Ascend Dumps Its MedMen New York Deal


Ascend made fairly unfavourable feedback concerning the New York market in its choice to again out of shopping for MedMen’s property.

After spending money and time combating MedMen (OTC: MMNFF) to shut on its unique settlement to promote its New York property to Ascend Wellness (OTC: AAWH), the corporate apparently had purchaser regret. Within the frenzy of quite a few corporations reporting earnings final week, Ascend’s remark to buyers appeared to remain underneath the radar. Ascend CEO Abner Kurtin determined to not shut the transaction. The corporate mentioned throughout its earnings name,

We’ve got been engaged in negotiations with MedMen for 17 months and,

due to the state of MedMen’s property, it’s time for all of us to maneuver on. As a result of we is not going to be

shifting ahead with the MedMen transaction, we’ve $70 million of unencumbered money at a time

when money is (inaudible). As well as, as a lot of you understand, the regulatory setting in New York

stays extremely unsure given the unknown timing of the graduation of adult-use gross sales, unclear

licensing course of, and the shortage of policing of the illicit market. Because of this, the New York market isn’t a

precedence for AWH, however we are going to proceed to watch it carefully.

Kurtin was requested on the earnings name whether or not the choice to bail out of the MedMen deal would end in extra litigation. He answered, “By way of New York, there’s actually no settlement as a result of we had signed a time period sheet for a settlement that ended up not going ahead. The remaining litigation is by us to shut the unique transaction that they failed to shut final December. So, we anticipate this being the tip of the matter, although we will’t management what others do. As we transfer ahead right here, we’re wanting, per the termination settlement, to the refund of sure monies that we paid from them on the outset of the transaction.”

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New York Fears

Kurtin went on to precise his doubts concerning the New York market. He mentioned, “So the best way I’d describe New York is the best beta alternative within the nation. New York, clearly, 20 million folks going grownup use, has a variety of potential. The issue is, as we mentioned, there’s no visibility on a bunch of points and the regulators don’t appear significantly clear about what they wish to do with licensing and what they wish to do with the illicit market. That provides the potential for New York to finish up like L.A. And L.A., as we all know, is a really troublesome marketplace for

hashish operators. However we don’t have a crystal ball and it might be nice and we’re going to take a look at different alternatives to enter that state. Simply as that deal terminated and we take a look at recent alternatives, we’re extra enthusiastic about Ohio and Maryland and increasing in Illinois and the flexibility to increase in our core states the place we’re having success. So, for us, it’s extra about that than a specific view on New York”

As regards to Ohio, Ascend introduced final week that it was shopping for Ohio Affected person Entry LLC. This transaction will add three medical dispensaries to its portfolio in Ohio and can deliver Ascend to the state-imposed 5 dispensary cap and additional its publicity to this extremely populated state with near-term rec potential. Kurtin mentioned, “We’ve got plans to construct the dispensaries in central retail quarters in Sandusky, Piqua, and Cincinnati, respectively. The Cincinnati location will probably be our Ohio flagship retailer and would be the solely dispensary in downtown Cincinnati. Not solely will the dispensary be throughout the road from a on line casino and fewer than a mile from the Bengals and Reds Stadium, however it’s the closest dispenser to the Kentucky border and intersects two main highways. This mannequin is consultant of our core retail philosophy to by no means sacrifice location.”

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MedMen additionally doesn’t appear eager about its New York property even after it fought to maintain the take care of Ascend from going by means of. The corporate mentioned it was promoting the property when it introduced it had closed on a deal to promote its Florida property. Through the authorized wrangling, MedMen had been accused of letting the New York properties decline and the corporate is rumored to have a really excessive hire fee on its costly fifth Avenue location.

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