ALBANY – In an unprecedented shakeup, hashish firm Ascend Wellness Holdings is asking New York’s prime court docket to pressure medical marijuana license holder MedMen at hand over its operations within the state.
MedMen, a multistate hashish agency, dedicated to giving up an 86.7 % stake in its New York enterprise final 12 months, in trade for about $73 million from competitor Ascend Wellness – a few of which has already been paid. However in early January, newly minted Chief Government Michael Serruya despatched discover to the investor that MedMen was pulling out of the deal.
In a criticism filed in state Supreme Courtroom on Thursday, a lawyer representing Ascend Wellness and its New York subsidiary claimed the termination of the deal was “in breach of the settlement” signed final February, and that the consumers have been “irreparably harmed” by MedMen’s abrupt withdrawal.
The criticism detailed how MedMen had been in a “dire” monetary state of affairs when it agreed to surrender management of its New York enterprise and, notably, its medical hashish license – certainly one of solely 10 lively licenses to develop and promote marijuana within the state.
“Apparently, after receiving badly wanted funds from (Ascend Wellness) and asking state regulators to approve the transaction, MedMen has had a change of coronary heart,” the submitting stated.
MedMen has since bounced back, and its footprint in New York has gained vital worth with the state’s subsequent legalization of hashish for leisure use and expansion of its medical program.
The Ascend Wellness criticism additionally accused MedMen New York of improperly jeopardizing its belongings whereas the deal was nonetheless pending, together with paying a $500,000 dividend to its father or mother firm. The criticism additionally alleges that MedMen is placing its New York subsidiary in peril of being partially taken over by non-public lender Hankey Capital, as collateral for an as-yet unpaid mortgage.
MedMen representatives have declined to touch upon the lawsuit or the standing of their settlement with Ascend Wellness. Their final public assertion on the deal, dated Jan. 3, “introduced its termination.”
In a letter filed as an exhibit within the case, MedMen’s Serruya instructed Ascend Wellness representatives that conditional approval for the deal granted by the Hashish Management Board on Dec. 16 “didn’t fulfill the circumstances” of the businesses’ settlement.
Nevertheless, the Workplace of Hashish Administration had notified attorneys for each corporations by e mail previous to the top of the 12 months that their deal may undergo.
MedMen has been mum on its future plans for New York since Jan. 3. But it surely has continued to construct on its footprint in different states, asserting an growth of its model portfolio in California.
As a result of federal prohibition of marijuana, even multistate hashish operators are required to promote merchandise within the state the place they’re grown, main to produce chains which are extra self-contained than these of comparable industries.
A protracted court docket case between MedMen and Ascend Wellness has the potential to have an effect on the restricted provide of medical-grade, legally grown hashish in New York, simply as regulators contemplate releasing rules and license functions for the state’s nascent adult-use business.
