MedMen Announces US$250 Million Investment From Gotham Green Partners
MedMen Enterprises Inc. (CSE:MMEN) (OTCQX:MMNFF) (FSE: A2JM6N) (“MedMen” or the “Company”), is pleased to
announce that it has signed a binding term sheet for a senior secured convertible credit facility of up to US$250,000,000 (the
“Facility”) from funds managed by Gotham Green Partners (“GGP” or the “Investor”), an investor in the global
cannabis industry. Management believes this is the largest investment to date by a single investor in a publicly traded cannabis
company with U.S. operations.
“This strategic partnership with Gotham Green Partners represents another key milestone for MedMen and stems from our
long-standing relationship with The Cronos Group and GGP’s brand portfolio,” said Adam Bierman, CEO of MedMen. “The growth capital
will be used to operationalize the balance of our footprint and we look forward to creating further alignment with GGP and their
global cannabis platform.”
“We continue to be impressed with MedMen’s industry leading retail execution and iconic branding. With MedMen’s fortified
balance sheet, the Company’s future has never been brighter,” said Jason Adler, managing member of GGP. “We feel fortunate to have
the opportunity to take such a significant stake in MedMen and begin to work actively with the management team and the board to
help the Company achieve its goals.”
The Company intends to use the net proceeds from drawdowns on the Facility to fund the future capital needs of the business. In
addition to funding general working capital, the growth capital will primarily be used to:
- Operationalize existing retail licenses, with a focus on Florida, where the Company is licensed for
30 stores
- Integrate assets acquired through pending transactions, including those related to PharmaCann,
LLC
- Accelerate geographic expansion through bolt-on acquisitions and investments in core markets
- Support national roll-out of higher-margin in-house branded products
- Continue to invest in technology and digital infrastructure, with a focus on delivery and loyalty
programs
- Consolidate the supply chain and enhance margins by ramping up cultivation and production
capabilities
The investment from GGP will be in the form of convertible senior secured notes issued by MM CAN USA, Inc., a subsidiary of the
Company, totaling up to US$250,000,000 (“Notes”) on a private placement basis pursuant to applicable securities laws
exemptions. The Notes will be issuable in three tranches, with each of the second and third tranches being issuable at the option
of the Company, subject to certain conditions and share price thresholds being achieved by MedMen. The initial tranche will be in
the amount of US$100,000,000 (“Tranche I”). The additional US$150,000,000 would be funded in two US$75,000,000 tranches. The
second tranche (“Tranche II”) would be available to the Company beginning on the six-month anniversary of the closing date,
and the third tranche (“Tranche III”) would be available to the Company beginning on the six-month anniversary of the
funding date of Tranche II.
All Notes will have a maturity date of 36 months from the closing date (“Maturity Date”), with a 12-month extension
feature available to the Company on certain conditions, including payment of an extension fee. Notes will bear interest from their
date of issue at LIBOR + 6.0% per annum. During the first 12 months, interest may be paid-in-kind (“PIK”) at the Company’s
option such that any amount of PIK interest will be added to the outstanding principal of the Notes. The Company shall have the
right after the first year, to prepay the outstanding principal amount of the Notes prior to maturity, in whole or in part, upon
payment of 105% of the principal amount in the second year and 103% of the principal amount thereafter.
All or a portion of the Notes (including all accrued interest thereon) will be convertible, at the option of the holder, into
class B subordinate voting shares of the Company (the “Subordinate Voting Shares”) at any time prior to the close of
business on the last business day immediately preceding the Maturity Date. The conversion price of each tranche of Notes is as
follows:
i) for Tranche I Notes, the conversion price will be equal to 115% of the lesser of (the “Tranche I
Reference Price”) (a) US$3.10, which represents the closing price of the Subordinate Voting Shares on the Canadian Securities
Exchange (the “CSE”) on the trading day immediately preceding the announcement of the Facility (translated to US dollars),
and (b) the closing price of the Subordinate Voting Shares on the trading day immediately preceding the closing date; and
ii) for Tranche II and Tranche III Notes, the conversion price will be equal to the lesser of (a) 115% of the
20 trading day volume weighted average trading price of the Subordinate Voting Shares as of the trading day immediately preceding
the date of issue of such tranche, and (b) US$7.00.
The Company may force the conversion of up to 75% of the then outstanding Notes at the applicable conversion price(s) if the
volume weighted average trading price of the Subordinate Voting Shares (translated to US dollars) is US$8.00 for any 20 consecutive
trading day period. If 75% of the then outstanding Notes are converted by the Company, the term of the remaining 25% of the then
outstanding Notes will be extended by 12 months.
Upon drawdown of Tranche I, the lenders would be issued share purchase warrants (“Warrants”), each of which would be
exercisable to purchase one Subordinate Voting Share. The number of Warrants to be issued will represent an approximate 50% Warrant
coverage on the Tranche 1 Notes, certain of which Warrants will have an exercise price per Subordinate Voting Share that will be
equal to a 30% premium to the Tranche I Reference Price, and another group of which Warrants will have an exercise price per
Subordinate Voting Share that will be equal to a 50% premium to the Tranche I Reference Price. The Warrant coverage on the Tranche
II and Tranche III Notes will be similar to those for the Tranche I Notes. The exercise prices for the Warrants on the Tranche II
and Tranche III Notes will be equal to the lesser of (a) a 30% or 50% (as the case may be) premium to the 20 trading day volume
weighted average trading price of the Subordinate Voting Shares as of the trading day immediately preceding the date of the
drawdowns of such tranches, and (b) US$7.91 or US$9.13 (as the case may be).
The Warrants and any Subordinate Voting Shares issuable upon conversion of the Notes or exercise of the Warrants, will be
subject to a four month hold period from the date of issuance of the Notes or such Warrants, as applicable, in accordance with
applicable Canadian securities laws.
The terms of the Facility described in this press release are those set out in a binding term sheet. However, completion of any
tranche is subject to further agreements being entered into by the parties, including as to the guarantees and/or the collateral to
be provided by MedMen and its applicable subsidiaries to secure its obligations under the Facility. The terms of the Facility, the
Notes and the Warrants and the conditions to drawdowns are subject to change as the parties negotiate such definitive
documentation. The closing of any tranches will be subject to certain conditions being satisfied including, but not limited to, the
receipt of all necessary approvals and the absence of material adverse changes. The parties are currently anticipating a closing in
April. There can be no assurance that the parties will enter into definitive documentation such that the Facility will be
available, or if definitive documentation is entered into, that the terms of the Facility, the Notes and the Warrants and the
conditions to receiving the proceeds of any of the tranches will be as stated above.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of
the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities being offered have
not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold
in the United States absent registration or an applicable exemption from the registration requirements of the United States
Securities Act of 1933, as amended, and applicable state securities laws.
ABOUT MEDMEN:
MedMen is a cannabis retailer with operations across the U.S. and flagship stores in Los Angeles, Las Vegas and New York. MedMen’s
mission is to provide an unparalleled experience that invites the world to discover the remarkable benefits of cannabis because a
world where cannabis is legal and regulated is a safer, healthier and happier world. Learn more at
www.medmen.com
ABOUT GOTHAM GREEN PARTNERS:
Gotham Green Partners, LLC is a New York and California-based private equity firm focused on deploying capital into cannabis and
cannabis-related enterprises on a global scale. The firm manages a diversified portfolio of investments and is actively investing
across the cannabis value chain.
SOURCE: MedMen Enterprises
Cautionary Note Regarding Forward-Looking Information and Statements:
This press release contains certain “forward-looking information” within the meaning of applicable Canadian securities
legislation and may also contain statements that may constitute “forward-looking statements” within the meaning of the safe harbor
provisions of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking information and
forward-looking statements are not representative of historical facts or information or current condition, but instead represent
only MedMen’s beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and
outside of MedMen’s control. Generally, such forward-looking information or forward-looking statements can be identified by the use
of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”,
“forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or may
contain statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “will continue”,
“will occur” or “will be achieved”. The forward-looking information and forward-looking statements contained herein may include,
but is not limited to, expectations that definitive documentation for the Facility will be entered into, information concerning the
terms of the proposed Facility, Notes and Warrants, timing for completion of Tranche 1 of the Facility, the use of proceeds of the
Facility and the impact of such use of proceeds of the Facility on the business, assets, liabilities, financial condition,
performance and prospects of MedMen.
By identifying such information and statements in this manner, MedMen is alerting the reader that such information and
statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of
activity, performance or achievements of MedMen to be materially different from those expressed or implied by such information and
statements. In addition, in connection with the forward-looking information and forward-looking statements contained in this press
release, MedMen has made certain assumptions. Although MedMen believes that the assumptions used in preparing, and the expectations
contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such
information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will
prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and
statements. Key assumptions used herein are that the parties will negotiate mutually acceptable definitive documentation, that the
Facility will be entered into, that the current terms and anticipated timing will not change and that MedMen will be able to
satisfy the conditions to drawdown on Tranche II and Tranche III of the Facility. The forward-looking information and
forward-looking statements contained in this press release are made as of the date of this press release, and MedMen does not
undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein,
except in accordance with applicable securities laws. All subsequent written and oral forward-looking information and statements
attributable to MedMen or persons acting on its behalf is expressly qualified in its entirety by this notice.
No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained
herein.
OFFICER:
Adam Bierman, 855-292-8399
Chief Executive Officer
info@medmen.com
MEDIA CONTACT:
Briana Chester
Director of Public Relations
Email: briana.chester@medmen.com
(424) 888-4260
INVESTOR RELATIONS CONTACT:
Stéphanie Van Hassel
VP of Investor Relations
Email: investors@medmen.com
(323) 705-3025
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