A monthslong legal battle between a pair of multistate cannabis operators over a definitive acquisition agreement is on its way to being resolved.
New York-based Ascend Wellness Holdings Inc. (AWH) announced May 11 that it signed a term sheet to settle a lawsuit against Los Angeles-based MedMen Enterprises Inc. and acquire 99.99% controlling interest in subsidiary MedMen New York Inc. (MMNY) for $88 million—$15 million more than originally considered.
The filings in the lawsuit stemmed from an earlier $73-million definitive investment agreement between the two companies on Feb. 25, 2021. One of New York’s 10 licenses to distribute medical cannabis was on the table in that agreement.
But MedMen officials backed out of the deal, announcing Jan. 3, 2022, their decision to terminate the investment agreement just weeks after the two companies received final approval from the New York Cannabis Control Board and the state’s Office of Cannabis Management for the acquisition, sparking legal claims.
To settle the dispute, Ascend officials announced Wednesday that they will increase the transaction consideration by $15 million, $4 million of which is contingent on the start of adult-use sales at an MMNY dispensary.