Political Donations

While MedMen is complaining about Ascend political donations, MedMen has actually donated much more money to New York’s politicians. In 2019, the New York Post reported, “MedMen CEO Andrew Modlin donated $25,000 to Cuomo the day before the company opened a dispensary on Fifth Avenue and The MedMen Opportunity Fund gave $65,000, a so-called “LLC loophole” donation.” In 2020, MJBiz reported, “The Nevada secretary of state’s office is reviewing allegations made by a former MedMen Enterprises executive that the cannabis company’s co-founders made illegal campaign donations to Democratic Gov. Steve Sioslak.”

In 2020, in 2020, the Center for Responsive Politics reported that MedMen was number seven on a list of top cannabis company political donors. Ascend was not on this list. Cannabis Wire wrote that it had discovered that a $50,000 donation to Cuomo was linked to a non-profit Christian mission actually came from MedMen. This brings MedMen’s total Cuomo donations to $140,000.

Conditional Approval

Readers may recall that MedMen is hanging its decision to terminate the agreed-upon acquisition because the Board gave “conditional” approval of the transaction – not “final” approval. MedMen says the Board made other approvals during the Dec. 16 meeting that were not conditional. MedMen also claims that the two companies discussed the ambiguous conditional language as the clock was ticking down towards the end of the year. Ascend was willing to look past the word conditional, while MedMen was not. The Board apparently asked for an extension to continue reviewing the request and MedMen was not willing to give the extension. At this point, it looked as if Ascend realized that MedMen would use this word as its way to terminate the deal and either potentially sell the assets for more money or keep them. Ascend sought clarification and got the email from, Richard Zahnleuter, the Office of Cannabis Management’s new General Counsel said the conditional approval could be considered final. MedMen says Zahnleuter did not have the authority to make that decision.

MedMen’s Legal Wins

MedMen may be feeling very confident in its legal dealings these days. The company recently won its lawsuit against former CFO James Parker, the same executive that made the allegations of forced political donations in Nevada. MedMen also won the case against Parker with regards to the money extended to him for his legal battle. Parker will have to pay that money back.

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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