MedMen Reduces Operations to Four States with Sale of Arizona and Nevada Assets

LOS ANGELES- MedMen Enterprises Inc., a Florida-based cannabis company known for its extensive operational struggles, has taken a significant step in restructuring its business. On Wednesday, the company announced its decision to divest its cannabis assets in Arizona and Nevada, selling them to Mint Cannabis, an Arizona-based multistate operator. This strategic move signals MedMen’s exit from these markets, effectively reducing its operational footprint to just four states.

The divestiture includes the sale of MedMen’s subsidiary in Arizona and two of its dispensaries located in Las Vegas, Nevada. While the specific terms of the agreement remain undisclosed, this decision stems from MedMen’s comprehensive review and evaluation of potential divestiture opportunities. This move aligns with the company’s broader strategic efforts to stabilize and streamline its operations.

Ellen Deutsch Harrison, the CEO of MedMen who assumed leadership in July, expressed optimism about the company’s ongoing restructuring efforts. Harrison highlighted the benefits of these transactions, including improved liquidity, reduced liabilities, and the opportunity to focus more intently on operational efficiencies. She emphasized that this strategy would enable MedMen to pursue an asset-light growth approach in its core markets, which now include California, Illinois, Massachusetts, and New York.

Eivan Shahara, CEO of Mint Cannabis, expressed enthusiasm about the acquisition. The agreement will transfer ownership of MedMen’s Talking Stick dispensary in Scottsdale, Arizona, a grow facility in Mesa, Arizona, and two Las Vegas dispensaries to Mint Cannabis. Shahara underlined Mint Cannabis’s ambition to expand its footprint through organic growth and strategic acquisitions across key U.S. markets.

While MedMen restructures, it has also faced regulatory scrutiny. The company recently informed stock regulators about a delay in filing its third-quarter financial report for the period ending September 30. Although the company pledged to complete the filing by December 13, the report is still absent from SEDAR, the Canadian database for companies traded on the Canadian Securities Exchange.

This delay resulted in a management cease trade order issued by the British Columbia Securities Commission on November 1. The last reported earnings from MedMen, dating back to May for the third quarter of fiscal 2023, revealed a substantial working capital deficit of $383 million and a cash reserve of just $7.6 million.

MedMen’s decision to exit Arizona and Nevada and focus on its remaining key markets is a strategic maneuver aimed at revitalizing the company amidst ongoing financial and operational challenges. This move marks a pivotal point in the company’s efforts to restructure and reposition itself in the competitive cannabis industry.