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MedMen Terminates Deal To Acquire PharmaCann

MedMen Enterprises Inc., a California-based multi-state marijuana operator, said it has decided to terminate the deal to acquire marijuana company PharmaCann LLC in all-stock transaction, citing market developments over the past twelve months and the continued evolution of its business strategy.

The company also named Zeeshan Hyder as its new chief financial officer, succeeding Michael Kramer, whose employment was terminated.

In a press release, MedMen said that the decision to terminate the acquisition deal was a mutual one on the part of the company and Chicago-based PharmaCann.

According to MedMen, its board has decided to now focus on building the company's retail brand and digital platform as these will create greater shareholder value than the completion of the transaction. The company will increasingly focus on California.

In exchange of forgiving some debt, PharmaCann has agreed to transfer certain cannabis licenses and related assets in Illinois as well as Virginia to MedMen for no additional consideration.

PharmaCann has agreed to pay a termination fee to MedMen through a transfer of the membership interests in three entities holding four assets.

"The cannabis sector has evolved tremendously since we first announced the PharmaCann transaction and based on the current macro-environment and future opportunities that exist for our business, we believe it is now in the best interest of our shareholders to deepen, rather than widen, our Company's reach," said Adam Bierman, MedMen co-founder and chief executive officer.

MedMen said in late December 2018 that it agreed to acquire PharmaCann. Under the deal, PharmaCann unitholders were expected to receive about 168.4 million shares in the combined company.

MedMen cited several reasons for its decision to terminate the PharmaCann acquisition.

The company noted that the Horizons Marijuana Life Sciences Index or the HMMJ Index, a Canadian exchange-traded fund that tracks the North American Medical Marijuana Index, is down 47 percent since March 2019.

"The underperformance has made it increasingly more critical to allocate capital efficiently given the current industry headwinds," MedMen said.

Further, the company added that regulatory hurdles at the federal and state level delayed the integration of the companies.

MedMen also said it has appointed Zeeshan Hyder as its chief financial officer. Hyder, currently MedMen's Chief Corporate Development Officer, succeeds Michael Kramer, whose employment has been terminated as of October 7, 2019.

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