Ascend Wellness Archives - Page 2 of 3 - Green Market Report

Debra BorchardtMarch 8, 2022
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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 BorchardtFebruary 23, 2022
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The latest twist to the ongoing battle between Ascend Wellness (OTC: AAWH) and MedMen Enterprises Inc. (OTC: MMNFF) is that MedMen is now going to take back some of its recent influence-peddling accusations. The conflict is over MedMen’s agreement to sell its New York assets to Ascend, which MedMen is now trying to terminate. Back in January, MedMen alleged that Ascend’s CEO Abner Kurtin used political influence with New York Governor Kathy Hochul and was shortly thereafter able to obtain an email saying the license transfer from MedMen to Ascend was approved.
MedMen made the following accusations:
1) AWH New York, LLC President, T. Andrew Brown, attended an in-person fundraiser for Governor Kathy Hochul in Manhattan on December 8, 2021
2) Ascend’s Chairman and Chief Executive Officer, Abner Kurtin, met with Governor Hochul’s secretary “and other senior state officials” in Albany on December 10, 2021.

Ascend’s legal representative Mylan Denerstein, of Gibson Dunn said, “After we provided documentary evidence proving MedMen’s assertions were demonstrably wrong, they indicated they will withdraw their false allegations. Like any house of cards, MedMen’s claims collapsed when exposed to the slightest scrutiny. Ascend will continue to correct the record and looks forward to entering New York’s cannabis market once its rights are vindicated in court.”

Bad Vibes

MedMen had agreed to sell a majority of its New York assets to Ascend Wellness, but the deal was dependent upon approval from New York State. That approval came on December 16, 2021, but MedMen claimed the communication on that day stated the approval was “conditional.” MedMen said that it needed final approval by December 31, 2021. Ascend claimed in its complaint, that it went back to the Office of Cannabis Management (OCM) and asked for clarification. The OCM stated that its approval was in fact final.

MedMen said in its countersuit that on December 28th, Richard Zahnleuter the General Counsel of the Office of Cannabis Management (which supports but does not direct the Cannabis Control Board) contacted MedMen to say he might need up to 60 days to finish its review. However, MedMen also said that Zahnleuter emailed the following evening saying that the December 16th email did give the “final” approval for the deal. Making things even more complicated, MedMen says it spoke with Zahnleuter on the phone who said he had been “pressured” to send the email saying the December 16th email gave final approval. Zahnleuter would not disclose to MedMen who had pressured him.

MedMen wants the court to declare the termination was valid and it also wants to keep the money Ascend gave for the deposit and the working capital advance. Ascend gave MedMen some much-needed cash, including an upfront $4 million cash infusion in December 2020 in connection with the execution of a letter of intent between the parties and a further $4.46 million to cover MedMen’s working capital needs and Utica facility site improvements and expansion during 2021. MedMen also wants a termination fee to be paid.


Debra BorchardtFebruary 15, 2022
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Ascend Wellness (OTC: AAWH) has pulled off the gloves in its latest complaint (filed on February 14, 2022) against MedMen (OTC: MMNFF) calling the company, “A broken and mismanaged cannabis company that has repeatedly reneged on its promises to its employees, suppliers, shareholders, medical marijuana patients, regulators, and now Ascend.” MedMen had agreed to sell its New York assets to Ascend, but the deal was contingent upon New York State giving approval to the deal. The state regulators gave an ambiguous approval in December but tried to clarify that language in the waning hours of 2021. MedMen has since refused to close the deal saying the state hadn’t really given final approval and accusing the state and Ascend of influence peddling.

Ascend said in its latest court filing, “Not only has MedMen refused to close, it has picked Ascend’s pocket in the process, taking millions of dollars from Ascend after the deal was inked to stand up its financially stressed operations. Even worse, MedMen has lied about its reasons for doing so. The real reason is simple—MedMen has seller’s remorse and hopes to strike a better deal with a new buyer. Each day that MedMen fails to live up to its end of the bargain by refusing to close is not only harmful to Ascend, but to New Yorkers as MedMen’s license languishes. MedMen must be held to account for its wrongdoing.”

Ascend went on to say, “All told, Ascend made almost $8.5 million in cash payments to bail out MedMen. MedMen needed this cash infusion because its incompetent and unethical leadership had driven the company to the brink of insolvency and rendered it a pariah in its own business community.” Ascend said that it paid for MedMen’s operating costs, which totaled about $250,000 per month. In addition to the $4 million paid in 2020 for MedMen’s operating costs, over the course of 2021, Ascend paid an additional $4.5 million for MedMen’s operations. Ascend said without this money, MedMen would have faced tremendous difficulty meeting its financial obligations, leaving its creditors empty-handed, its employees potentially jobless, and thousands of seriously ill patients across New York with less access to the already limited supply of medical marijuana.

The filing also states that once MedMen got money from an investment with Tilray and Serruya Private Equity, it had the money to slow-walk the deal and wait to find a buyer that would pay more. Michael Serruya is now the CEO of MedMen.

The filing also states that “In 2019, Mr. Serruya was at the center of allegations that he violated the securities laws, engaged in self-dealing, and manipulated the stock of a different cannabis company. The MRTA requires leadership changes of this nature to be reported to the OCM; it is unclear whether MedMen ever did.” The filing referenced “Text messages show Cannabis investors Defrancesco & Serruya allegedly Colluded with Clarus Securities’ Christodoulis in Multiple Stocks, TERI BUHL (Sept. 20, 2019), https://www.teribuhl.com/2019/09/20/text-messages-show-cannabis-investors-defrancescoserruya-allegedly-colluded-with-clarus-securities-christodoulis-in-multiple-stocks/.”

The filing is a laundry list of bad deeds by MedMen plus a revolving door of CEO’s and stating that “As a result of MedMen’s actions, the New York Medical Cannabis Industry Association decided to cut ties with the company. MedMen is a pariah in its own industry. “


Debra BorchardtFebruary 11, 2022
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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.

 


StaffFebruary 3, 2022
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Ascend Wellness Holdings

Danielle Drummond / Vice President of Social Equity

Drummond has more than 15 years of experience in combating racial bias and helping establish culturally responsive practices in the fields of education, criminal justice, and community development. As the newly appointed Vice President of Social Equity, a newly created position at Ascend Wellness Holdings (OTC: AAWH), Drummond works alongside Andrew Brown, president of AWH New York, to develop and lead community partnerships and restorative justice initiatives across the Company’s existing five-state footprint and spearhead its entrance into the New York market. Before joining AWH, Drummond served as Deputy Chief of Community Engagement at the Suffolk County District Attorney’s Office in Boston, MA.

When did you formally enter the cannabis space?

I entered the cannabis industry on November 29th, 2021, when I accepted the VP of Social Equity position at Ascend Wellness Holdings.

What made you decide to work in the cannabis industry?

I have worked alongside communities to champion social justice in the education, public health, and criminal justice reform fields. Entering the cannabis industry now, when it is expanding its footprint, allows me to be creative and at the forefront of shaping how companies like Ascend are thinking of social equity and corporate responsibility.

Do you feel there is more opportunity for Black Americans in the cannabis industry versus a more traditional industry? Yes or no and why?

The barriers to entry in Cannabis are the same as in other industries. Systemic racism, lack of access to capital, and other resources are societal issues and therefore replicate themselves across all systems. The  Cannabis industry being newer, has the opportunity to acknowledge this reality and be proactive about addressing it.

What is the most successful social equity effort in your opinion? Can be a charity or company program. 

Many grassroots organizations run by Black and Brown people are doing excellent work in the Cannabis space to raise awareness of inequities and educate and advocate for policy changes. The most successful programs are those run by the community for the community. These programs will intimately understand the needs of those disproportionately impacted by the war on drugs and systemic racism. WOCC comes to mind as an example, Women of Color in Cannabis, an organization dedicated to ensuring communities in NY, NJ, and nationwide receive education and advocacy around cannabis.

What is your personal goal for 2022?

My goal for 2022 is to partner with the communities Ascend serves and leverage our position and resources to their benefit. Ascend will partner with national and local organizations to host expungement clinics across all of our markets, offer mentorship and business incubation, provide free educational workshops for our communities, and invest in those communities through grantmaking.


StaffFebruary 1, 2022
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Ascend Wellness Holdings

T. Andrew Brown / President of AWH New York 

Leveraging his wealth of knowledge as a distinguished lawyer and public servant, Mr. Brown is focusing his efforts on equity, access, and affordability in NYS’ developing adult-use cannabis program, as well as improving offerings for medical cannabis patients.

Green Market Report asked these questions of all our featured executives for Black History Month:

When did you formally enter the cannabis space?

1. I formally entered the cannabis industry in October 2021 when I became the President of Ascend Wellness Holdings, New York. Before that, my involvement was as an attorney advising on legislation and pertinent regulations in New York. As President of the New York State Bar Association, I have also been involved with hosting many cannabis programs educating attorneys and industry stakeholders in the various aspects of the market.

What made you decide to work in the cannabis industry?

2. I have been interested in the cannabis industry since the early days of discussions around legalization. I have studied the market as it’s opened up around the country and looked forward to it finally arriving in New York. Following legalization in New York, it was just a matter of time before I formally entered the cannabis industry.

Do you feel there is more opportunity for Black Americans in the cannabis industry versus a more traditional industry? Yes or no and why?

3. One of my great disappointments is the lack of diversity within the cannabis industry nationally. Despite the disproportionate injustices that fell upon communities of color due to the misguided marijuana laws, there remains a gross underrepresentation of BIPOC in the industry. There are countless ways to join the industry, as entry-level employees, management, and ownership. Greater diversification will lead to an overall improved market and more significant advancement of social equity.

What is the most successful social equity effort in your opinion? Can be a charity or company program. 

4. In New York, there is enormous potential for the advancement of social equity under the adult-use legislation. Anticipated regulations will give further insight into just how this can be achieved. The drafters of the legislation were smart the bake in social equity, making it a core component of the law. Ascend Wellness Holdings will seek every opportunity to advance social equity for both the larger good of the industry and the citizens of New York. We have put together an aggressive plan to implement expungement clinics and other educational programs by partnering with human and legal services agencies and the New York State Bar Association. We are also developing incubator programs to help build and successfully launch social equity businesses looking to enter the industry.

What is your personal goal for 2022?

5. My personal goal is to do all that I can to improve the New York cannabis market by leveraging Ascend’s cannabis knowledge and expertise, along with its social consciousness, to maximize the benefits made possible through legalization for the good of all New Yorkers.


Debra BorchardtJanuary 24, 2022
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The battle between Ascend Wellness (OTC: AAWH) and MedMen Inc. (OTC: MMNFF) is getting messier by the day. The latest shot is coming from MedMen whose counterclaim alleges that Ascend’s CEO Abner Kurtin used political influence with New York Governor Kathy Hochul and was shortly thereafter able to obtain an email saying the license transfer from MedMen to Ascend was approved.

MedMen had agreed to sell a majority of its New York assets to Ascend Wellness, but the deal was dependent upon approval from New York State. That approval came on December 16, 2021, but MedMen claims the communication on that day stated the approval was “conditional.” MedMen said that it needed final approval by December 31, 2021. Ascend claims in its complaint, that it went back to the Office of Cannabis Management (OCM) and asked for clarification. The OCM stated that its approval was in fact final.

MedMen says in its countersuit that on December 28th, Richard Zahnleuter the General Counsel of the Office of Cannabis Management (which supports but does not direct the Cannabis Control Board) contacted MedMen to say he might need up to 60 days to finish its review. However, MedMen also said that Zahnleuter emailed the following evening saying that the December 16th email did give the “final” approval for the deal. Making things even more complicated, MedMen says it spoke with Zahnleuter on the phone who said he had been “pressured” to send the email saying the December 16th email gave final approval. Zahnleuter would not disclose to MedMen who had pressured him.

Political Pressure

MedMen is accusing Ascend President Andrew Brown of attending a fundraiser for Governor Kathy Hochul on December 10th – days ahead of the email in question. Two days later, MedMen says CEO Kurtin met with several state leaders in Albany and MedMen says this is why the state suddenly granted the approval. MedMen goes on to accuse the Cannabis Board of not being independent of the Cannabis Office. The fundraiser was apparently targeted towards cannabis clients and was presumably attended by other representatives from other cannabis companies. Ascend would likely not have been the only cannabis company in attendance.

No Deal

MedMen claims it can terminate the deal since it didn’t receive final approval, whereas Ascend claims that, according to MedMen, while the language could be ambiguous in parts, the intent was for approval and so the deal should be consummated.

MedMen wants the court to declare the termination was valid and it also wants to keep the money Ascend gave for the deposit and the working capital advance. Ascend gave MedMen some much-needed cash, including an upfront $4 million cash infusion in December 2020 in connection with the execution of a letter of intent between the parties and a further $4.46 million to cover MedMen’s working capital needs and Utica facility site improvements and expansion during 2021. MedMen also wants a termination fee to be paid.

The December 16th email read:

RESOLVED, the Board approves by majority vote through the adoption of this resolution, the change of ownership of MedMen NY, In., contingent upon the review of the proposed investment by the Office staff for compliance with the Cannabis Law, its corresponding regulations, and any other contingencies and conditions as determined by the Board and the Office.

The next correspondence sought to clarify the ambiguous nature saying:

This is to confirm that the Board, efffective December 16, 2021, approved of the referenced change in ownership of MedMen NY, Inc. While such approval constitutes final approval for the purposes of closing the transacti0n and enacting the transfer of ownership, MedMen NY, Inc.,must, as an ongoing Registered Organization, on a continuing basis, comply with all statutory and regulatory requirements, obligations and terms of operation. The Office of Cannabis Management will continue to hold MedMen NY, Inc. accountable for any acts or ommissions constituting violations of such provisions of law, whether in the past, present or future, including but not limited to, non-compliance with the prior written approval provisions of Section 1004.10(b)(5).

 

 

 

 

 


Debra BorchardtJanuary 14, 2022
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Ascend Wellness Holdings, Inc. (CSE: AAWH.U) (OTCQX: AAWH) is ramping up its efforts to get MedMen (OTC: MMNFF) to complete the deal that the two companies had arranged with regards to the New York properties. On Friday, Ascend filed a complaint in the Commercial Division of the Supreme Court of the State of New York in New York County against MedMen NY, Inc. and MM Enterprises USA, LLC in which Ascend is trying to get MedMen to go through with the deal that MedMen is trying to get out of.  In addition, AWH has made an application for a preliminary injunction and temporary restraining order to maintain the status quo between the parties and to prevent any actions by the MedMen parties that would result in additional encumbrances on the equity or assets of MedMen NY, Inc.

The Original Deal

The two companies had agreed in February of 2021 Ascend would invest $73 million in order to receive controlling interest in 86.7% of the company’s New York properties. In addition, Ascend had an option to purchase the remaining amount in the future. MedMen was in pretty bad shape at the end of 2020. The company was heavily in debt and its liabilities exceeded its assets by 50%. MedMen continued to lose money quarter after quarter and its operational costs exceeded 100% of its gross revenues making profitability an unlikely hope rather than a reality. Additionally, MedMen’s revenue was dropping and its losses increased quarter over quarter. MedMen spent much of 2020 attempting to restructure, sell its assets and renegotiate its many obligations. The company was also facing issues with its founders and a lawsuit by the company’s former Chief Financial Officer James Patterson, which MedMen won.

Ascend stepped in and gave MedMen some much-needed cash, including an upfront $4 million cash infusion in December 2020 in connection with the execution of a letter of intent between the parties and a further $4.46 million to cover MedMen’s working capital needs and Utica facility site improvements and expansion during 2021.

NY Approval

The deal though was contingent upon approval by the state of New York. MedMen submitted an application to the New York regulators as of March 11, 2021, for approval of the
sale of MedMen NY to Ascend. That application recited that MedMen needed an immediate cash infusion from Ascend to continue its operations. The process hit a snag when halfway through 2021, the state transferred oversight of the cannabis program from the Department of Health to the newly created Office of Cannabis Management (OCM). Ascend claims that MedMen did not pursue the state’s approval causing Ascend to step in and push the process along. Finally, the state gave its approval on December 16.

However, the use of the word “conditionally” in the approval caused MedMen to claim that the approval wasn’t final and so they could terminate the deal. According to the complaint, Ascend went back to the OCM and asked for clarification. The OCM stated that its approval was in fact final. Still, MedMen insisted it wasn’t and finally on December 29, the OCM contacted MedMen to say it was indeed final.

The deal stated that MedMen had to close within five days of receiving approval from the state of New York. Still, MedMen insists it didn’t get approval by December 31 even though the emails exist that prove it did. If that wasn’t bad enough, Ascend claims that  MedMen NY paid an improper $500,000 dividend to its parent company, likely financed by advance dollars paid to MedMen by Ascend.

Looming Debt

Ascend also stated in its complaint that MedMen NY has approximately $100 million dollars of loans for which MedMen NY capital stock has been pledged as collateral in the event of default. “These loans were made to the MM Enterprises’ subsidiary, MM Can USA, Inc. by Hankey Capital, LLC. Once the original deal closed, Ascend would issue to MedMen NY  a promissory note in the amount of $28 million and that MedMen NY would subsequently assign the Closing Note to Hankey. Hankey would then release MedMen NY from any liability with the loan.  The loans from Hankey are scheduled to come due on January 31, 2022, and February 1, 2022. “In the event of default on the MM Can loan agreements, Hankey is permitted
to foreclose on the pledged MedMen NY ownership interest and can sell the foreclosed upon interest at a public or private sale or retain the interest for its own account. In such event, an
order specifically enforcing MedMen NY’s obligation to close the Transaction will be meaningless.” MedMen agreed to the Hankey loan in 2018.

In other words, if MedMen defaults, then Hankey gets the stock and Ascend is left empty-handed.

New MedMen

In November, Michael Serruya was named Chairman and Interim CEO, effective immediately. Serruya succeeded outgoing Chairman and CEO Tom Lynch, who held the position since 2020 and oversaw the company’s operational turnaround. Serruya joined MedMen’s board in August 2021 as part of a $100 million investment in the company by Serruya Private Equity to expand its operations in key markets and identify and accelerate further growth opportunities across the United States. Some sources have speculated that Serruya believes the company sold the MedMen NY properties at a discount and that is the reason they want to terminate the deal. Essentially, the new management believes it could get more money for MedMen NY.

 

 

 


StaffJanuary 5, 2022
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Ascend Wellness Holdings, Inc. (CSE: AAWH.U) (OTCQX: AAWH) may be fighting with MedMen over the New York investment, but the company did manage to close its acquisition of Chicago Alternative Health Center, LLC and Chicago Alternative Health Center Holdings, LLC. The acquisition of the two companies called Midway includes two operating adult-use and medical cannabis dispensaries located at 5650 S. Archer Avenue in Chicago and 9820 S. Ridgeland Avenue in Chicago Ridge. The dispensaries were originally branded as “Midway” and have been rebranded to “Ascend by Midway.”  Ascend has been consulting on the operations of these locations and consolidating the financials since the transaction agreement was signed in December 2020.

“We’re thrilled to expand our dispensary and cultivation capacity in Illinois by planting our greenhouse and closing on this transaction with Midway, one of the first operators in the state with a strong reputation among consumers and strategically-located dispensaries,” said Abner Kurtin, CEO of AWH. “We will continue operating these assets and furthering our mission by offering Illinois consumers improved access to premium cannabis and a streamlined and elevated retail experience. As the most populous city in the state of Illinois and the third most-populous city in the U.S., following New York City and Los Angeles, Chicago is a very important market for us and we are happy to solidify our presence in the region.” Ascend said that the Archer and Ridgeland Ave. dispensaries represent its seventh and eighth retail locations in Illinois.

In addition to the deal closing, Ascend also said that it began planting its newly expanded cultivation facility in the state. Previously, Ascend had 58,000 sq. ft. of indoor canopy at its Barry, Illinois cultivation facility. The Company recently added a greenhouse with 55,000 sq. ft. of canopy at the same location and has since planted four strains and 3,600 plants in the new space.

Since state legalization in January 2020, Illinois’ legal cannabis market has reached over $1 billion in revenue with in-state residents accounting for $777 million of total sales. The Ascend by Midway Dispensaries will expand access to quality cannabis products to thousands of individuals in the Chicago area.

 


Debra BorchardtJanuary 3, 2022
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Ascend Wellness Holdings, Inc. (CSE: AAWH.U) (OTCQX: AAWH) has reported that MedMen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF) is trying to back out of the deal between the two companies. Ascend said that MedMen is challenging and disregarding the determination of the Office of Cannabis Management and the Cannabis Control Board of the State of New York which approved the transaction. MedMen had initially requested the New York State regulators approve the transaction in March 2021. Ascend said last week that New York had given its approval and that the company intended to close the transaction soon after.  Now MedMen is disputing the NY Office of Cannabis Management regulatory approval, is refusing to close and is attempting to terminate the transaction.

Ascend said in a statement, “As New York and other states adopt adult use of cannabis, MedMen’s actions send the worst message – namely, that certain cannabis companies cannot be trusted to keep their word. AWH calls on MedMen to honor the commitment it made to New York, to its own investors and to AWH and promptly close the transaction. AWH will continue to pursue all measures to encourage MedMen to honor the Investment Agreement and close the transaction.”

Ascend accused Medmen of materially breaching the previously announced definitive investment agreement among AWH, MedMen NY, Inc., MM Enterprises USA, LLC, and AWH New York, LLC. The AWH Parties previously waived all closing conditions in favor of the AWH Parties, following the receipt of the required regulatory approvals, and requested to close the transactions contemplated by the Investment Agreement within the five business day period required under the Investment Agreement. AWH has made repeated attempts to close the transaction.

Original Acquisition Plan

MedMen so far hasn’t responded to the accusations that Ascend Wellness has leveled at the company. The two companies had agreed back in March for Ascend to make an investment of approximately $73 million in MedMen NY Inc. or MMNY. Following the investment, Ascend will hold a controlling interest in MMNY of approximately 86.7% and will have an option to buy MedMen’s remaining interest in MMNY in the future. Also in the agreement, Ascend must also make an additional investment of $10 million in exchange for additional equity in MMNY. This investment will also be used to repay MMNY’s senior secured lender if adult-use cannabis sales commence in MMNY’s dispensaries.


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