MedMen Wins Case With Whitestar

MedMen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF) won its lawsuit against Arizona-based Whitestar Solutions, LLC. According to a statement,  Whitestar filed a lawsuit in March 2020, related to a Membership Interest Purchase and Sale Agreement governing the purchase of EBA Holdings, Inc. dba MedMen Scottsdale. Whitestar alleged fraudulent inducement and breach of contract, among other claims, and sought rescission of the underlying transaction or $60 million in alleged monetary damages.

MedMen maintained that the lawsuit and claims were baseless and without merit – and the judge agreed on all counts, canceling the upcoming jury trial and stating that “no reasonable juror could conclude that Whitestar is entitled to relief on any of those claims.” The judge further ruled that as the prevailing party, MedMen is entitled to submit an application to recover attorneys’ fees and taxable costs from Whitestar.

Original Agreement

In 2018, MedMen signed an agreement to purchase Scottsdale-based cannabis company Monarch from WhiteStar Solutions. At the time, Monarch was a licensed medical cannabis license holder with a dispensary, cultivation, and processing operation. In addition, MedMen was to acquire WhiteStar’s exclusive co-manufacturing and licensing agreements with Kiva, Mirth Provisions and HUXTON for the state of Arizona. MedMen agreed to pay WhiteStar approximately 80% in stock and 20% in cash in an undisclosed amount.

CSO Leaves

Separately, MedMen said Tyson Rossi, Chief Strategy Officer, is leaving MedMen, effective June 3, 2022. Moving forward, the role will be filled internally.

“We thank Tyson for his leadership and contributions to MedMen,” said Record. “We wish him all the best in his future endeavors. We are also thankful to have a strong bench of talent to fill these openings.”

Arizona Deals Go Bad

MedMen is still in a lawsuit with its other Arizona acquisition for a dispensary called Level Up. Those owners claim MedMen never paid the remaining $12 million owed on the deal. They have tried to take back the dispensary as a result of the claimed missing payment. The owners supposedly sold MedMen’s ownership but then never turned over the proceeds to the company. A judge ordered the men to pay MedMen $10.4 million from the deal. However, the former owners are also in bankruptcy court causing a messy situation for all involved.

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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