Wall Street learned this week that MedMen has terminated the $73 million sale for control of its New York business to Ascend Wellness.
The two companies had agreed in February of 2021 Ascend would invest $73 million in order to receive controlling interest in 86.7% of the company’s New York properties.
Ascend also had an option to purchase the remaining amount in the future.
MedMen had submitted an application to the New York regulators as of March 11, 2021, for approval of its New York business to Ascend.
It was in mid 2021 that New York had transferred oversight of the cannabis program from the Department of Health to the newly created Office of Cannabis Management (OCM). Ascend claims that MedMen did not pursue the state’s approval causing the company to step in and push the process along. New York then gave its approval on December 16.
The use of the word “conditionally” in the approval caused MedMen to claim that the approval wasn’t final and so they could terminate the deal.
On Friday, Ascend filed a complaint in the Commercial Division of the Supreme Court of the State of New York in New York County against MedMen NY, Inc. and MM Enterprises USA, LLC in which Ascend is trying to get MedMen to go through with the deal.
Ascend has also made an application for a preliminary injunction and temporary restraining order to maintain the status quo between the parties and to prevent any actions by the MedMen parties that would result in additional encumbrances on the equity or assets of MedMen NY, Inc.
MedMen is challenging and disregarding the determination of the Office of Cannabis Management and the Cannabis Control Board of the State of New York which approved the transaction.
