One of the biggest names associated with the cannabis retail movement is about to get bigger. MedMen Enterprises (CSE:MMEN, Forum) is expanding its footprint in the United States with the purchase of cannabis operations in Arizona and Illinois.
The Company made two major announcements this week; The first, a definitive agreement with WhiteStar Solutions LLC to acquire control of Monarch, a licensed medical cannabis license holder based out of Scottsdale, Arizona that has dispensary, cultivation and processing operations.
Arizona is something of a “crown jewel” for MedMen to build its national chain. With more than 172,000 patients, the state boasts one of the largest medical marijuana markets in the U.S. and is expected to bring the issue to legalize cannabis to ballot in 2020 (legalization was narrowly rejected in 2016 by 51% / 48%). Monarch was the first cannabis dispensary to open its doors in Scottsdale in 2013 and has been generating robust revenues of more than $10 million (USD).
MedMen chief executive and co-founder Adam Bierman stated that this expanse is based upon the Company having already established its brand, operating dispensaries in three primary markets: California, Nevada and New York.
“We have a leading presence in those primary markets and we are now ready to expand our reach. Arizona, with its robust medical marijuana program and connectivity to California and Nevada where our brand is already strong, makes this a great fit.”
The other news on MedMen’s expanse this week is its entrance into the “Windy City” suburb of Oak Park. MMEN signed a definitive agreement to acquire Seven Point , a licensed medical cannabis dispensary, located in a popular shopping district surrounded by major retailers and restaurants.
Like Arizona, Illinois is one of the fastest growing medical marijuana markets in the country. Since the beginning of the year, the number of qualifying patients grew 41% to more than 42,000 while retail sales of cannabis grew 35%.
This acquisition comes at an ideal time. In August 2018 , state Gov. Bruce Rauner signed Senate Bill 336, a law allowing patients to qualify for medical marijuana if they already qualify for an opioid painkiller prescription. The intent is to reduce the state’s overdose crisis that caused the death of thousands. According to the Illinois Department of Public Health , roughly 2.3 million patients in the state received around 5 million opioid painkiller prescriptions in 2017. While it is a medical-only state right now, CEO Bierman told the Chicago Tribute in an interview that he believes Illinois will transition to adult use in the near future.
These acquisitions were made possible in part by senior secured term loan of $100 million (CDN) managed by Hankey Capital, as well as a recent bought deal of $86 million (CDN) led by Eight Capital and Cormark Securities Inc. , as co-lead underwriters. Both of these loans reflect how investable the cannabis industry has become and the faith that MedMen has fostered as it turns its attention to promising markets across the United States.
medmen.com
FULL DISCLOSURE: MedMen Enterprises is a paid client of Stockhouse Publishing.