LitHouse Farms to Manage MedMen's California And Nevada-Based Cultivation Facilities

Cannabis retailer MedMen Enterprises Inc. MMEN MMNFF disclosed Friday that LitHouse Farms will oversee operations at the two facilities it leases in Desert Hot Springs, California and Sparks, Nevada.

The Califonia cultivator agreed to manage growing and manufacturing at each of the two approximately 45,000 square foot Dutch greenhouse, cultivation and production facilities, the Los Angeles-based MedMen confirmed.

LitHouse will expand its current California production, enter the Nevada market for the first time and produce flower for MedMen’s private label line MedMen Red.

Under the management agreements, LitHouse’s subsidiaries will carry out Licensed operations at both facilities.

Tom Lynch, chairman and CEO of MedMen said he is thrilled to team up with LitHouse Farms’ leaders, Kris and Al Harris, whom he called “pioneers in craft mixed‐light cannabis cultivation.”

“We believe they have a skill set that will enable them to capture the best elements of sun‐grown terpenes and mixed‐light energy efficiency, and we expect that they will be able to deliver a product with the look and potency of indoor,” Lynch added. “We and the current employees at our DHS and Sparks facilities are thrilled to partner with true cultivation experts.”

Cash Flow Accretive Partnership With Foundry Works

The company also confirmed that Foundry Works, Inc., LitHouse Farms’ parent company inked a sublease agreement for DHS worth approximately $3.2 million on an annual basis in its first year, ramping to roughly $4.6 million per year in its sixth year, subject to 3% yearly escalators thereafter through March 2039.

Moreover, Foundry Works also signed a sublease agreement at Sparks, worth around $2.4 million per year in its first year, ramping to approximately $3.4 million per year in its sixth year, subject to 3% annual escalators thereafter through January 2039.

In addition, MedMen and Foundry Works also entered into a merchandising agreement covering California and Nevada reflective of MedMen’s retail focus in both states and the two companies’ shared brand vision.

Price Action

MedMen’s shares traded 0.50% lower at $0.2800 per share at the time of writing Monday morning.

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