Just days after MedMen Enterprises Inc. (CSE:MMEN) (OTC:MMNFF) announced a senior secured convertible credit facility of up to $250,000,000 USD from funds managed by Gotham Green Partners, the U.S.-focused multi-state cannabis operator is coming back to the capital markets for more money.
MedMen’s Offering Details
According to the announcement from MedMen this morning, the shelf prospectus will, subject to securities regulatory requirements, allow MedMen Enterprises to make offerings of up to $500 million CAD of any combination of Class B subordinate voting shares, preferred shares, debt securities, subscription receipts, warrants, and units during the 25-month period that the shelf prospectus, including any amendments thereto, remains valid.
Why Does MedMen Need More Money?
MedMen has money, but it needs more to facilitate mergers and acquisitions. In the current marijuana market climate, the companies with access to capital are the ones rolling up their competitors to create the massive cannabis conglomerates that we will all come to know and love.
According to the release from MedMen, “The nature, size and timing of any such offerings (if any) will depend, in part, on the Company’s assessment of its requirements for funding and general market conditions. Unless otherwise specified in a prospectus supplement relating to a particular offering of Securities, the net proceeds from any sale of any Securities are expected to be used for general corporate purposes, including funding ongoing operations and/or working capital requirements, to repay indebtedness outstanding from time to time, discretionary capital programs and potential future acquisitions.”
Conclusion
As MedMen continues to make moves in the marijuana industry, capital is key. While dilution is inevitable under the structure of this offering, Wall Street is still bullish. Northland Securities, Inc. Managing Director and Senior Research Analyst covering Special Situations, Paul Penney, recently reiterated his buy rating on shares of MedMen Enterprises Inc. with a very bullish price target.
That said, these things are always subject to change. Be sure to subscribe to updates here so you never miss an important development.
Disclaimer: This article shall not and does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, MedMen Enterprises Inc. securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. The securities mentioned above have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from the registration requirements.
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