Ascend Wellness Holdings, a multistate cannabis business that’s hoping to set up operations in New York, just announced that it’s on track to blow out the legal haze around its empire state licensing deal.
Ascend said Wednesday that it has come to an agreement with MedMen, a Los Angeles-based cannabis company that owns one of 10 medical marijuana licenses in New York, to buy the latter company’s licensed operations for an additional $15 million as part of a legal settlement.
Ascend filed a lawsuit in state court in January against MedMen that claimed the latter company was in breach of a contract to hand over $73 million worth of in-state operations.
In response, MedMen filed a counterclaim at the end of January accusing Ascend of leaning on Gov. Hochul’s administration and the Office of Cannabis Management to approve the license transfer between the two companies. Soon after Ascend’s legal counsel provided evidence that conflicted with MedMen’s assertions, and the governor’s office denied the allegations.
Now, as part of the settlement, MedMen has agreed to complete the sale of the license and withdraw its counterclaims against Ascend. The companies expect to close the transaction over the next month, Ascend said.
“We are thrilled to put this dispute behind us and look forward to the imminent closing of this transaction,” said Abner Kurtin, Ascend’s founder. “We continue to build scale in some of the most sought-after locations in premier, limited license markets in the country, and with this investment, we will bring our high-quality products and exceptional retail experiences to our seventh state.
As part of the deal, Ascend will take over the medical cannabis license, serving New York patients through four dispensaries in Manhattan, Long Island, Syracuse, and Buffalo, with a cultivation facility in Utica.
Ascend will pay MedMen $74 million at the close of the transaction, $1 million more than their previous deal. The terms of the agreement will give Ascend a 99.99 percent controlling interest in MedMen NY, and in return Ascend will make a subsequent payment of $14 million after the first sale of recreational cannabis in a MedMen NY dispensary.
“We look forward to shifting our attention toward operating the four dispensaries, expanding the cultivation facility, and working alongside the Office of Cannabis Management and the Cannabis Control Board. Servicing the patients of New York, creating diverse jobs, and enhancing our social-equity initiatives throughout the state are among my top priorities,” said Ascend President T. Andrew Brown.