MedMen raises $16 million to broaden business operations across the State of Florida

Bethan Rose Jenkins, Cannabis News Writer/Editorial

MedMen Enterprises, which has garnered attention in recent times for being a financially restrained company, has revealed that it will expand operations across Florida. Impressively, the cannabis company has successfully raised CAD $20 million (USD$16 million) at CAD 40 cents per unit to fund its plans.

Headquartered in California, the multi-state operator (MSO) has disclosed to reporters that the private placement comprises one Class B subordinate voting share and one share purchase warrant for each unit. Holders will also have the chance to purchase extra shares for three years following the issuance date at CAD 50 cents per share.

Florida is “a core market where the company has identified significant potential opportunities,” reads a news release published by the company, which boasts 16 top-tier leased dispensary locations. Included in that amount are 10 well-equipped retail departments and four fully operational dispensaries.

The company is also in ownership of “underutilized production facilities.” Those facilities are capable of churning out a healthy 8,000 pounds of cannabis on an annual basis.

“This past year we have made tremendous progress on our turnaround plan with our cost cutting initiatives, gross margin expansion and focusing investments on our highest ROI opportunities,” said the Chairman and Chief Executive Officer (CEO) of MedMen, Tom Lynch. “MedMen’s future has never been brighter. We believe we have the most recognizable brand in cannabis, an actionable strategic growth plan and a disciplined management team that knows how to execute this turnaround.”

What will MedMen use the private placement funding for?

Following years of struggles with finances and negligent members of the team, MedMen seems to be regaining its bold identity. The well-known cannabis MSO intends on using its private placement funding to broaden and enhance the use of production facilities that already exist. Ideally, annual cultivation capacity will be ramped up to 22,000 pounds from 8,000 pounds.

In addition to this, MedMen will increase its manufacturing output to serve the ever-growing consumer demographic. Conversely, the increased manufacturing capacity will enable the company to seamlessly introduce Mary’s Medicinals products and Dixie Brands edibles.

Within the space of the next year, medical cannabis patients in Florida will be served by 15 of MedMen’s operational stores; an outlook that is contingent on the increased capacity being finalized. Proceeds from the cannabis MSO’s multi-million dollar funding round will also be used to support the launch of dispensaries across California, Illinois and Massachusetts, not to mention for general corporate purposes.

MedMen has lowered its stake in assets across other areas

Back in February, Massachusetts-headquartered Ascend Wellness Holdings (AWH) announced that it would be acquiring an 86.7 percent interest in MedMen’s cannabis operation in New York for $63 million. 

Also a multistate operator, AWH now has the opportunity to purchase the outstanding equity in MedMen’s New York facility for $10 million. However, it should be noted that this deal is dependent on the state rolling out a legal adult-use market.

Based on Florida’s cannabis regulations, only retailers who have produced their products in-house are eligible to sell products. With that being said, MedMen’s cannabis retail sales in Florida have been largely stunted by production capacity.

MedMen can be found trading on the Canadian Securities Exchange under the ticker “MMEN” and on the U.S. over-the-counter markets under the ticker “MMNFF”.