Cannabis Business Times reports
Although its headquarters are in New York City, cannabis multistate operator Ascend Wellness Holdings (AWH) is no longer going to roll the dice with a market entrance in its home state.
After resolving a monthslong legal battle over a definitive acquisition agreement with MedMen New York (MMNY) in May—with the two companies finally agreeing to an $88-million deal—Ascend founder and CEO Abner Kurtin said this week his company is no longer interested in closing the transaction.
RELATED: Ascend Wellness, MedMen Resolve M&A Lawsuit With $88-Million Deal
Kurtin told investors during a second quarter 2022 earnings call Aug. 15 that due to concerns about the status of MMNY’s assets, “which have deteriorated materially” since Dec. 31, Ascend is no longer moving forward with the transaction.
“We have been engaged in negotiations with MedMen for 17 months and because of the state of MedMen’s assets, it is time for all of us to move on,” Kurtin said. “Because we will not be moving forward with the MedMen transaction, we have $70 million of unencumbered cash at a time when cash is dear.”
Ascend had already paid $4 million to MMNY as a deposit toward the $74-million closing consideration at the time of the settlement in May. Also in the settlement, Ascend was to make a subsequent payment of $14 million upon the first sale of adult-use cannabis in an MMNY dispensary.
According to Ascend’s financial results, the company ended the second quarter (June 30, 2022) with $140.6 million in cash and cash equivalents—which includes the unspent $70 million from the canceled MMNY deal—enough to fuel its near-term initiatives as business operations are now geared toward generating cash flow, Kurtin said.
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