MedMen Expands Its Presence in Arizona

Acquisition of Vertically-Integrated Operator Adds to MedMen's Growing Footprint in One of the Top Medical Marijuana Markets in the U.S.

MedMen Enterprises Inc. ("MedMen" or the "Company") MMEN MMNFF (FSE: A2JM6N) announced today that it has signed a definitive agreement (the "Agreement") to acquire control of Kannaboost Technology Inc. and CSI Solutions LLC, collectively referred to as "Level Up," in a cash and stock transaction valued at $33,000,000. Level Up holds licenses for two vertically-integrated operations in Arizona, which include retail locations in Scottsdale and Tempe, as well as 25,000 square feet of cultivation and production capacity in Tempe and Phoenix. As part of the transaction, the Company will also receive a 40 percent stake in top-selling brand K.I.N.D. Concentrates ("K.I.N.D."), which is currently distributed in over 90 percent of the dispensaries in Arizona.

"This acquisition strengthens our presence in one of the top cannabis markets in the U.S.," said Adam Bierman, MedMen chief executive and co-founder. "We will continue to identify highly accretive transactions in core states and remain laser focused on executing our retail playbook."

Inclusive of Level Up and other pending acquisitions, MedMen's footprint includes licenses for 69 retail stores and 17 cultivation and production facilities across 12 states.

In Arizona, the Company now controls three premier retail locations, 65,000 square feet in total cultivation and production capacity, and distribution and co-manufacturing rights for several top brands in Arizona, including K.I.N.D., Kiva, Mirth Provisions, HUXTON and Old Pal. The Company also has plans to introduce its [statemade] line of branded products to the Arizona market over the next 12 to 18 months.

"We have worked tremendously hard to build a company that puts the needs of patients in our local communities first," said Michael Colburn, co-founder of Level Up. "This marks an exciting new chapter for our brands and for the medical marijuana patients who have supported us," added Daryll DeSantis, Level Up co-founder.

Founded in 2013, Level Up is among the top medical marijuana operators in Arizona. The flagship location in Scottsdale is one of the highest-grossing dispensaries in the state, and will be MedMen's second dispensary in the city, pending the acquisition of Monarch, which was announced in September 2018. Level Up's second location recently opened in Tempe.

Transaction Details

As consideration for the transaction, the Company will pay $33.0 million, of which approximately 51.5 percent will be satisfied in cash and 48.5 percent in Class B Subordinate Voting shares (the "Shares"). Level Up is currently on track to surpass $22 million in revenue for calendar year 2018, a 62 percent increase over 2017 revenue. Total revenue includes both retail and wholesale revenue.

For the recently announced acquisitions of operational businesses, which include Monarch in Arizona, Buddy's Cannabis in California, and Seven Point in Illinois, the Company has deployed $78.8 million in total cash and shares at a blended purchase multiple of 1.8x current year revenue.

The transaction is subject to regulatory approvals by various local and state authorities in each of the markets where Level Up's assets and licenses are held and other customary closing conditions. The Company expects the transaction to close within 90 days.

ABOUT MEDMEN:

MedMen Enterprises is a leading cannabis company in the U.S. with assets and operations across the country. Based in Los Angeles, MedMen brings expertise and capital to the cannabis industry and is one of the nation's largest financial supporters of progressive marijuana laws. Visit http://www.medmen.com

ABOUT LEVEL UP:

Level Up provides the cannabis connoisseur with a luxury experience and premium medicine. Level Up is passionate about bringing the finest medical marijuana in a comfortable setting that reflects our dedication to premium quality. The company prides itself on providing the utmost customer service to create an experience rooted in elegance and class. As part of that mission, Level Up's promise is this: Patients Always. The needs of its patients always dictate its decisions, not profit. Visit http://www.levelupdispensaries.com

ABOUT K.I.N.D. CONCENTRATES:

K.I.N.D. Concentrates manufactures and distributes top quality, award-winning THC and CBD medical marijuana concentrates made from organic, indoor medical cannabis plants. Founded in 2013, K.I.N.D.'s purpose is to be a reliable, high quality provider of the best medical marijuana concentrates and edibles in the state of Arizona. As the first producer of medical marijuana concentrates in Arizona, K.I.N.D. Concentrates' focus has always been on providing medicine of the highest quality and potency to medical marijuana patients in Arizona. Visit http://www.kindconcentrates.com

Cautionary Note Regarding Forward-Looking Information and Statements

This press release contains certain "forward-looking information" within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only MedMen's beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of MedMen's control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or may contain statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "will continue", "will occur" or "will be achieved". The forward-looking information and forward-looking statements contained herein may include, but are not limited to, information concerning the proposed acquisition, expectations regarding whether the proposed acquisition will be consummated, including whether conditions to the consummation of the proposed acquisition will be satisfied and whether the proposed acquisition will be completed on the current terms, the timing for completing the proposed acquisition, expectations for the effects of the proposed acquisition or the ability of the Company to successfully achieve business objectives, expectations regarding the Arizona cannabis market and expectations for other economic, business, and/or competitive factors.

By identifying such information and statements in this manner, MedMen is alerting the reader that such information and statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of MedMen to be materially different from those expressed or implied by such information and statements. In addition, in connection with the forward-looking information and forward-looking statements contained in this press release, MedMen has made certain assumptions. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking information and statements are the following: the ability to consummate the proposed acquisition; the ability to obtain requisite regulatory approvals and third party consents and the satisfaction of other conditions to the consummation of the proposed acquisition on the proposed terms and schedule; the potential impact of the announcement or consummation of the proposed acquisition on relationships, including with regulatory bodies, employees, suppliers, customers and competitors; changes in general economic, business and political conditions, including changes in the financial markets; changes in applicable laws; compliance with extensive government regulation; and the diversion of management time on the proposed acquisition. Should one or more of these risks, uncertainties or other factors materialize, or should assumptions underlying the forward-looking information or statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected.

Although MedMen believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements. The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and MedMen does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws. All subsequent written and oral forward-looking information and statements attributable to MedMen or persons acting on its behalf is expressly qualified in its entirety by this notice.

SOURCE: MedMen Enterprises

View source version on businesswire.com: https://www.businesswire.com/news/home/20181101005426/en/