On August 17, 2021, MedMen Enterprises Inc. amended and restated a securities purchase agreement (the “Facility”) pursuant to which MedMen had previously issued an aggregate of approximately US$187.6 million principal amount of senior secured convertible notes (“Notes”) to funds affiliated with Gotham Green Partners, LLC and other funds (collectively, “GGP”), to among other things eliminate cash interest obligations and instead provide for pay-in-kind interest, eliminate certain repricing provisions, eliminate and revise certain restrictive and affirmative covenants, and provide the holders of the Notes with a top-up right to acquire additional MedMen shares and a pre-emptive right with respect to certain equity issuances of MedMen.
In connection with the amendment, a newly formed limited partnership established by Tilray, Inc. and other strategic investors acquired an aggregate principal amount of approximately US$165.8 million of the Notes and associated warrants (“Facility Warrants”) held by GGP, representing 75% of the outstanding Notes and 65% of the outstanding Facility Warrants. MedMen granted Tilray the right to appoint two non-voting observers to MedMen’s board of directors.
MedMen concurrently completed a private placement of US$100 million of units at a purchase price of US$0.24 per unit to a group of investors led by Serruya Private Equity. Each unit consists of one MedMen share and one-quarter share purchase warrant, with each whole warrant permitting the holder to purchase one MedMen share for a period of five years from the date of issuance at an exercise price of US$0.288 per share. Each unit issued to certain funds associated with Serruya also included a proportionate interest in a short-term warrant that entitles the holders to acquire, on payment of US$30 million, at the option of the holders, an aggregate of 125,000,000 units at an exercise price of US$0.24 per unit, or US$30 million principal amount of notes convertible into 125,000,000 MedMen shares at a conversion price of US$0.24 per share.
Cassels acted for MedMen.