MedMen To Raise Over $90M Through Unit Sale
MedMen Enterprises Inc. (OTC:MMNFF), one of the largest marijuana dispensary operators in the United States, plans to raise CAD 120 million ($91 million) after it entered into a letter of engagement with financial services company Canaccord Genuity.
In a press release, MedMen Enterprises said Cannacord will buy on behalf of a group of underwriters a total of 17.65 million units at CAD 6.80 ($5.15) apiece. In addition, the underwritters to the offering have the over-allotment option that includes up to 2.65 million units.
Each unit includes one Class B subordinate voting share and one-half of a warrant to buy a class B share at CAD 10.00 ($7.60) for a period of 36 months after the offering is closed. With the exercise of the over-allotment option, the total amount raised by MedMen could reach CAD 138 million ($104 million).
Why It's Important
MedMen Enterprises said it plans to use the proceeds from the sale of units on working capital and general corporate purposes. The announcement about the unit offering comes a month after the cannabis company agreed to buy PharmaCann for $682 million. The deal is one of the largest in the cannabis industry and will substantially expand MedMen's operations.
MedMen Enterprises has operations in New York, California and Nevada. Given the last positive developments in the cannabis industry, such as Michigan legalizing recreational marijuana, and Utah and Missouri voting for medical marijuana legalization, companies have many opportunities to grow their footprint.
Medmen's OTC stock was trading around $4.99 per share at time of publication, down 10 percent on the day.
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