Los Angeles-based cannabis company MedMen Enterprises Inc (CSE:MMEN; OTCQB:MMNFF) cut a deal Tuesday with WhiteStar Solutions LLC to acquire control of Monarch, an Arizona-based licensed medical-cannabis license holder with dispensary, cultivation and processing operations through Omaha Management Services LLC.
MedMen will also acquire WhiteStar’s exclusive co-manufacturing and licensing agreements with Kiva, Mirth Provisions and Huxton for the state of Arizona.
“Our strategy has been to establish our brand in the primary markets of California, Nevada and New York,” said MedMen Enterprises co-founder and CEO Adam Bierman in a statement.
“We have a leading presence in those primary markets and we are now ready to expand our reach. Arizona, with its robust medical marijuana program and connectivity to California and Nevada where our brand is already strong, makes this a great fit,” he added.
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Arizona is one the largest medical marijuana markets in the United States with more than 172,000 patients. It also represents one of the larger addressable adult-use markets in the US. A ballot measure to legalize adult-use narrowly missed in 2016 and is expected to return in 2020.
Founded in 2013, Monarch is among the top medical marijuana dispensaries in the country. It is the first cannabis dispensary in Scottsdale in Arizona with revenue of over $10 million.
In addition to the medical marijuana dispensary, Monarch is licensed to operate a 20,000-square-foot cultivation and manufacturing facility in Mesa, Arizona. As one of the top wholesalers in the Arizona market, Monarch distributes branded products to over 60 dispensaries in the state.
MedMen will pay approximately 80% in stock and 20% in cash for control of Monarch. The transaction is expected to close within 90 days and is subject to customary closing conditions.
The newly public MedMen already operates 18 cannabis facilities in California, Nevada and New York.
Shares of the Los Angeles-based company closed nearly 5% up to $4.06 Monday.
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