Financially strapped MedMen Enterprises said it raised 20 million Canadian dollars ($16 million) at CA40 cents a unit to fund growth plans in Florida’s medical marijuana market.
The California-based multistate operator said that under the private placement, each unit consists of one Class B subordinate voting share and one share purchase warrant that gives holders the option to buy an additional share for three years from the date of issuance at an exercise price of CA50 cents per share.
In a news release, MedMen said Florida is “a core market where the company has identified significant potential opportunities.”
MedMen’s Florida holdings include 16 prime leased dispensary locations – including 10 fully built-out stores – with four operational dispensaries.
The company also owns “underutilized production facilities” that are currently producing about 8,000 pounds of cannabis annually.
MedMen said it plans to use the private placement funding to:
- Expand and boost use of existing production facilities with the goal to increase annual cultivation capacity from 8,000 pounds to 22,000 pounds.
- Increase its manufacturing capacity and allow for the introduction of Mary’s Medicinals products and Dixie Brands edibles.
- Have 15 operational stores open to serve Florida patients within the next year, once the increased capacity is completed.
The proceeds also will be used to bankroll the opening of locations in California, Illinois and Massachusetts as well as for general corporate purposes.
MedMen has reduced its stake in assets elsewhere.
In February, Massachusetts-based Ascend Wellness Holdings (AWH) said it is acquiring an 86.7% interest in MedMen’s cannabis operation in New York for $63 million.
Multistate operator AWH has an option to acquire the remaining equity in the New York operation for $10 million, contingent on the launch of an adult-use marijuana market in the state.
MedMen trades on the Canadian Securities Exchange under the ticker symbol MMEN and on the U.S. over-the-counter markets as MMNFF.