MedMen Raises $94 Million with Senior Secured Term Loan at 7.5%

MedMen Closes C$94 Million Term Loan at 7.5% Interest

Transaction Comes on the Heels of C$86 Million Bought Deal as Company Expands its Footprint Across U.S.

October 01, 2018
LOS ANGELES–October 01, 2018–(BUSINESS WIRE)–MedMen Enterprises Inc. (“MedMen” or the “Company”) (CSE: MMEN) (OTCQB: MMNFF) (FSE: A2JM6N) announced today that it has closed a C$93,822,023 (US$73,275,000) senior secured term loan facility (the “Facility”) with funds managed by Hankey Capital and with an affiliate of Stable Road Capital as the largest loan participant.

The principal amount under the Facility will accrue interest at a rate of 7.5 percent per annum, paid monthly, with a maturity date of 24 months following the date of closing on October 1st, 2018. The Facility will be used for acquisitions, capital expenditures and general corporate purposes.

This industry is more investable than ever, and this loan is reflective of that progress. Hankey Capital and Stable Road Capital’s knowledge of this sector and their creativity allowed us to structure one of the first true senior secured loans in cannabis.

MedMen Co-founder and Chief Executive Officer Adam Bierman

Our operations in the primary markets of California, Nevada and New York are robust, and now we are turning our attention to the most promising and strategic markets across the country and the industry.

The Facility comes on the heels of a recent bought deal that raised C$86 million (US$67 million). MedMen may repay the balance of the Facility at any time and from time to time, in whole or in part, with a prepayment penalty of 1.0 percent of the outstanding principal amount repaid if repaid before December 31, 2019. Additionally, an affiliate of MedMen has issued to the lenders 8,105,642 warrants, each being exercisable for one Class B Common Share of such company at a purchase price per share of C$6.37 (US$4.97) for a period of 30 months (“Lender Warrants”). Such Class B Common Shares are redeemable in accordance with their terms for Class B Subordinate Voting Shares of the Company. The Company is also planning the structured sale to a special purpose real estate entity focused on the cannabis sector of real estate assets it currently owns in key markets, as previously disclosed in the Company’s press release dated September 21, 2018.

MedMen has an unmatched track record of execution in this fast-growing industry. “We are proud to facilitate MedMen’s growth with capital that can enhance value for all stakeholders and we look forward to a long-term partnership.

Stable Road Chief Investment Officer Brian Kabot

In addition to providing a portion of the Facility, Stable Road is providing advisory services to MedMen. Advisory services include introducing MedMen to brands and various service providers, advice on the Facility and providing advice with respect to MedMen’s planned structured sale of real estate assets described above. For its advisory services, Stable Road will receive additional Lender Warrants.

ABOUT MEDMEN:

MedMen Enterprises is a leading cannabis company in the U.S. with assets and operations across the country. Based in Los Angeles, MedMen brings expertise and capital to the cannabis industry and is one of the nation’s largest financial supporters of progressive marijuana laws. Visit http://www.medmen.com

ABOUT HANKEY CAPITAL:

Hankey Capital is a single-family office based in Southern California. As a balance sheet lender, Hankey originates financing in the $2 million to $100 million range primarily secured by commercial real estate as well as other forms of collateral. The Firm specializes in niches overlooked by banks and other traditional capital sources. Through 3Q 2018, Hankey Capital has over $850 million in loans on its balance sheet. The Firm is part of privately-held Hankey Group of Companies lead by Don Hankey with assets nearing $10 billion.

http://www.hankeycapital.com/

ABOUT STABLE ROAD CAPITAL:

Stable Road Capital is a family office employing an opportunistic approach to fundamental value investing. The Firm focuses on acquiring and investing in high quality operating businesses, assets and funds. While the Firm is generally industry agnostic, Stable Road Capital has dedicated considerable resources to advising and investing in the cannabis sector, focusing on large vertically integrated players, individual brands, and industry specific private equity funds.

https://www.stableroadcapital.com/

Original press release

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