Multistate marijuana operator Ascend Wellness Holdings said Friday that filed a lawsuit seeking to force MedMen Enterprises to complete the sale of a majority stake in a New York marijuana operation.
The lawsuit, in the commercial division of the New York State Supreme Court, also seeks a preliminary injunction and a temporary restraining order preventing MedMen from doing anything that could affect the New York asset, Ascend said in a statement. press.
New York-based Ascend has claimed that Los Angeles-based MedMen “material breach” an agreement announced in February 2021 to sell an 86.7% stake in MedMen’s New York operation for at least $63 million.
Ascend goes to court after issuing two press releases on the matter earlier this month and filed a letter with the US Securities and Exchange Commission.
MedMen has not said why it is seeking to terminate the agreement.
But in regulatory filings, MedMen said it notified Ascend on January 2 of the termination of the investment deal.
In a subsequent regulatory filing on January 10, MedMen said that as a result of the termination of the deal, it must pay Ascend a “working capital advance” and a deposit of $4 million.
MedMen did not immediately respond to MJBizDailyrequest for additional comments.
The investment agreement was signed a month before New York approved a measure legalizing recreational marijuana. The state is now preparing for what is expected to be a multi-billion dollar recreational marijuana industry.
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MedMen, which holds one of 10 medical cannabis licenses in the state, agreed to sell a majority stake in its New York operation at a time when it was experiencing financial difficulties.
But since agreeing to the sale, MedMen recently named its third CEO in two years.
It’s unclear whether that executive change caused MedMen to reconsider the sale of New York.