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Cannabis Summary for May 11, 2022

2022-05-11 20:10 ET - Market Summary

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by Stockwatch Business Reporter

The S&P/TSX Cannabis Index lost 4.81 to 51.90, while the CSE Composite Index lost 7.38 to 317.98. South of the border, two U.S. MSOs (multistate operators) put down their swords. Abner Kurtin's Ascend Wellness Holdings Inc. (AAWH.U), up three U.S. cents to $3.05 (U.S.) on 42,000 shares, has signed a term sheet to end its New York courtroom battle with Michael Serruya's Medmen Enterprises Inc. (MMEN), down one cent to 12 cents on 3.65 million shares.

The dispute revolved around a scuppered New York asset sale. Medmen agreed in February, 2021, to sell its New York operations to Ascend for $73-million (U.S.). It terminated the sale in January, 2022, prompting Ascend to haul it to court. The increasingly bitter fight saw Medmen accuse Ascend of being in cahoots with the New York regulators to force approval of the deal, while Ascend said Medmen was telling lies to cover up its own seller's remorse.

Now, in a snap, both companies are friendly again. Medmen and Ascend have agreed that Ascend can have the assets after all, as long as it pays Medmen the higher purchase price of $88-million (U.S.), an increase of $15-million (U.S.) or 20 per cent. The revised price tag comprises $15-million (U.S.) cash and $73-million (U.S.) in assumed debt. (It of course does not include the amounts that Ascend has already paid its surely disappointed lawyers.)

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