Cannabis REIT to Acquire MedMen Real Estate, Looks to Capitalize on Fast Growing Sector
Treehouse Real Estate Investment Trust raises $133 million, will use funds to acquire properties from MedMen Enterprises Inc. along with other cannabis real estate
LOS ANGELES, January 07, 2019–(BUSINESS WIRE)–MedMen Enterprises Inc. (“MedMen” or the “Company”) (CSE: MMEN) (OTCQX: MMNFF) (FSE: A2JM6N) today announced that Treehouse Real Estate Investment Trust (“Treehouse”) has completed its first round of capital raise at $133 million and will partially use the funds to purchase properties from the Company.
The newly formed real estate investment vehicle looks to capitalize on the fast-growing cannabis industry in the U.S. that is projected to grow to $75 billion in gross sales by 2030, according to Wall Street research firm Cowen & Co.
This capital raise further proves the U.S. cannabis industry today is more investable than ever. MedMen’s relationship with Treehouse will allow us to unlock significant value for MedMen shareholders by spinning out our real estate holdings and deploying the proceeds into accretive growth opportunities for the Company.
MedMen CEO and Co-founder Adam Bierman
Treehouse is a collaboration between MedMen and Stable Road Capital, a Venice, California-based investment firm with successful track records in real estate and cannabis. Treehouse is governed by an independent board. Treehouse has a management contract with MedMen to oversee day-to-day operations until Treehouse goes public, at which point management will be internalized.
It is expected that Treehouse’s initial sale-leaseback transactions will occur with MedMen. These potential transactions include real estate related to retail stores, and cultivation and production facilities. The Company intends to use the proceeds from the prospective transactions to assist in funding the buildout of its national footprint that includes 76 retail licenses and 16 cultivation and manufacturing licenses in 12 states. The Company currently operates 16 stores and 3 cultivation and manufacturing facilities.
Subsequent to the initial transaction, Treehouse will have a three-year right of first offer on additional MedMen-owned facilities and development projects. With the launch of Treehouse, MedMen has the opportunity to significantly reduce future capital expenditures related to its retail and cultivation licenses.
To provide further details regarding the transaction and strategy behind Treehouse, MedMen will host an analyst call with Treehouse and Company officials on Tuesday, January 8, 2019 at 8:00 a.m. Eastern.
A live audio webcast of the call will be available on the Events and Presentations section of MedMen’s website at: https://investors.medmen.com/events-and-presentations/default.aspx and will be archived for replay.
Toll Free Dial-In Number: (844) 559-7829
International Dial-In Number: (647) 689-5387
Conference ID: 3585847
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
Treehouse Real Estate Investment Trust, Inc. is a newly-organized, externally managed real estate investment company focused on the acquisition, ownership and management of specialized retail and industrial properties leased to experienced, state-licensed operators for their regulated adult-use and medical-use cannabis facilities. Treehouse will initially be externally managed and advised by an affiliate of MedMen Enterprises Inc. Visit http://www.treehousereit.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. Visit https://www.stableroadcapital.com/