Ascend Wellness Archives - Green Market Report

Debra BorchardtJune 24, 2022
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Cannabis deal tracker Viridian Capital Advisors is looking at the second half of the year to see what’s in store for the industry. Director of Equity Research Jonathan DeCourcey wrote, “The outlook is bearish for investor returns in the near term as the key catalyst on everyone’s mind, federal legislation, is unlikely to come, and thus valuations will remain depressed for the remainder of the year with further stock declines likely in connection with broader market weakness.” With that said, DeCourcey thinks investors will have to wait until next year for a return to a positive market in the sector. For now, though he has come up with five predictions for cannabis for the back half of 2022. 

Viridian’s Five Predictions are as follows:

  • Federal legislation won’t happen
  • Stock prices will remain depressed
  • Companies may beat earnings estimates
  • California consolidation will continue
  • Smaller companies will outperform larger ones

Despite hopes for a banking bill, it is unlikely that anything will happen in 2022. DeCourcey wrote, “There is insufficient bi-partisan support for Chuck Schumer’s full legislative proposal to pass (requiring 10 Republican votes and full Democrat support) and, as we have said before, the timing is too tight for a stand-alone SAFE Act to be possible this year given the Democrats will first await the Schumer proposal to make the rounds.” Schumer’s proposal is expected to come in August, but that doesn’t give it much time before the midterm elections. 

New legislation could have been the catalyst to jump-start stock valuations. Take that off the table and there isn’t anything really big to move the needle. The overall broader market has been beset with recession fears and interest rate hikes. That also doesn’t help stock prices. However, depressed stock prices could combine next year with strong company earnings and that could lead to a recovery, but those hopes are pushed into 2023. 

Companies struggled with revenues and earnings at the beginning of 2022. Lingering Covid issues, wholesale price declines, and integration issues for newly combined companies caused some strong headwinds. DeCourcey thinks that these challenges are winding down, but cautions that there could be lingering inflation pressures. Still, expectations have been reset and if the New York market actually opens in 2023 then next year could see some strong growth. Plus, companies are going to be able to start reporting New Jersey sales figures, which are looking very good. Those New Jersey numbers could spark some earnings beats and that would be welcome news. 

“The proposed elimination of the California cultivation tax, which we expect to take effect next month, is a game-changer for California cannabis companies reducing the cost of production on outdoor growers by as much as 50%,” said the report. DeCourcey thinks the additional cash will lead to more transactions and motivation for M&A. The improving tax situation could also entice larger MSO’s to come to the market. “For investors, we expect the easier operating conditions and looming consolidation will result in outperforming returns for California-centric stocks in the second half and into next year.”

Finally, the report noted that scale does not necessarily equate to winning. Large companies get the attention, but the smaller and mid-size companies could have better growth potential with the likelihood of getting acquired. Smaller company stocks also outperformed the larger ones by declining by a smaller percentage. Dropping 47% on average versus 55% declines for larger companies. “Our top picks for 2H investment fall within the category of smaller and medium-sized companies. These names include Ascend (OTC: AAWH), AYR Wellness (OTC: AYRWF), Cansortium (CNTMF), Lowell Farms (LOWLF) and Schwazze.”


StaffMay 18, 2022
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The Daily Hit is a recap of the top cannabis business stories for May 18, 2022.

ON THE SITE

Canopy Growth Acquires Jetty Extracts for $69 Million

Canopy Growth Corporation (TSX: WEED) (NASDAQ: CGC) is buying Lemurian, Inc. better known as Jetty Extracts, a California-based producer of high-quality cannabis extracts and pioneer of clean vape technology, contingent upon federal permissibility of THC in the U.S. or earlier at Canopy Growth’s election, up to 100% of the outstanding capital stock of Jetty. Read more here.

Bright Green Listed on NASDAQ

Bright Green (NASDAQ: BGXX) is a cannabis company with no revenue that just began trading on the NASDAQ, despite the exchange’s insistence that it won’t list U.S. cannabis companies due to the product being federally illegal. Bright Green plans to produce cannabis for research purposes with the Drug Enforcement Agency‘s (DEA) blessing, which seems to be the reason why the NASDAQ has allowed the company to trade. It would be considered federally legal cannabis. The stock is trading at $26. Read more here.

Cresco Revenues Fall

Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF)  released its financial results for the three months ended March 31, 2022, as revenue fell from the fourth quarter’s $217 million to the first quarter’s $214 million. Cresco Labs did note that the revenue increased 20% over last year’s $178 million for the same time period. This also beat the Yahoo Finance average analyst estimate for sales of $213 million. Read more here.

GMR Women’s Leadership Awards: Ralina Shaw

Ralina is the founder of House of Tyne and on the leadership team of 4thMVMT,  a leading social impact organization based in Los Angeles with a mission to support those who have been adversely affected by onerous Cannabis laws. They do this by educating, empowering, and training those adversely affected to run/operate their BIPOC-led “Sixty Four & Hope” retail dispensaries in Los Angeles (2 recently opened locations and counting). Read more here.

 Psychedelics on the World Stage

Every year world leaders come together to discuss the global economy at the World Economic Forum’s annual gathering in Davos Switzerland. This small town in the Alps has become the place where the smartest people on the planet come together to discuss solutions to the world’s economic problems and issues. It is not uncommon for various industries to establish a meeting place for people to come together for conversations. In 2019, the Canada Cannabis House hosted a three-day event for people in the cannabis industry to introduce themselves and talk about business with people who were unfamiliar with the industry. Read more here.

 Women Creating Cannabis Brands (VIDEO)

On April 28, 2022, the Green Market Report hosted its first Women’s Summit in New York City. This panel was titled “Women Creating Cannabis Brands.” These savvy and accomplished women have created truly unique and original products and companies. Their products are unlike others in their categories. This panel explores what it takes to create a company and product that stands out in a sea of sameness. Read more here.

IN OTHER NEWS

Ayr Wellness Inc.

Ayr Wellness Inc. (CSE: AYR.A, OTCQX: AYRWF), a leading vertically integrated U.S. multi-state cannabis operator (MSO), today announced that it has launched first sales from its Phoenix, Arizona cultivation facility. Concurrently, the company announced the launch of its national pre-roll brand, STiX Pre-Roll Co. in Arizona. Read more here.

American Green, Inc.

American Green, Inc. (ERBB:OTC) has purchased the 40,000 square foot building known as American Green’s “Cypress Chill” cannabis facility located at 2325 W. Cypress St. Phoenix, AZ. 85009.  The building sits on a 62,000 square foot site and was previously leased by ERBB in August 2021 with an option to buy. American Green has exercised its option to buy the building and now owns it. The purchase price was set at $3.75 million at the time of the signing of the lease last year. Recently, the building was professionally appraised for $5.3 million, giving American Green $1.55 million of additional equity, at the time of closing. When added to the down payment of $1.123 million, there is now a total of $2.673 million of equity in the new “Cypress Chill” cannabis grow building. Read more here.

MariMed Inc.

MariMed Inc. (OTCQX: MRMD), a leading multi-state cannabis operator focused on improving lives every day, announced today it had been awarded a provisional dispensary license by the Ohio Board of Pharmacy. MariMed won this license in the Ohio lottery process. The license allows the Company to develop a medical dispensary in Tiffin, Ohio, located south of Toledo and home to the University of Bucharest and Tiffin University. Read more here.

Ascend Wellness Holdings, Inc.

Ascend Wellness Holdings, Inc. (CSE: AAWH.U) (OTCQX: AAWH), a multi-state, vertically integrated cannabis operator focused on bettering lives through cannabis, is pleased to announce that it has closed on $36.5M of additional funding under the increase option of its existing term loan credit facility. In August 2021, the Company announced it had closed on a US$210 million Senior Secured Term Loan credit facility with Seaport Global Securities LLC as lead manager.

Steep Hill Michigan

Steep Hill is pleased to announce that the Company’s licensee partner, Steep Hill Michigan, a Cannabis Regulatory Agency (CRA) licensed medical and adult-use/recreational cannabis safety compliance testing facility, has earned ISO/IEC 17025:2017 accreditation, an International Standard recognized by governments and industry participants as the standard of excellence for the technical requirements and operational competence of a quality laboratory management system. The accreditation was validated by Perry Johnson Laboratory Accreditation (PJLA), the Michigan-based world-wide leader in ISO assessment and validation. Read more here.

First Columbia Gold Corp., Green Diamond Farm

First Columbia Gold Corp (FCGD), operating as FineCannabisGoods.com, is pleased to announce an agreement to acquire Green Diamond Farms LLC of southwest Michigan. Green Diamond Farms is currently working on licensing and setting up growing facilities in different areas of the state where permitted in partnership with FCGD. Each location should gross up to $2.5 mil year 1 and $6 mil by year 2. Read more here.


StaffMay 11, 2022
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The Daily Hit is a recap of the top cannabis business stories for May 11, 2022.

ON THE SITE

Ascend Wellness Holdings

Ascend Wellness Holdings, Inc. (CSE: AAWH.U) (OTCQX: AAWH) reported its financial results for the first quarter ending March 31, 2022. Total revenue of $101.2 million decreased 0.8% quarter-over-quarter and increased 33.4% year-over-year. Ascend stock jumped over 5% in trading to close at $3.20. Ascend also reported that it had a net loss of $27.8 million or a loss of $0.16 per basic and diluted common share during the quarter, compared to a net loss of $16.5 million in the fourth quarter of 2021. Read more here.

MedMen Surrenders Assets to Ascend Wellness

MedMen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF) finally agreed to close the deal to sell its New York assets to Ascend Wellness (OTC: AAWH). The two companies had initially agreed to the transaction, but then MedMen was accused of having “buyer’s remorse” by Ascend when it tried to pull out of the deal. The two companies then engaged in a nasty legal battle with MedMen accusing Ascend of greasing politicians‘ hands in the state. Read more here.

Harborside Inc. and Pelorus Equity Group

Pelorus Equity Group completed the second and final tranche of its previously announced $77.3M non-dilutive real estate debt financing with Harborside Inc. (CSE: HBOR) (OTCQX: HBORF). The initial funding included three individual loans to Harborside, Urbn Leaf Holdings Inc., and Loudpack JV Corporation with a second tranche made available upon the final closing of the three-way merger. The proceeds were used primarily to retire certain existing loans and provide additional working capital. Read more here.

Agrify Beats Revenue Estimates

Agrify Corporation (Nasdaq: AGFY)  announced financial results for the first quarter ended March 31, 2022, as revenue increased 271% to $26 million for the first quarter versus $7 million for the prior-year period. This was also higher than Agrify’s fourth-quarter revenue of $25.3 million and beat the Yahoo Finance average analyst estimate for revenues of $25..3 million. The stock price was up by over 6% in early trading to lately sell at $2.60. Read more here.

Goodness Growth

Goodness Growth Holdings, Inc. (CSE: GDNS) (OTCQX: GDNSF) reported financial results for its first quarter ended March 31, 2022. Goodness Growth had total revenue in the first quarter of $15.6 million, an increase of 18.2% as compared to the same time period in 2021. The net loss in the quarter was $14.6 million versus a net loss of $6.9 million in the first quarter of 2021. Read more here.

GMR Women’s Leadership Awards: Narim Jarrous

Narmin Jarrous manages operational planning and positioning for all developmental strategies within the Exclusive Brands organization, while also leading the teams’ Social Equity efforts, determined to lift up communities that have been disproportionately impacted by the prohibition of marijuana. Read more here.

Psychedelic Medicine Patents

One of the most important aspects of the psychedelics business—and one that is becoming more contentious—is about securing and protecting the patent for the specific molecule or synthetic that a psychedelics company is banking on because it can essentially protect the investment of millions of dollars a startup spends on setting up and running clinical trials, hiring expensive medical staff and other business development expenses. Read more here.

Targeting Female Cannabis Brands (VIDEO)

On April, 28, 2022, the Green Market Report hosted its first Women’s Summit in New York City. This panel was titled “Targeting Female Brands” and featured a stellar lineup of successful women including Cannaclusive Founder Mary Pryor, Humble Boom Founder Solanje Burnett, CMO of Trube Tokes Kymberly Byrnes and moderated by Politico’s Mona Zhang. More here.

IN OTHER NEWS

Harborside Inc.

Harborside Inc. (CSE: HBOR) (OTCQX: HBORF), a California-focused, vertically integrated cannabis enterprise, today announced it opened two new retail stores in California, bringing its total retail store count to 13, with a new Harborside-branded store in San Francisco, and a new Urbn Leaf-branded store in La Mesa, located in San Diego County. Read more here.

FSD Pharma Inc.

FSD Pharma Inc. (NASDAQ:HUGE) (CSE:HUGE) (FSE:0K9A), a life sciences holding company dedicated to building a portfolio of assets and biotech solutions, has closed the sale of non-core assets for $16.4 million. The company has sold its former cannabis processing facility, located in Coburg, Ontario, which it acquired for $5.5 million in November 2017. The property includes a 26.1-hectare parcel of land and a 50,800 square meter building. Read more here.

 

 

 


Debra BorchardtMay 11, 2022
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Ascend Wellness Holdings, Inc. (CSE: AAWH.U) (OTCQX: AAWH) reported its financial results for the first quarter ending March 31, 2022. Total revenue of $101.2 million decreased 0.8% quarter-over-quarter and increased 33.4% year-over-year. Ascend stock jumped over 5% in trading to close at $3.20.

Ascend also reported that it had a net loss of $27.8 million or a loss of $0.16 per basic and diluted common share during the quarter, compared to a net loss of $16.5 million in the fourth quarter of 2021. Ascend attributed the loss to operating costs and a one-time settlement charge related to the settlement of a stockholder dispute regarding one of the company’s convertible note purchase agreements.

“Q1 2022 was a transitionary quarter for Ascend as we made investments to launch the next phase of our growth story,” said Abner Kurtin CEO and Co-Founder. “While preparing for adult-use sales in New Jersey, we significantly increased our total canopy capacity and recently entered into the Pennsylvania market. The early days of adult-use sales in New Jersey indicate that the state will be a key growth driver for the remainder of 2022.”

In addition to reporting earnings, Ascend was also able to tell the market it had settled its lawsuit with MedMen over the purchase of its New York assets. The settlement is expected to close within 30 days.

Breaking down the revenue results, total retail revenue was $63.3 million for the first quarter of 2022, representing a 2.4% decline as compared to the prior quarter. Gross wholesale revenue increased to $37.9 million, a 2.1% sequential increase, driven by growth in intercompany wholesale sales. Net wholesale revenue decreased 7.8% sequentially to $21.8 million, primarily driven by pricing pressure in Illinois and Massachusetts.

After The Quarter Ended

After the quarter ended, Ascend completed an equity transaction to roll up all of the other existing members of Story of PA CR, LLC. The company said it will use the remainder of the year to build a cultivation facility and six dispensaries, with plans to commence operations in Pennsylvania in 2023.

Also after the quarter, Ascend was one of the first in the state of New Jersey to launch adult-use sales at its dispensary in Rochelle Park, marking the start of the highly anticipated adult-use market in the state. On the first day of recreational sales, the company had approximately 1,500 customers and average basket sizes of $135, further substantiating the promising market.


Debra BorchardtMay 11, 2022
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MedMen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF) finally agreed to close the deal to sell its New York assets to Ascend Wellness (OTC: AAWH). The two companies had initially agreed to the transaction, but then MedMen was accused of having “buyer’s remorse” by Ascend when it tried to pull out of the deal. The two companies then engaged in a nasty legal battle with MedMen accusing Ascend of greasing politicians‘ hands in the state. MedMen NY owns and operates four medical cannabis dispensaries located in ManhattanLong IslandSyracuse, and Buffalo; and one cultivation facility located in Utica, New York.

MedMen said the new settlement will bring more money to the company’s shareholders, although the increased amount is only $15 million. The deal is expected to close in 30 days. According to a statement, “Under the terms of the settlement agreement, AWH will pay MedMen $88 million: $73 million as an assumption of debt and $15 million in cash. Other terms of the transaction will be as originally announced in February 2021.”

In MedMen’s most recent earnings announcement, the company noted it only had $14 million in cash as of the end of March. The current liabilities for the company are $375 million. It had a net loss of $30 million on quarterly revenues of just $35 million.

“This resolution is a clear win for MedMen shareholders, as the company will receive $15 million in additional value,” said Michael Serruya, MedMen’s Chairman of the Board. “This resolution enables MedMen to move forward with plans to significantly restructure its balance sheet, reduce debt, and focus on its core markets.”

COO Departs

Serruya was only the interim CEO for MedMen and two weeks ago he was replaced when Edward Record was appointed CEO. Record joined MedMen’s Board of Directors in 2021. He brings deep retail and restructuring experience, having overseen financial and operational performance for several large national retailers. He previously served as the Chief Financial Officer for Hudson’s Bay Company, whose U.S. holdings include Saks Fifth Avenue. Before joining HBC, Record was Chief Financial Officer for J.C. Penney. At the same time, MedMen’s COO Roz Lipsey, notified the company of her decision to resign, effective May 20, 2022.

Ascend’s Side

A statement by Ascend showed that the company would receive a 99.99% controlling interest in MedMen NY at closing. AWH will pay MedMen $74 million at closing, inclusive of the $63 million transaction consideration and the $11 million settlement payment. AWH has already paid $4 million of the consideration as a deposit. AWH said it will make a subsequent payment of $14 million upon the first sale of recreational cannabis in a MedMen NY dispensary, inclusive of the $10 million transaction earn-out and the incremental $4 million related to the settlement. There will be no additional earn-outs and no assumption of debt.

While MedMen is claiming to have received more money, in the initial deal, Ascend was only going to get 86.7% of the company with an option to buy the remaining amount. Now it seems it got that amount for just $15 million.

“We are thrilled to put this dispute behind us and look forward to the imminent closing of this transaction,” said Abner Kurtin, Founder, and CEO of AWH. “We continue to build scale in some of the most sought-after locations in premier, limited license markets in the country, and with this investment, we will bring our high-quality products and exceptional retail experiences to our seventh state. While we always seek accretive deals, this transaction is particularly attractive given a recent comparable acquisition valued at $247 million.”

T. Andrew Brown, President of AWH NY, added, “We look forward to shifting our attention toward operating the four dispensaries, expanding the cultivation facility, and working alongside the Office of Cannabis Management and the Cannabis Control Board. Servicing the patients of New York, creating diverse jobs, and enhancing our social-equity initiatives throughout the state are among my top priorities.”


Video StaffApril 21, 2022

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Ascend Wellness (OTC: AAWH) was excited to open its store in Rochelle Park, New Jersey for legal adult-use cannabis sales. The company opted to start opening day with appointment-only visits. If a walk-in customer was able to book an appointment immediately, they could shop, otherwise, Ascend gave them a $5 coupon if they had to wait for an appointment. The company wanted a controlled open versus lines of customers. Police were helping to direct traffic and the parking lot next to the store was active with cars coming and going.


Debra BorchardtApril 13, 2022
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With the news that New Jersey was finally approving some cannabis companies to begin selling adult-use cannabis, investors began salivating over who would triumph. Cannabis stocks have been in a decidedly long bear market causing investors to lose great sums of money (on paper at least). As the process to begin these sales went through a series of starts and stops, the companies along with the investors were getting frustrated. It’s incredibly difficult for a retailer to make staffing and inventory decisions when you have no clue as to when you when need either. Investors wanted to know who would reap the benefits of those sales and when it could be reflected in earnings releases.

Potential Market

Headset.io has predicted that the first full year of sales in New Jersey could bring in $740 million in sales. The company went on to write that New Jersey, with its adult-use transition expected in March 2022, is projected to boast a 21+ population of 7 million that will produce $1.6 billion in sales by 2025.

A Rutgers report wrote, “We estimate that New Jersey would collect between $118.2 million and $173.5 million per year after recreational marijuana is legalized and when the market is fully saturated.”

Acreage Holdings (OTC: ACRHF) said during its last earnings announcement that it increased cultivation capacity output nearly fourfold at the Egg Harbor facility in New Jersey to support the company’s own retail network and the rapidly growing wholesale market ahead of the launch of the adult-use sales. These are its approved locations and while the Atlantic City store wasn’t approved in the first round, it’s expected to happen eventually.

  • The Botanist by CCF, Egg Harbor Township
  • The Botanist by CCF, Williamstown (Monroe)

Curaleaf (CURLF) has three locations in New Jersey, but so far just two have been approved in the first round.

  • Curaleaf, Bellmawr
  • Curaleaf, Edgewater Park

TerrAscend (OTC: TRSSF has been also gearing up for the state to go legal. The company said that cash used in operations was $3.8 million for the three months ending in December 2021, mainly driven by an increase in inventory related to the anticipated start of adult-use sales in New Jersey. In the last earnings announcement, Executive Chairman Jason Wild, commented, “The strategic decisions we made in Pennsylvania have resulted in the highest quality product we have ever sold in this market. Additionally, the actions undertaken in New Jersey have our team prepared for adult use, where we have one of the largest cultivation footprints in the state, along with three ideal dispensary locations.”

  • The Apothecarium, Maplewood
  • The Apothecarium, Phillipsburg

Verano’s (VRNOF) New Jersey footprint consists of three cannabis dispensaries operated under the flagship Zen Leaf brand in Elizabeth (117 Spring St), Lawrence Township (3256 Brunswick Pike), and Neptune Township (2100 Route 66), along with a 120,000 square foot cultivation and processing facility in Branchburg. Darren Weiss, Verano Chief Operating Officer, and General Counsel said, “The approval of personal use cannabis marks a huge step forward for New Jersey, the cannabis industry, and the nation at large. On behalf of our Verano New Jersey team, we look forward to welcoming personal use visitors to our Zen Leaf dispensaries.”

  • Zen Leaf, Elizabeth
  • Zen Leaf, Lawrence

Green Thumb Industries (OTC: GTBIF) must be thrilled that one of its approved dispensaries is just a 30-minute drive from New York City. The company had two locations approved, while the Paramus store will continue serving medical-only patients.

  • RISE Dispensaries, Paterson
  • RISE Dispensaries, Bloomfield

Columbia Care’s (OTC: CCHWF) outlook for revenue in 2022 included sales that it hoped would come from New Jersey. The company forecast $625-$675 million in sales for the year and specifically called out New Jersey as contributing to that estimate. Col-Care also had two locations approved.

  • Columbia Care, Vineland
  • The Cannabist, Deptford (Columbia Care)

Ascend Wellness (OTC: AAWH) was also thrilled to get at least one location in the first group to begin sales. The company tweeted, “We are thrilled to announce that we are among the first cannabis companies permitted to sell adult-use cannabis in the State of New Jersey. We look forward to opening our doors to 21+ customers. Stay tuned.” The company currently operates two of the state’s 23 medical dispensaries and expects to sell adult-use cannabis products at its Montclair retail location at 395 Bloomfield Ave. and open a third dispensary, located in Fort Lee, later this year.

  • Ascend New Jersey, Rochelle Park

Debra BorchardtMarch 30, 2022
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Ascend Wellness (OTC: AAWH) fired its latest shot in the battle to force MedMen (OTC: MMNFF) to complete the previously agreed-upon sale of the company’s New York assets. On Monday, the company filed its latest documents with the court calling out MedMen’s accusations of political influence peddling. Ascend is arguing that MedMen is using the accusation as a way to distract and stall the acquisition process.

Background

Readers may recall that MedMen found itself in financial trouble at the beginning of 2021 and agreed to sell most of the ownership of its New York assets to Ascend. However, the New York cannabis regulatory bodies were in disarray throughout the year as the state ushered in a new governor. The newly-appointed Governor Kathy Hochul jump-started the group by quickly naming members of the Cannabis Control Board. Once the group got up and running, the MedMen license transfer had been in the pipeline for months and the clock was running out. As MedMen realized it had probably sold the properties too cheaply, it was in no hurry to see the deal approved and completed. Ascend on the other hand was pushing the regulators for an answer, which it finally got on December 16, 2021.

MedMen argued that the approval was conditional and not final. The company saw this as its way out of the deal and has insisted that the final approval by the regulators didn’t arrive in time. Then the company went on to accuse Ascend of political peddling by donating to a campaign for Governor Hochul in order to speed up the approval process. MedMen claimed that certain Ascend executives attended certain campaign fundraisers, which it then walked back.

Well, MedMen said it was incorrect in its accusations but refused to back down on its claims. Saying the peddling still occurred, it just had the dates and people wrong.

Ascend Wants MedMen’s Claims Dismissed

The latest court document points out some inconsistencies in MedMen’s argument. If MedMen is right that the final approval never happened, then how could Ascend have bought the approval through influence peddling? That would mean the lobbying campaign was a failure.

Additionally, Ascend said in the filing that the Investment Agreement required both Ascend and MedMen to work together to obtain government approval ‘as promptly as possible.’ and that both “parties agreed to use “commercially reasonable efforts” to ensure that all closing conditions were satisfied, including obtaining regulatory approval for their transaction. At bottom, MedMen pleads that Ascend fulfilled that contractual obligation by exercising its constitutional rights to engage in the political process to ensure the parties’ achieved the benefits of their bargain.”

MedMen asserted that on December 8, 2021, AWH NY President Andrew Brown attended an in-person fundraiser for Governor Kathy Hochul in Manhattan and that Ascend CEO Abner Kurtin met with “senior state executive officials” in Albany on December 10, 2021. Ascend said Brown could not have attended a fundraiser in Manhattan on December 8, 2021, because
he was in Albany that entire week appearing in federal court pro bono on behalf of an indigent party, and Kurtin could not have met with anyone in Albany on December 10, 2021
because he was in Florida. MedMen didn’t give this detail when it tried to walk back its accusations.

MedMen’s Own Political Moves

Ascend went on to suggest that MedMen’s more guilty of political peddling than Ascend is. “MedMen’s description of its own conduct gives away the game it is playing. After pleading
that it retained “a public strategy firm,” “regulatory counsel,” “government relations professionals” and “a regulatory consulting firm,” and worked to convince government officials of “the benefits to New Yorkers from the transaction all to achieve the very same purpose as Ascend—obtaining regulatory approval—MedMen cannot explain why Ascend’s lobbying efforts
breached the implied covenant but MedMen’s did not.”

The filing also says, “MedMen now alleges that “lobbyists at Dickinson & Avella” somehow “arranged” a “meeting at which state officials associated with the Office of the Governor discussed the application for approval of the MedMen-Ascend transaction. But MedMen does not allege that anyone from Ascend (or Dickinson & Avella) attended that meeting, nor does it explain how this meeting was supposedly “arranged. Adding to the irony is that MedMen’s complaints center on Dickinson & Avella, the very same firm MedMen retained to
lobby New York State officials on MedMen’s behalf just one year earlier.”

Plus, Ascend says “MedMen acquired its New York License in 2017, the same year in which it donated at least $50,000 to Governor Andrew Cuomo and just months before it donated
at least an additional $90,000 to Governor Cuomo and at least $20,000 to other New York officials, including a $25,000 donation to Governor Cuomo “the day before the company opened a dispensary on Fifth Avenue.”


StaffMarch 14, 2022
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ASCEND WELLNESS HOLDINGS

ANDREA CABRAL – CEO OF MASSACHUSETTS, ASCEND WELLNESS HOLDINGS (OTC: AAWH)

 

What is your proudest accomplishment in the cannabis industry?

My proudest accomplishment is my contribution to the creation and growth of a vertically integrated adult-use cannabis company in Massachusetts in 2018 right on the heels of adult-use legalization. AWH started in Massachusetts with five people and we were one of the first, if not the first, adult-use cannabis companies in the state. MassGrow and Ascend Mass – our cultivation, manufacturing, and retail operations – have grown enormously in less than four years and during a pandemic where the adult-use market was initially deemed non-essential. It still amazes me.

 

Do you feel that the cannabis industry has more opportunities for female-identifying people than other industries?

As a relatively new and therefore more open industry, cannabis presents more opportunities for female-identifying people, and certainly, there are a lot of female entrepreneurs in the space, but executive and middle managerial leadership is still predominantly male. There are a number of reasons for this that are not specifically tied to gender bias, but that bias does exist and the cannabis industry is not immune to its consequences. Companies must be very intentional and focused on recruiting and retaining female participation and leadership at all levels. It does not happen organically.

 

Do you feel you have to work twice as hard as male colleagues or do you think the industry has moved past that?

I don’t personally feel that I have to work twice as hard as male colleagues, but that is due in part to the professional background I brought to the job and my title, but I am certainly aware that my circumstances are unique. Again, the cannabis industry is not immune to perceiving competence and judging work performance very differently based on gender.

 

What was your biggest challenge in business and how did you overcome it?

My biggest challenge was learning the business of business.  I came to cannabis from a 28-year career in government, politics, and law enforcement. Learning about private industry, particularly a new and exciting one like cannabis was a very big challenge, but such a fun and rewarding one. Also, the nexus between government and cannabis created by legalization and regulation is just fascinating given their historical antagonism and I wanted to be part of how that relationship developed in Massachusetts.

 

What has you or your company done to help give more opportunities for women?

I have been very intentional about hiring female-identifying people at all levels and wherever possible. But mere hiring isn’t enough. There has to be a commensurate focus on retention and the kinds of opportunities for professional growth and advancement that make retention sustainable. Those things can be very different for men and women. It’s also a challenge because there’s a lot of natural attrition in cannabis and while many are comfortable getting into the industry, many still are not. Federal legalization would change that.

 

What are your personal goals for 2022?

My personal goals for 2022 involve pushing for review of state regulations to make them more consonant with the actual impact the industry has had on the state versus the impact policy and law makers feared it would have.  None of the anticipated public safety consequences, which heavily influenced regulatory content, have occurred.  Cannabis companies not only bring significant revenue to municipalities and the state, their presence improves the communities in cities and towns where they operate in many ways. The stringency of the regulations should reflect that.

 

Bio

Andrea J. Cabral is the Massachusetts CEO of Ascend Wellness Holdings, a vertically integrated, multi-state cannabis company.  She leads MassGrow LLC, a cannabis cultivation and manufacturing company and Ascend Mass LLC, a multi-site adult use retail cannabis company.  In 2020, she was listed by Forbes Magazine as one of Fifteen Powerful and Innovative Women in Cannabis.  Her leadership in AWH follows a 28-year career in government and public service.  Andrea is a former Assistant District Attorney, the twice-elected Sheriff of Suffolk County and a former Patrick Administration Public Safety Secretary.  She is the Chair of the Public Safety and Community Mitigation Subcommittee of the Cannabis Advisory Board appointed by Attorney General Maura Healy as an expert in criminal justice reform.

 

Ms Cabral also provides weekly commentary and legal analysis on Boston Public Radio, The Jim and Margery Show on WGBH Boston Public Radio.

 

She is a graduate of Boston College and Suffolk University Law School.


Debra BorchardtMarch 9, 2022
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5min11090

In the continuing battle between MedMen (OTC: MMNFF) and Ascend Wellness (OTC: AAWH), Ascend’s CEO Abner Kurtin addressed the situation during the company’s earnings call after the market closed. On Monday, MedMen filed another court document amending its allegations over political influence peddling. In that filing MedMen essentially said that it may have had incorrect details, but the company still stands by its accusations. It has accused the New York political machine of approving the acquisition but only after the Governor’s office received a donation from Ascend.

According to the transcript, Kurtin said, “Before moving on, I want to address our pending New York transaction, an ongoing litigation related to the license, we are under contract to purchase from MedMen New York. As you likely know, we are in litigation with MedMen regarding what we call their invalid termination of our investment agreement. The case is plain and simple, for the lawsuit is just a desperate attempt to throw everything but the kitchen sink at us to make a quick buck, it’s a case of seller’s remorse, you can’t back out of a home sale once you realize that you could have gotten a better deal. This is no different.

In January after we filed our lawsuit against MedMen, the parties agreed to maintain the status quo until the trial. Today (March 8) MedMen dropped at least two false and disparaging allegations regarding a meeting at a fundraiser, which was representatives of the governor’s office and Ascend that MedMen included without any basis in their original counterclaims. This is just further proof that MedMen will say anything including making false accusations to try to get more money from us.

At the beginning of the action together with MedMen, we agreed on an accelerated trial schedule. Just yesterday, we filed a cease and desist letter to stop MedMen from marketing the asset, which is a brazen attempt to violate the status quo. We are very confident in our position and we have no doubt that the lawsuit will end in our favor, with MedMen obligated to proceed with the transaction and pay our legal fees. Once the dispute is resolved, we intend to proceed with our canopy expansion plans and readying the assets for the start of adult-use sales in New York. It is time for MedMen to honor its obligations under the agreement so we can proceed to build the business for the benefit of medical patients in New York as MedMen has failed to do while owning the license.”

Kurtin was asked by analyst Ty Collin of Eight Capital about the New York market, assuming Ascend won the legal battle. Collin’s wanted to know whether even if the company won the battle, it was going to be far behind its competitors.

Kurtin answered, “Look, I think that we’re hopeful, we agreed to an expedited trial. We’re hopeful that sometime this year we get resolutions. We do acknowledge that the New York legal system moves at its own pace. And the sellers have a long history of litigious behavior. So you never know what kind of appeals they might pursue. But we think this is an open and shut case, and therefore summary judgment and the quick result is a possible outcome.

In terms of being behind, we think we’re in good shape. We can’t disclose everything we’re working on now. But we think we have a good opportunity to join adult-use when it opens with substantial canopy through actions that we’re doing. So we’re very hopeful here that we’re going to be able to be in a great position in New York despite the current litigation. Thank you.”

Editors note: Green Market Report made some slight grammatical corrections to the quote. Transcribed comments often have errors in grammar and the corrections do not take away from the meaning. It just makes it easier to read.


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