A multi-million-dollar merger that was announced nearly one year ago has been terminated between cannabis industry giants MedMen Enterprises Inc. and PharmaCann. Los Angeles, California-based MedMen made the announcement on Oct. 8, also announcing important management changes. The company shared that it will focus on expanding its cannabis retail focus across the nation. When the deal was initially announced last October, the all-stock deal held a massive value of $682 million.
In addition to cancelling the deal, MedMen moved to fire its chief financial officer, Michael Kramer. Kramer was replaced with MedMen’s chief corporate development officer, Zeeshan Hyder. This management change went into effect immediately. Kramer has inked a consulting deal with MedMen through the remainder of the calendar year.
Looking forward, MedMen will deepen its retail operations in California, Illinois, Nevada, Florida, New York and Massachusetts. As part of the deal’s termination, PharmaCann will be transferring cannabis-related licenses and certain assets in Illinois and Virginia to MedMen in exchange for debt forgiveness. Adam Bierman, MedMen’s co-founder and CEO, further explained the termination of the merger in a press release.
“The cannabis sector has evolved tremendously since we first announced the PharmaCann transaction and based on the current macro-environment and future opportunities that exist for our business, we believe it is now in the best interest of our shareholders to deepen, rather than widen, our Company’s reach,” said Bierman. “Looking at the PharmaCann portfolio today, Illinois has emerged as the most attractive opportunity for our longer-term, strategic growth plan. The addition of those assets, without dilution, is a win for MedMen and our shareholders.”
Significant changes in the cannabis industry were to blame for the termination of this agreement. For example, the cannabis industries in both the United States and Canada have underperformed in comparison to their projections. Also, MedMen has been increasing its focus on the California market over the last six months. Finally, closing the deal was impacted by regulatory hurdles on both the federal and state levels, among other considerations.