U.S., Canada Cross Border Cannabis Venture
Los Angeles (March 19, 2018) – With Canada on track to legalize adult use of cannabis, two of the world’s largest cannabis companies announced a first-of-its-kind, cross-border joint venture today that could bring America’s most recognized cannabis brand to Canadian consumers by year’s end.
MM Enterprises USA, LLC (“MedMen Enterprises”), a leading U.S. cannabis company with facilities in California, Nevada, and New York, entered into an agreement with Cronos Group Inc. (Nasdaq: CRON) (TSX-V: CRON), a Canadian licensed producer and distributor of medical cannabis. Cronos, which also has a footprint in Germany, Israel, and Australia, recently became the first pure-play cannabis company traded on a major U.S. stock exchange, the Nasdaq.
The joint venture, called MedMen Canada Inc. (“MedMen Canada”), will develop branded products and open stores across Canada, leveraging Cronos’ Canadian reach and expertise and MedMen’s class-defining retail. MedMen is the largest cannabis retail chain in California, which welcomed adult use sales this year. The company owns and operates factories and stores in three states and anticipates going public in Canada in the second quarter of this year. Cronos operates two wholly-owned Canadian Licensed Producers under Health Canada’s Access to Cannabis for Medical Purposes Regulations: Peace Naturals Project Inc. and Original BC Ltd.
“MedMen Canada will give us entry into an important emerging market for adult use and broaden our exposure worldwide,” said MedMen CEO and Co-founder Adam Bierman. “We always take a very disciplined and focused approach to our growth, and it was important that we find the right partner for our expansion into Canada. Cronos has been a leader in the Canadian medical cannabis space, and their international track record makes them the perfect partner. They have the right infrastructure and expertise to successfully execute this venture.”
Canada legalized medical cannabis in 2013 and is home to some of the largest cannabis companies in the world. The federal government has announced plans to legalize adult use later this year, which would make Canada the first G7 country to federally legalize adult use.
“Cronos is focused on changing the perception of cannabis on an international scale, and we prioritize working with best-in-class partners who share our vision for the future. MedMen stores have been integral to mainstreaming cannabis, and they have become one of the most well-known and respected cannabis platforms in the U.S. We’re very excited to bring the MedMen experience to Canada,” said Cronos CEO Mike Gorenstein.
The joint venture will be a 50/50 partnership between the two companies. MedMen Canada will be focused on a branded national retail chain, branded products, and research and development activities. MedMen Canada will have access to Cronos’ 350,000 plus square feet of production facilities and future expansions while leveraging MedMen’s retail brand recognition. MedMen Canada will only operate in federally legal jurisdictions and in compliance with all applicable regulations.