MedMen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF) has agreed to sell its assets in Nevada and Arizona to the private distributor Mint Cannabis for an unspecified amount.
The company announced the move Wednesday following a so-called strategic review and ensuing cost optimization plan. The sale will consist of two Las Vegas dispensaries and MedMen’s Arizona subsidiary. The cannabis operator no longer considers the stores and state branch to be essential to its business.
“These transactions will bolster liquidity in the short term, reduce liabilities, and enable the company to focus on operating efficiencies and executing our long-term asset-light growth strategy in our core markets,” Ellen Deutsch Harrison, MedMen’s CEO, said.
Following the divestiture, MedMen will focus on its operations in California, Illinois, Massachusetts and New York. Mint currently owns Arizona’s largest dispensary, which started operating 24 hours a day, 365 days a year in October. In 2020, Mint opened one of the first full-service cannabis-infused kitchens in the United States.
“We are excited to expand our portfolio of flagship dispensaries through the acquisition of MedMen’s Scottsdale Talking Stick dispensary and Mesa cultivation facility, along with establishing our vertical presence in Nevada,” Eivan Shahara, CEO and Co-Founder of Mint, said.
Cannabis-infused desserts served at Mint’s cafe in early 2021. Photo via Mint Cannabis
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Financial optimization efforts will doubtfully succeed
In February, MedMen warned shareholders that it was running out of funds to stay afloat. The company said that month in a financial filing that it had defaulted on certain debt payments and was considering refinancing or extensions.
“The conditions described above raise substantial doubt with respect to the company’s ability to meet its obligations for at least one year, and therefore, continue as a going concern,” said MedMen in the report. The filing detailed that MedMen had US$15.6 million in cash and US$137.4 million in debt.
The company has had a troubled history, which inspired Politico writers to craft a lengthy feature about it in 2020.
“In the wake of its fall, the firm has left behind a trail of unpaid bills and unsettled legal allegations,” Politico’s Ben Schreckinger and Mona Zhang, wrote.
The failing chain, formerly worth approximately US$1.7 billion in the early days of legalization, now trades its shares for C$0.02 on the Canadian Securities Exchange.
rowan@mugglehead.com
