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MedMen's New York Subsidiary Gets $73M From Ascend Wellness To Repay Debt

February 26, 2021 12:05 pm
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MedMen's New York Subsidiary Gets $73M From Ascend Wellness To Repay Debt

MedMen Enterprises Inc. (CSE:MMEN) (OTCQX:MMNFF) confirmed Friday its subsidiary in New York will obtain a $73 million investment from Ascend Wellness Holdings LLC, a multi-state cannabis operator.

“We believe the proposed transaction will bring fresh capital and a new perspective to New York’s medical marijuana program and its patients,” AWH Founder Abner Kurtin stated.

Deal Details

In relation to the investment, Ascend Wellness will direct MedMen NY Inc.'s activities pending regulatory authorization of the transaction.

Under the investment agreement, MedMen NY will undertake around $73 million of MedMen’s current secured debt, and Ascend Wellness will make a $35 million cash investment in MedMen NY.

Furthermore, Ascend Wellness New York will issue a senior secured promissory note in favor of MedMen NY’s senior secured lender in the amount of $28 million, secured by Ascend Wellness.

Ascend Wellness will obtain a controlling interest in MedMen NY of around 86.7% of the equity in MedMen NY, and would also be given an option to buy the rest of the interest.

To compensate for the extra equity in MedMen NY, Ascend Wellness must invest an extra $10 million, which should also be used to repay MedMen NY’s senior secured lender once recreational cannabis sales start in its dispensaries.