Almost a year after announcing its plans to invest $73 million in MedMen Enterprises Inc.‘s (CSE:MMEN) (OTCQX:MMNFF) subsidiary in New York, the vertically integrated cannabis Ascend Wellness Holdings, Inc. (CSE:AAWH) (OTCQX:AAWH) received the final New York state approval.
The company announced Thursday that it has gotten the green light from the New York Cannabis Control Board (CCB) and the Office of Cannabis Management of the CCB to move forward with the transaction.
AWH Founder Abner Kurtin said earlier this year that “the proposed transaction will bring fresh capital and a new perspective to New York’s medical marijuana program and its patients.”
Deal Details
Under the investment agreement, MedMen NY agreed to undertake around $73 million of MedMen’s current secured debt, while Ascend Wellness will make a $35 million cash investment in MedMen’s subsidiary.
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.
Furthermore, the New York-based company will obtain a controlling interest in MedMen NY of some 86.7% equity and would also be given an option to buy the rest of the interest.
Pursuant to the original terms of the agreement, 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, to compensate for the extra equity in MedMen’s subsidiary.
In August, Ascend raised some $210 million through a senior secured term loan with Seaport Global Securities LLC as lead manager to finance its investment in MedMen NY, Inc.
More recent news from Ascend Wellness:
- Ascend Wellness Buys Ohio Cannabis Company, Its 2nd Dispensary In The Buckeye State
- Cannabis Earnings: Ascend Wellness Q3 Revenue Increases 13% Sequentially to $94 Million
- Ascend Wellness Holdings Cannabis Commences Trading On OTCQX In The US
AAWH Price Action
Ascend Wellness’ shares traded 5.72% higher at $6.47 per share at the time of writing on Thursday.
Photo: Courtesy of Precondo CA on Unsplash
