It was a shocking day in the legal marijuana industry when MedMen and PharmaCann revealed that they have terminated their $682 million cannabis merger. It was also announced that MedMen’s CFO had been ousted.

Los Angeles-based MedMen said that the acquisition of Pharmacann was scraped and instead the company would focus on amlifying its retail operations. The company said the decision allows it to “deepen” its presence in the “core” retail markets of California, Florida, Illinois, Massachusetts, Nevada and New York.

The company’s chief financial officer, Michael Kramer, has also been outed and is being replaced immediately with the company’s chief corporate development officer, Zeeshan Hyder.

The developments are surprising considering recently both companies had complied with antitrust obligations under Hart-Scott-Rodino (HSR) requirements and said that the deal was now expected to close by the end of this year.

“We understand the need to pivot in a rapidly evolving industry, but this announcement comes as a surprise to us, particularly given the timing of the HSR expiry press release issued less than a month ago, which consisted of optimistic management commentary in regards to the deal’s prospects,” remarked Vivien Azer, an analyst at Cowen.

MedMen said the decision to terminate the acquisition was mutual. The company reports fourth-quarter results on Oct. 28.

“The cannabis sector has evolved tremendously since we first announced the PharmaCann transaction and based on the current macro-environment and future opportunities that exist for our business, we believe it is now in the best interest of our shareholders to deepen, rather than widen, our company’s reach,” Adam Bierman, MedMen co-founder and CEO, stated.

“Today we turn the page and begin a new future for our company and our stakeholders,” PharmaCann Executive Director Greg Cappelli said in a statement.

“Over the past 12 months, PharmaCann has more than tripled its revenues through organic growth in Illinois, New York, and Massachusetts, as well as through recent store openings in Ohio and Pennsylvania,” he added.

“Additionally, we continue to make progress on the construction of our Ohio, Massachusetts and Pennsylvania cultivation and processing sites, which are expected to become operational in 2020.”

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