MedMen Enterprises and PharmaCann announce more details on buyout

MedMen Enterprises Inc (CSE: MMEN) (OTCQB: MMNFF) and Chicago-based PharmaCann LLC provided additional details on the acquisition of all of PharmaCann’s outstanding equity interests.

Under the terms of the agreement, PharmaCann units will be exchanged for equity interests which will include the right to receive the Company’s Class B Subordinate Voting Shares and which on a pro-forma basis will equal 25% of the then fully-diluted outstanding shares of the company upon the closing of the transaction.

The total transaction was valued at $682 million based on the closing price of the Company’s Class B Subordinate Voting Shares on October 9, 2018. The shares are expected to be subject to lock-up agreements for a period of between 6-12 months.

The transaction is subject to regulatory approvals by various local and state authorities in each of the US states where PharmaCann’s assets and licenses are held.

Shares of MedMen in Canada closed 9.41% higher on MOnday at C$8.14. In New York, they rose 9.59% to settle at US$6.26.

READ: MedMen Enterprises signs deal for cannabis dispensary in California

The closing is expected to take 6-12 months based on the receipt of the approvals. In the event that certain approvals are not obtained by the closing, a portion of the share consideration, as determined by the parties will be held in escrow until the approvals are received, and the escrowed shares shall be released to PharmaCann unitholders upon the receipt of such approvals.

In the event that an approval is not obtained within 24 months following the execution of definitive documentation, the parties will use commercially reasonable efforts to transition such license to a third party with the proceeds going to the company and any related escrowed shares released to PharmaCann unitholders.

MedMen Enterprises is a leading cannabis company in the US with assets and operations across the country.

Reporting by Rene Pastor, contactable on [email protected]

Story by ProactiveInvestors