During an earnings call on Monday, Ascend Wellness Holdings Inc. said they were no longer moving forward with their planned takeover of MedMen New York. During the call, Ascend founder and CEO Abner Kurtin said the company was calling off the $88 million deal over concerns about MedMen’s assets, which he described as “deteriorated materially” since December 31.
“We have been engaged in negotiations with MedMen for 17 months and because of the state of MedMen’s assets, it is time for all of us to move on. Because we will not be moving forward with the MedMen transaction, we have $70 million of unencumbered cash at a time when cash is dear.” — Kurtin during the August 15 earnings call
Ascend had already paid $4 million to MedMen New York as a deposit toward the $74 million closing consideration at the time of the May settlement; Ascend was also to make a $14 million payment upon the first sale of adult-use cannabis in a MedMen New York dispensary, according to a Cannabis Business Times report.
The deal had been wrought with allegations from MedMen, including that New York Gov. Kathy Hochul’s (D) office used its influence to help Ascend purchase the company. Ascend countered that MedMen New York fabricated the narrative that claimed the firm “exerted undue influence on New York State government officials in order to obtain regulatory approval.” MedMen New York ultimately withdrew those allegations. Mylan Denerstein, a lawyer representing Ascend, told amNY in February that “when exposed to the slightest scrutiny” MedMen’s claims “collapsed” like “any house of cards.”
During the call, Kurtin added that New York was not a priority for the company due to the state’s “highly uncertain” regulatory environment, the “unknown timing of the commencement of adult-use sales, unclear licensing process, and the lack of policing of the illicit market.”
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