MedMen Archives - Green Market Report

Debra BorchardtOctober 3, 2022
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5min23690

It seems MedMen’s (OTC: MMNFF) recent pushback against Thor Equities is having a rippling effect across the real estate market. Last week, Green Market Report published a story about MedMen’s legal efforts with regard to the rental payments for a property in Chicago. MedMen had signed a lease on a property with Thor Equities, but then quit paying the rent. Thor Equities says MedMen owes them almost $1 million. The complaint notes that there isn’t any disagreement over the lease and the rent not being paid. MedMen would prefer not to have to pay the money that is owed.

The issue that is irritating some cannabis industry insiders is that MedMen doesn’t want Thor Equities to move the case from the New York Federal court where it was originally filed to a California state court. MedMen wants the case to stay in New York and is arguing that the lease contract isn’t enforceable because cannabis is federally illegal. Real estate companies were already leery of renting to cannabis businesses and this argument is another reason to stay away.

Kristin Jordan, the founder of Park Jordan is a commercial real estate broker and lawyer in New York and consults with cannabis companies. The first applicants for New York are called the Justice applicants because they, or their family members, have previously been arrested and convicted of an applicable cannabis offense. She said, “I recently spoke with a prominent NYC broker and was informed that his clients have received upwards of 12 LOI’s (letters of intent) from CBRE, the firm tapped by the Dormitory Authority of the State of New York to secure sites for the Justice applicants. He said the landlords do not understand the program and are not interested in this at all.” DASNY (Dormitory Authority of the State of New York) is the agency chosen to oversee the financing of the build-out construction of the retail sites.

Thor Equities was successful in the courts in California against High Times which took over a lease contract when it acquired a license from Harvest Health. The court ruled that the back rent had to be paid and that the contract was enforceable. High Times owes $5 million in back rent.

If MedMen is successful in its argument in New York, it would easily scare away most landlords if they think a cannabis tenant could just walk away or that they would get in trouble for renting to a company that is operating in a federally illegal industry. So far, the judge in the case has been critical of Thor Equities and has made the company reword its complaints. That has put the real estate community on edge. What if the case stays in New York & what if Medmen wins? What landlord would ever sign a contract with a cannabis company if the courts won’t enforce the contract?

In the early days of the cannabis industry, most companies raised money to outright buy the properties they wanted to occupy. Banks wouldn’t lend for a mortgage and landlords didn’t want to rent to them, so they paid cash. Cannabis businesses often ended up in depressed areas of real estate because prices were more affordable. As more states legalized cannabis, landlords had begun to gain some comfort with renting. 

If cannabis companies have to go back to the days of buying properties, it could further dampen efforts in new markets like New York. Commercial real estate is incredibly expensive even in the most undesirable neighborhoods.


StaffJuly 18, 2022
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6min3310

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

ON THE SITE

MedMen Sued For Almost $1 Million In Back Rent

Thor Equities must be seeing red whenever a cannabis company wants to rent one of its spaces. The real estate company has sued the High Times group in San Francisco for not paying rent on space and now it is going after MedMen  (OTC: MMNFF) for the same thing. In a complaint filed on July 15, 2022, Thor Equities claims MedMen owes the company $950,960.02 in unpaid rent for 942-944 West Fulton Street, Chicago, Illinois 60611. The lease was signed June 28, 2019, and Thor says MedMen hasn’t paid any rent since August 2021. Read more here.

Red White & Bloom Brands Misses Audit Target

Red White & Bloom Brands Inc. (CSE: RWB)(OTC: RWBYF) slid in late trading on Monday after further auditing delays postponed the release of key financial report cards for the second time this year. The company released the news after the markets closed on Friday and on a week when it was expected to deliver its financial numbers. Read more here.

New York Readies Retail Licenses For Adult-Use Sales

The New York Cannabis Control Board (CCB) approved rules on Thursday to establish retail applications for the sale of adult-use cannabis. The state could open up these applications as soon as August, which could potentially set the stage for sales happening before the end of the year. This has been the goal of the CCB, but it seemed like it miss that target. Read more here.

Stable Road’s Space SPAC Faces SEC Charges for Misleading Investors

The SEC has charged cannabis investor Stable Road Capital and its SPAC Stable Road Acquisition Corp. (OTC: SRACU) which became the stock Momentus (NASDAQ: MNTS) for misleading investors. That news caused an investor lawsuit to have the green light to move forward according to a report by Law360. Stable Road is well known in cannabis circles for its financial services to many companies like MedMen (OTC: MMNFF) and Sundial (NASDAQ: SNDL). Investors are accusing the company of pivoting from its initial focus on cannabis to space and then subsequently not telling potential investors of the problems it faced getting regulatory approvals for its space plans. In addition to that, it didn’t disclose its CEO Mikhail Kokorich’s Russian origins. Read more here.

5 Steps To Making A Smart Investment in Psychedelics

Financial advisors will always remind an investor that any investment comes with risk. It can be complicated because it’s more than just following market metrics about past earnings and current standings throughout the history of a company. There are world events that affect many investments across the board—for instance, today’s investment risks include issues with oil supplies and gas prices, the war in Ukraine, and what the current administration is doing to combat inflation, just to name a few. Read more here.

IN OTHER NEWS

Curaleaf International

Curaleaf International, a vertically integrated cannabis company, announced that it has appointed Miles Worne as President, effective 11 July 2022. Antonio Costanzo, the company’s former CEO, will remain with the company in a consultancy capacity, with his role transitioning to focus on M&A and Regulatory Affairs. Mr. Worne’s appointment as President is part of the company’s long-term strategy to drive growth as the European cannabis market opens up to adult-use, as well to ensure continued expansion in the medical cannabis market. Read more here.

Clever Leaves Holdings Inc.

Clever Leaves Holdings Inc. (NASDAQ: CLVR, CLVRW), a multinational operator and licensed producer of pharmaceutical-grade cannabinoids, announced today the first commercial export to Israel of high THC Flower for medical use from its facility in Portugal through its partnership with InterCure (Nasdaq: INCR, TSX: INCR.U, TASE: INCR). With this initial shipment, medical cannabis patients in Israel will now have access to Clever Leaves’ cannabis flower grown in its IMC-GAP equivalent cultivation facilities. Read more here.

Small Pharma Inc.

Small Pharma Inc. (TSXV: DMT) (OTCQB: DMTTF), a biotechnology company focused on short-acting psychedelic-assisted therapies for mental health conditions, published its financial results for the quarter ended May 31, 2022. A full copy of the results can be found under the Company’s profile on SEDAR at www.sedar.com. Unless otherwise indicated, all currency references are in Canadian dollars. Read more here.


StaffMay 24, 2022
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8min1550

The Daily Hit is a recap of the top cannabis business stories for May 24, 2022.

ON THE SITE

Live Blog from WEF 2022 in Davos Switzerland

Green Market Report editor-in-chief Debra Borchardt blogs live from the Medical Psychedelics Series, at the World Economic Forum being held in Davos Switzerland. Read more here.

MedMen Wins Suit Against 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. Read more here.

Illegal Cannabis Lounges in NYC

These consumption lounges are operating without licenses and it seems the city and state don’t care. Since the adult-use license program hasn’t been written and approved, these operations are technically violating the law. No law means no violations. So there really isn’t anything law enforcement can do. These lounges range from the first to market Happy Munkey to pop-up neighborhood lounges that are often located next to illicit street sellers. Read more here.

Psychedelics Companies

As the industry matures, there are clear leaders in the pack of psychedelics companies who are positioned to continue driving industry development. Compass Pathways, Atai Life Sciences, and Cybin are generally considered the top three companies in the industry, asserting their dominance in the market, with Field Trip Health and Seelos Therapeutics as psychedelics companies to watch. Read more here.

IN OTHER NEWS

Aleafia Health Inc.

Aleafia Health Inc. (TSX: AH, OTCQX: ALEAF) is pleased to announce that its upward trend in market share, purchase orders, and new SKU launches has continued in 2022’s first four months, following on from the growth in the quarter ended December 31, 2021. The Company has seen strong advances in its largest adult-use categories: flower, pre-rolls and vapes. Read more here.

Curaleaf Holdings, Inc.

Curaleaf Holdings, Inc. (CSE: CURA /OTCQX: CURLF), an international provider of consumer products in cannabis, will begin adult-use sales at its Edgewater Park, New Jersey dispensary on May 25. Located at 4237 US-130, Curaleaf Edgewater Park is now the Company’s second location to sell adult-use cannabis in the Garden State. Read more here.

Rubicon Organics Inc.

Rubicon Organics Inc. (TSXV: ROMJ) (OTCQX: ROMJF), a licensed producer focused on cultivating and selling organic certified, premium cannabis, today reported its financial results for the first quarter ended March 31, 2022. “Rubicon Organics is at a turning point in 2022, with higher yields and increased quality coming from our Delta Facility, whilst remaining cost-conscious we are driving to being profitable in 2022.” Read more here.

RIV Capital Inc., Etain LLC

RIV Capital Inc. (CSE: RIV) (OTC: CNPOF) today announced that it had received notice of an Ontario Superior Court of Justice application by JW Asset Management in connection with the Company’s process regarding its acquisition of ownership and control of Etain, LLC and Etain IP LLC, owners and operators of legally licensed cannabis cultivation and retail dispensaries in the state of New York. JWAM, an investment firm focused on the pharmaceutical and cannabis industries, is the holder of approximately 20.4% of the Company’s issued and outstanding Class A common shares. Read more here.

Pharmagreen Biotech, Inc., Long Valley Farms

Pharmagreen Biotech, Inc., (OTCQB: PHBI), which provides starter plantlets utilizing a proprietary tissue culture process, “Chibafreen,” to licensed cannabis cultivators and CBD/CBG hemp farmers, announced that it has completed another significant milestone in the business development with Long Valley Farms. Pharmagreen has advanced the next tranche of funds, whereby the use of proceeds is for the continuous application process for the LVF micro-business license and its nursery licenses in addition to the current cultivation license. PHBI anticipates having the permits in place within the following few months, depending on the regulator’s schedule. Read more here.

Avicanna Inc.

 Avicanna Inc. (TSX: AVCN) (OTCQX: AVCNF) (FSE: 0NN) a biopharmaceutical company focused on the development, manufacturing and commercialization of plant-derived cannabinoid-based products is pleased to announce that, through its majority owned Colombian subsidiary, Santa Marta Golden Hemp S.A.S., SMGH has completed its first commercial export of high concentration THC and high concentration CBD full spectrum psychoactive cannabis extracts to Portugal. Read more here.

Eden Empire Inc.

Eden Empire Inc. (CSE: EDEN) announced the signing of a non-binding letter of intent agreement with Plantvida located in Colombia. The agreement dated May 20th, 2022, is made by and between Eden Empire Inc. and Plantvida. The Plantvida SAS project located in north-western Cundinamarca, Colombia, is dedicated to implementing strategic social business, bringing safe, natural and ecologically friendly wellness products to the emerging cannabis business with the goal of providing work and social benefits to the community, such as education, unemployment, health, housing and security. Read more here.

Abaca

Arkansas-based cannabis financial technology firm Abaca has expanded coverage bringing digital-first banking, payment and treasury management solutions to Mississippi’s cannabis industry. Integral in banking 95 percent of Arkansas’s cannabis industry since day one and hundreds of cannabis clients across the country, Abaca is uniquely positioned to support Mississippi. Read more here.


Debra BorchardtMay 24, 2022
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3min2460

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.


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