MedMen Enterprises Inc., a large multi-state cannabis company, recently made headlines with their decision to sell “its non-core business operations in Arizona and certain assets in Nevada to an affiliate of Mint Cannabis.”
This move comes as a strategic choice by the company to restructure and strengthen its financial position, MedMen claims in a press release. As MedMen faces challenges in the current market, this decision has not only captured the attention of investors but also sparked discussions within the cannabis industry.
Mint Cannabis is a privately held multi-state cannabis operator, based in Arizona. In the MedMen press release, it states that “the transactions consist of the sale of MedMen’s wholly-owned operating subsidiary in Arizona and its two operating dispensaries located in Clark County, Nevada.:
“These sales are the result of MedMen’s previously announced strategic review and evaluation of divestiture opportunities of its non-core assets. The transactions are subject to customary closing conditions, including, among others, the receipt of applicable regulatory approvals.”
According to the company, these transactions will “bolster liquidity in the short term,” and allow MedMen to focus on their core markets and long-term growth strategy. This move is seen as a strategic step towards improving the financial health of the company.
With the exit of Arizona and Nevada, MedMen currently now is only in four states, California, Illinois, Massachusetts, and New York.
MedMen also notified stock regulators last month that it would be late in filing its third quarter financial reports for the three months that ended Sept. 30, but said it would have the filing in by Dec. 13. But the quarterly report has yet to appear on SEDAR, the Canadian database for all companies that trade on the Canadian Securities Exchange.
The company was issued a management cease trade order by the British Columbia Securities Commission on Nov. 1 as part of the filing delay.
The last time the company reported quarterly earnings was in May, when it released its third quarter fiscal 2023 results for the three months that ended March 25. At that point, MedMen had a working capital deficit of $383 million and just $7.6 million cash on hand as reported by Green Market Report.
MedMen CEO Ellen Deutsch Harrison expressed optimism regarding the company’s strategic review and restructuring efforts, stating that “MedMen is pleased with the outcome of our strategic review and has made good progress in our restructuring efforts. These transactions will bolster liquidity in the short term, reduce liabilities, and enable the Company to focus on operating efficiencies and executing our long-term asset-light growth strategy in our core markets,” said in the press release.
Eivan Shahara, co-founder and CEO of Mint Cannabis, also commented on the transactions, stating that “We are excited to expand our portfolio of flagship dispensaries through the acquisition of MedMen’s Scottsdale Talking Stick Dispensary and Mesa Cultivation Facility, along with establishing our vertical presence in Nevada through the addition of two premium Las Vegas Dispensaries. MINT Cannabis is pleased to have reached an agreement with MedMen and has strong ambitions to continue to build our footprint through both organic and strategic growth across various key markets in the US.”
This decision by MedMen to sell assets in Arizona and Nevada is not a positive sign for the company, as it reflects their current struggles and challenges in the marijuana market. With ongoing financial issues and reporting delays, this move may be seen as a desperate attempt to restructure and improve their liquidity.
The drama surrounding MedMen and its leadership over the years has also caused skepticism and doubts among investors. It remains to be seen whether this strategic decision will have a positive impact on the company’s future or further contribute to their downfall. As the cannabis industry continues to evolve, only time will tell if MedMen can overcome these obstacles and emerge as a strong player in the market once again.
Featured Image Courtesy of Ron Gilbert Flickr
Keep updated on all the latest news and updates in the Cannabis industry here at Beard Bros Pharms by signing up for our Friday Sesh Newsletter here. Always Dank and Never Spam!
