MedMen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF) announced that it plans to sell its Florida assets to Florida-based private company Green Sentry Holdings LLC for $83 million. MedMen said in a statement that it is a cash deal that includes the sale of substantially all of MedMen’s Florida-based assets, including its license, dispensaries, inventory, and cultivation operations. Additionally, MedMen agreed to license its trademarks in the state for two years, subject to termination rights, for a quarterly revenue-based fee.
“As MedMen continues to transform its business model and position itself for future growth, our go-forward strategy is going to include an asset-light model that enables us to leverage the power and strength of the MedMen brand,” said Michael Serruya, MedMen’s Chairman and Interim CEO. “We feel confident this model will deliver strong financial results and opportunities for growth across many states and will continue to identify trademark licensing opportunities that will introduce the MedMen brand and retail experience to other markets across the United States and internationally.”
Green Sentry is associated with Brady Cobb, who is an attorney, lobbyist, strategist, and consultant based in South Florida who focuses his practice in the areas of regulated medical cannabis, Federal and State government relations, and regulatory matters. Brady is also a cannabis entrepreneur who co-founded Florida cannabis operator Bluma Wellness and sold it to Chicago-based Cresco for $213 million in April. He also has an incredible family history – his father was a pot smuggler for Pablo Escobar in Florida in the 1970s and 1980s. Perhaps Green Sentry will fare better in its dealing with MedMen than Ascend Wellness, which can’t seem to get MedMen to let go of its New York assets.
According to MedMen’s last annual report, the company had six stores in Florida that serviced the medical-only market. MedMen also operates a cultivation and production facility in Eustis, Florida, which is approximately an hour’s drive north of Orlando. The company also has five registered trademarks in Florida. The company also said that revenues in Florida had not been substantially impacted by COVID. However, the annual report stated, “During the year ended June 26, 2021, the company strategically closed five retail locations in Florida to provide better and consistent supply for its patients. While these dispensaries remain temporarily closed as of June 26, 2021, the company saw improved plant yields and quality driving improved margins.”
The transaction is subject to customary closing conditions, including applicable regulatory approvals. The deal is expected to close in late April or early May 2022, pending the receipt of all required contractual consents and governmental approvals including the requisite change of ownership approval from the Florida Office of Medical Marijuana Use.
Ascend Wellness Update
Of course, MedMen had agreed to sell its New York assets to Ascend Wellness but has since decided to try to terminate that deal. In the latest development, MedMen submitted documents asked that the court send all papers to a lawyer named Peter Fountain when they had been going to Alex Spiro, both at the law offices of Quinn Emanuel Urquhart & Sullivan, LLP.