MedMen in Binding ‘Letter of Intent’ To Merge Into Public Company in Canada
April 11, 2018, LOS ANGELES–(BUSINESS WIRE)–MM Enterprises USA, LLC, better known as MedMen Enterprises, announced today that it has entered into a binding “Letter of Intent” outlining the proposed terms and conditions pursuant to which MedMen Enterprises will effect a reverse takeover of OutdoorPartner Media Corporation.
MedMen Enterprises will become a publicly traded company through a reverse takeover, or RTO. In an RTO, the securityholders of a private company that aims to become publicly traded take over an existing public company. OutdoorPartner Media Corporation is an unlisted Canadian public company.
This is an important milestone in the evolution of MedMen and the increasingly global cannabis industry. A major U.S. cannabis company is set to be publicly traded on a bona fide stock exchange.
Adam Bierman, CEO and Co-Founder
For nearly a decade we have been at the leading edge of the modern cannabis industry, putting ourselves in a dominant position in the most significant cannabis markets in the U.S.; California, Nevada and New York.
Upon completion of the reverse takeover of OutdoorPartner Media Corporation by the securityholders of MedMen Enterprises, MedMen Enterprises will become a subsidiary of a publicly traded company, essentially becoming publicly traded itself. Additionally, MedMen Enterprises has entered into an engagement letter to conduct a brokered private placement offering of subscription receipts to accredited investors prior to completing its RTO transaction. The private placement will consist of an offering of subscription receipts that will be exchanged for common shares of the public company resulting from the RTO. Those common shares will have subordinated voting rights. Unlike an initial public offering, or IPO, in an RTO there is often a two-step process, the first of which is a private placement financing, as proposed by MedMen Enterprises, followed by an amalgamation or merger with a public company.
Cormark Securities Inc. and Canaccord Genuity Corp., leading Canadian independent investment dealers, will act as co-bookrunners and will assist the company in connection with its brokered private placement.
With vertically integrated operations in three states, including seven licensed stores in California’s newly opened adult-use market, MedMen is one of the most dominant players in the fast-growing cannabis industry. The company recently completed construction of a 45,000-square-foot factory in Northern Nevada, the largest and most high-tech cultivation and manufacturing cannabis facility in the state. And MedMen Manhattan, the first-of-a-kind marijuana store in New York is scheduled to open on Fifth Avenue on April 20th. MedMen also announced recently that it has entered into a joint-venture agreement with Cronos Group Inc. (Nasdaq: CRON) (TSX-V: CRON) to develop products and open MedMen branded stores in Canada’s potential adult-use market.
While the final structure and form of the transaction that will take MedMen Enterprises public will come in a more definitive agreement to follow, the Letter of Intent announced today incorporated the principal terms, MedMen officials said. Once the RTO is complete and all requirements for stock exchange listing satisfied, MedMen Enterprises will select a ticker symbol for the resulting public company’s shares, which will be traded under that symbol on the stock exchange.
The securities to be offered in the brokered private placement have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of, United States persons absent registration or any applicable exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws. This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Stock Exchange Matters
As of the date hereof, neither MedMen nor OutdoorPartner Media Corporation are listed or have made any application for listing on any stock exchange. A condition to the completion of the transaction is the approval for the listing of the resulting public company’s shares on the Canadian Securities Exchange.
Timing of the Transaction
Further details of the transaction will be included in subsequent news releases and disclosure documents to be filed by OutdoorPartner Media Corporation in connection with the transaction. It is anticipated that a shareholder meeting of OutdoorPartner Media Corporation to approve all required matters in connection with the transaction and closing of the transaction will take place in the second quarter of 2018.
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