MedMen Acquires Multi-state License-holder, PharmaCann; Increases Reach to 12 States

LOS ANGELES – Juxtaposed with a dizzying two-day drop of the stock market was a large deal by Los Angeles-based MedMen, which Thursday announced the signing of a binding letter of intent with Oak Park, Illinois-based PharmaCann to acquire the latter company in an all-stock transaction worth a reported $682 million. According to a press release, the deal, which was approved unanimously by the board of directors of both companies, would be “the largest acquisition transaction in U.S. cannabis history,” with PharmaCann unit holders owning “approximately 25 percent of the pro-forma company, on a fully-diluted basis, upon close.”

After the inclusion of pending acquisitions by MedMen, the resulting entity will have a portfolio of “cannabis licenses in 12 states that will permit the combined company to operate 79 cannabis facilities,” said Medmen in a statement. The 12 states, it added, “comprise a total estimated addressable market, as of 2030, of approximately $40 billion.”

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With this deal. MedMen adds licenses in several states. PharmaCann currently operates 10 retail shops and three cultivation and production facilities in eastern states like New York, Maryland, and Massachusetts, and in Illinois, it is the largest holder of medical cannabis licenses. Founded in 2014, PharmaCann also has retail licenses in Pennsylvania, Maryland, Massachusetts, Ohio, Virginia, and Michigan, as well as cultivation and production licenses in all its markets, excluding Maryland.

Calling the deal “a transformative acquisition that will create the largest U.S. cannabis company in the world’s largest cannabis market,” MedMen chief executive officer and co-founder Adam Bierman spoke to the company’s newfound ability to expand its “U.S. retail footprint across important growth markets while strengthening our cultivation and production capabilities.

“With the revenue synergies that the deal is expected to produce,” he added, “MedMen is well positioned to continue executing on our growth strategy. This would not have been possible even two years ago and is a testament to how far both the industry and these two companies have evolved. PharmaCann’s leadership has built a world-class organization, and we are excited about the value this transaction is creating for shareholders.”

Speaking of growth, MedMen announced the day before the PharmaCann announcement that it has obtained its first license in the Bay Area of California in a deal with Berkeley Patients Group. As a result, said the company, “MedMen will have one of only two adult-use licenses issued in the City of Emeryville, just outside San Francisco.”

A recent move by MedMen also underscores its ambitions to be not only world-class but a presence throughout the world. Two days before the PharmaCann announcement, the company announced the hiring of Ben Cook, a global veteran in distribution and logistics who was most recently employed as senior vice president of supply chain for Sam’s Club in Bentonville, Arkansas.

Adam Bierman is scheduled to appear on CNBC’s “Mad Money” this afternoon.

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