Tilray Acquires Majority Position In Amended MedMen Convertible Notes, Accelerating Path Into US Cannabis Market If Federal Legalization Occurs

Tilray, Inc. TLRY, and MedMen Enterprises Inc. MMEN MMNFF, announced on Tuesday Tilray has acquired the majority of MedMen’s outstanding senior secured convertible notes that were originally held by certain funds affiliated with Gotham Green Partners, LLC (GGP) and others.

What’s In It For Tilray? For starters, the investment provides Tilray with a potential accelerated path into the U.S. cannabis market upon federal legalization via a significant equity position in MedMen through conversion of the notes and the ability to exercise associated warrants.

Many believe federal cannabis legalization could happen sooner rather than later and Tilray’s chairman and CEO Irwin D. Simon is among them.

Indeed, Irwin has told Benzinga on various occasions that he is extremely positive about legalization and reiterated his optimism.

"Backed by accelerating trends towards legalization globally, we are focused on building the world's leading cannabis-focused consumer branded company with a goal of $4 billion of revenue by the end of our fiscal 2024,” Simon said. “The investment we are announcing in MedMen securities today, one of the most recognized brands in the $80 billion U.S. cannabis market, is a critical step towards delivering on our objective as we work to enable Tilray to lead the U.S. market when legalization allows."

In connection with the sale of these Notes, MedMen and GGP amended the restrictive covenants and extended the debt maturity to 2028 to provide MedMen the flexibility to execute on its growth priorities and explore additional strategic opportunities.

Tom Lynch, MedMen’s chairman and CEO seems equally delighted.

"Our management team has spent the past 18 months executing a disciplined turnaround plan. We are grateful to our stakeholders for their patience and support as we worked to fix the business and rebuild trust and credibility,” Lynch said. “We believe that patience has paid off, as these efforts have succeeded in attracting partners who share our vision for building the world’s most powerful cannabis retail brand.”

Separately, MedMen also announced a significant equity investment from a private placement of MedMen shares and warrants to a group of investors.