MedMen stock is continuing its strong start to the new year after MedMen Enterprises (CSE:MMEN) (OTCQX:MMNFF) announced the closing of a US$78 million term loan amendment and a US$20 million equity placement.
Loan Amendment
The amendments to the loan, first agreed in October 2018, will see the removal of any penalty against MedMen Enterprises for the early repayment of the amounts outstanding upon 15 days' notice. Additionally, the new warrants issued to the lenders may be exercised at the election of their holders on a cashless basis. MedMen stock is currently up 3.85% following the announcement.
Equity Placement
MedMen also announced the closing of an equity placement first announced on December 27, with 46,962,648 Class B Subordinate Voting Shares having been issued at a price of $0.43 per share for aggregate proceeds of US$20 million. The company intends to use the funds to finance working capital requirements and to execute its retail footprint expansion plans in its core geographic markets. A certain amount of the issued shares are subject to a hold period of four months from the closing date of January 13. MedMen stock is currently trading for $0.81.
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The equity placement is part of a broader financing plan by MedMen to raise up to US$74 million. Under this plan, MedMen Enterprises will sell off its assets in some of its non-core geographic areas, such as Arizona, where the firm recently sold three vertically-integrated licenses, as well as a binding term sheet for the sale of a cultivation and manufacturing license in Illinois. The company's focus will shift to deepening its retail market share in California, Nevada, Florida, Illinois, Massachusetts, and New York.
MedMen stock has gained 15% since the turn of the year after a dismal performance in 2019, which saw it collapse over 80% in less than 12 months and saw investors grow increasingly concerned with the company's financial position. Recent announcements seem to suggest that the company has finally put those fears to bed and looks to be making a solid case for a big year ahead.
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