MedMen to Raise $100 Million Selling Units at $0.24

MedMen Announces Backstopped US$100M Equity Investment Led by Serruya Private Equity to Fund Expansion and Transform Balance Sheet

LOS ANGELES, August 17, 2021–(BUSINESS WIRE)–MedMen Enterprises Inc. (“MedMen” or the “Company”) (CSE: MMEN) (OTCQX: MMNFF), a premier U.S. cannabis retailer, today announced that investors, led by Serruya Private Equity (“SPE”), are purchasing US$100 million of units (“Units”) of Medmen at a purchase price of US$0.24 (C$0.32) per Unit (the “Private Placement”). Certain investors associated with SPE agreed to backstop the US$100 million to be raised in the Private Placement (the “Backstop Commitment”).

The US$100 million in proceeds from the Private Placement will allow MedMen to expand its operations in key markets such as California, Florida, Illinois and Massachusetts and identify and accelerate further growth opportunities across the United States.

This US$100 million investment is a game-changer for our Company, strengthening our balance sheet and creating a platform for our future growth.

Tom Lynch, CEO of MedMen

This transaction gives us the flexibility and firepower to match our revenue trajectory to our operational expertise and internationally renowned brand. MedMen 2.0 is here, and we are thrilled to embark on the next stage of our journey.

In connection with the Private Placement, the Company appointed Michael Serruya to its Board of Directors as its seventh member.

In addition, the Company also announced today that a group of strategic investors have acquired from other investors a majority of the notes under the Company’s senior secured convertible notes facility, and that the parties have entered into an amendment and extension to the senior secured convertible notes facility.

Each Unit being issued to certain investors in the Private Placement consists of one Class B subordinate voting share (each, a “Share”) and one quarter share purchase warrant (each, a “Warrant”). Each whole Warrant permits the holder to purchase one Share for a period of five years from the date of issuance at an exercise price of US$0.288 (C$0.384) per Share. Each Unit issued to certain SPE purchasers consists of one Share and one quarter of one Warrant plus a proportionate interest in a short-term warrant (the “Short-Term Warrant”) which expires on December 31, 2021. The Short-Term Warrant, which will be issued to certain of the SPE purchasers, entitles the holders to acquire, on payment of US$30 million, at the option of the holders, Units at an exercise price of US$0.24 (C$0.32) per Unit, or US$30 million principal amount of notes at par, convertible into Shares at a conversion price of US$0.24 (C$0.32) per Share. The Company will use any proceeds from exercise of the Short-Term Warrant to pay down an existing debt instrument. In consideration for the Backstop Commitment, certain investors associated with SPE will receive a fee of US$2.5 million to be paid in the form of Shares at a deemed price of US$0.24 (C$0.32). Any amounts subject to the Backstop Commitment are expected to be paid to the Company on or before August 19, 2021. Due to regulatory considerations, the Company may, at its option, settle any such backstop amounts in Units, in the form of unsecured, interest-free convertible notes, which would mature ten years from the date of issuance, or both.

The Company has scheduled a call at 5 p.m. ET Tuesday, August 17, and issued a presentation for more details on the transactions described above and the Company’s retail footprint and strategy.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities being offered have not been registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the U.S. Securities Act, and applicable state securities laws. The Company has agreed to provide customary registration rights with respect to the Shares underlying the Units and Warrants.

For more details, investors and security holders may visit the investor page of MedMen’s website at https://investors.medmen.com.

About MedMen

MedMen is a premier American cannabis retailer with an operational footprint in California, Nevada, Illinois, Arizona, Massachusetts, and Florida. MedMen offers a robust selection of high-quality products, including MedMen-owned brands MedMen Red and LuxLyte through its premium retail stores, proprietary delivery service, as well as curbside and in-store pick up. MedMen Buds, an industry-first loyalty program, provides exclusive access to promotions, product drops and content. MedMen believes that a world where cannabis is legal and regulated is safer, healthier, and happier. Learn more about MedMen at www.medmen.com.

About Serruya Private Equity

Serruya Private Equity is a global private equity firm focused on transforming companies by collaborating with management to develop and implement strategies which leverage SPE’s existing operational and financial resources. SPE invests capital in a broad range of asset classes with an emphasis on retail and consumer packaged goods. SPE’s principals have a wealth of experience developing brands including Weight Watchers, Tropicana, Godiva Ice Cream, Cold Stone Creamery, Round Table Pizza, Great American Cookies, Marble Slab Creamery, Hot Dog on a Stick, Taco Time, Blimpie Subs, and Pretzelmaker. SPE’s platform currently includes global brands Yogen Früz, Pinkberry, and Swensens with over 1,300 stores across 40 countries. For more information please visit www.serruyaprivateequity.com.

Original press release

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