MedMen Enterprises Inc. (“MedMen” or the “Company”) (CSE: MMEN) (OTCQX: MMNFF), a premier U.S. cannabis retailer, today announced that LitHouse Farms, one of the most highly‐awarded cultivators in California, has agreed to manage cultivation and manufacturing at each of the two approximately 45,000 square foot, Dutch greenhouse, cultivation and production facilities that MedMen leases in Desert Hot Springs, California (“DHS”) and Sparks, Nevada (“Sparks”). 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. Licensed operations at the facilities will be carried on under management agreements with subsidiaries of LitHouse, which management agreements include purchase options for nominal consideration, subject to regulatory approval.
Tom Lynch, Chairman and CEO of MedMen, remarked, “The leaders of LitHouse Farms, Kris and Al Harris, are 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. We and the current employees at our DHS and Sparks facilities are thrilled to partner with true cultivation experts.”
Concurrently with the transaction, Foundry Works, Inc., the parent company of LitHouse Farms, has signed a sublease agreement for DHS worth approximately U.S.$3.2 million per year in its first year, ramping to approximately U.S.$4.6 million per year in its sixth year, subject to 3% annual escalators thereafter through March 2039. At Sparks, Foundry Works has signed a sublease agreement worth approximately U.S.$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 announced a merchandising agreement covering California and Nevada reflective of MedMen’s retail focus in both states and the two companies’ shared brand vision. Subject to performing in the top half of SKUs sold at MedMen, Foundry Works will have the right to occupy shelf space in‐line with MedMen’s current top performing brands. It is expected that Foundry Works will use these rights to feature LitHouse Farms, Sherbinksi’s, Sonder and other future Foundry Works owned brands. MedMen and Foundry Works expect to release exclusive products while supporting these products with marketing and advertising content associated with the merchandising agreements. The two companies also have agreed that Foundry Works will supply the product for the Company’s private label MedMen Red product in California and Nevada.
MedMen is a premier American cannabis retailer with an operational footprint in California, Nevada, Illinois, Arizona, Massachusetts, and Florida. MedMen offers a robust selection of high‐quality products, including MedMen‐owned brands MedMen Red and LuxLyte through its premium retail stores, proprietary delivery service, as well as curbside and in‐store pickup. MedMen Buds, an industry‐first loyalty program, provides exclusive access to promotions, product drops and content. MedMen believes that a world where cannabis is legal and regulated is safer, healthier, and happier. Learn more about MedMen at www.medmen.com.