Cannabis MSO Ascend Wellness is at legal loggerheads with MedMen over terminated New York deal

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Bethan Rose Jenkins, Cannabis News Writer/Editorial

On Friday, January 14, cannabis multistate operator (MSO) Ascend Wellness Holdings (AWH) said that it had initiated a lawsuit prompting MedMen Enterprises to finalize a majority sale pertaining to a New York cannabis operation.

Filed in the commercial division of the Supreme Court of the State of New York, the lawsuit aims to impose a preliminary injunction and temporary restraining order safeguarding the New York asset from any wrong moves on MedMen’s behalf. 

MSO Ascend claims that Los Angeles-based MedMen overstepped the law after it “materially breached” a deal that was agreed to in February 2021. That particular deal focused on the sale of a 86.7 percent interest in MedMen’s New York facility for no less than $63 million.

The court case emerges after Ascend filed a letter with the U.S. Securities and Exchange Commission. The cannabis company also publicly disclosed two news releases on the subject in early January.

MedMen hasn’t explained why it is backing off from the agreement with Ascend

According to MedMen’s regulatory filings, it alerted Ascend of the investment deal’s termination on January 2. Based on a regulatory filing that followed on January 10, MedMen confirmed that it would be compensating Ascend with a $4 million deposit and a “working capital advance” to keep the peace.

The state, which legalized recreational cannabis in March of last year, is gearing up to launch an industry that analysts believe could be worth billions of dollars in the near future. MedMen and Ascend’s agreement was inked one month prior to the measure’s passing.

Back then, MedMen was enduring a financial predicament. The company has since gone on to employ it’s third CEO within a two-year period Ascend officials wonder whether or not this may have influenced the company’s decision to back out of the New York deal.

About MedMen and Ascend Wellness Holdings

A publicly-traded, United States-headquartered cannabis company with facilities spread across Arizona, California, Florida, Illinois, Massachusetts, New York and Nevada, MedMen Enterprises (A.K.A. ‘MedMen’) owns/operates a total of six cannabis grow facilities and 29 retail stores.

At the current time, MedMen possesses the necessary licensing to broaden its existing presence to 65 retail locations. The company is also the proud owner of one of New York’s 10 retail licenses. 

Not everything is bright and rosy  for the company however, with MedMen having faced numerous lawsuits, one of which was initiated by former CFO James Parker.

AWH, on the other hand, is a vertically integrated cannabis company with operations in Illinois, Massachusetts, Michigan, New Jersey and Ohio. It serves a variety of medical and adult-use markets from five different states.