MedMen Announces $100M Equity Investment On Heels Of Tilray Buying Its Convertible Debt, Deal Led By Serruya Private Equity

Cannabis retailer MedMen Enterprises Inc. MMEN MMNFF has secured $100 million in financing through a private placement of its units.

Investors, led by Serruya Private Equity, agreed to purchase $100 million of the Los Angeles-based company's units at a purchase price of $0.24 per unit.

Under the transaction, each unit issued to certain investors consists of one Class B subordinate voting share and one quarter share purchase warrant enabling the holder to purchase MedMen's shares for a period of five years from the date of issuance at $0.288 per share.

In addition, each unit issued to certain SPE purchasers includes one share and one-quarter of one warrant plus a proportionate interest in a short-term warrant, which will expire on December 31, 2021.

The short-term warrant, allows holders to acquire, on payment of $30 million, at the option of the holders, units at $0.24 per unit, or $30 million principal amount of notes at par, convertible into shares at a conversion price of $0.24 per share.

The company plans to utilize proceeds from the private placement to boost its operations in California, Florida, Illinois and Massachusetts as well as to bolster its nationwide growth.

“This US$100 million investment is a game-changer for our company, strengthening our balance sheet and creating a platform for our future growth.” Tom Lynch, CEO of MedMen, disclosed Tuesday. “This transaction gives us the flexibility and firepower to match our revenue trajectory to our operational expertise and internationally renowned brand.”

MedMen also announced the appointment of Michael Serruya to its board of directors as its seventh member as part of the private placement transaction.

Tilray Acquires Majority Position In Amended MedMen Convertible Notes

Simultaneously, the company disclosed that Tilray, Inc. TLRY acquired the majority of MedMen’s outstanding senior secured convertible notes that were originally held by certain funds affiliated with Gotham Green Partners LLC (GGP) and others.

The Canadian Cannabis giant plans to leverage the investment to accelerate the path into the U.S. cannabis market once federal legalization comes into play.

Price Action

MedMen’s shares traded 1.49% higher at $0.2664 per share after market close Tuesday.

Photo: Courtesy of MedMen Enterprises Inc.

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