MedMen Expands Its Presence in Arizona

Acquisition of Vertically-Integrated Operator Adds to MedMen’s Growing Footprint in One of the Top Medical Marijuana Markets in the U.S.

MedMen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF) (FSE: A2JM6N) announced today that it has signed a definitive agreement to acquire control of Kannaboost Technology Inc. and CSI Solutions LLC, collectively referred to as “Level Up,” in a cash and stock transaction valued at $33,000,000. Level Up holds licenses for two vertically-integrated operations in Arizona, which include retail locations in Scottsdale and Tempe, as well as 25,000 square feet of cultivation and production capacity in Tempe and Phoenix. As part of the transaction, the Company will also receive a 40 percent stake in top-selling brand K.I.N.D. Concentrates (“K.I.N.D.”), which is currently distributed in over 90 percent of the dispensaries in Arizona.

“This acquisition strengthens our presence in one of the top cannabis markets in the U.S.,” said Adam Bierman, MedMen chief executive and co-founder. “We will continue to identify highly accretive transactions in core states and remain laser focused on executing our retail playbook.”

Inclusive of Level Up and other pending acquisitions, MedMen’s footprint includes licenses for 69 retail stores and 17 cultivation and production facilities across 12 states.

In Arizona, the Company now controls three premier retail locations, 65,000 square feet in total cultivation and production capacity, and distribution and co-manufacturing rights for several top brands in Arizona, including K.I.N.D., Kiva, Mirth Provisions, HUXTON and Old Pal. The Company also has plans to introduce its [statemade] line of branded products to the Arizona market over the next 12 to 18 months.

“We have worked tremendously hard to build a company that puts the needs of patients in our local communities first,” said Michael Colburn, co-founder of Level Up. “This marks an exciting new chapter for our brands and for the medical marijuana patients who have supported us,” added Daryll DeSantis, Level Up co-founder.

Founded in 2013, Level Up is among the top medical marijuana operators in Arizona. The flagship location in Scottsdale is one of the highest-grossing dispensaries in the state, and will be MedMen’s second dispensary in the city, pending the acquisition of Monarch, which was announced in September 2018. Level Up’s second location recently opened in Tempe.

Transaction Details

As consideration for the transaction, the Company will pay $33.0 million, of which approximately 51.5 percent will be satisfied in cash and 48.5 percent in Class B Subordinate Voting shares (the “Shares”). Level Up is currently on track to surpass $22 million in revenue for calendar year 2018, a 62 percent increase over 2017 revenue. Total revenue includes both retail and wholesale revenue.

For the recently announced acquisitions of operational businesses, which include Monarch in Arizona, Buddy’s Cannabis in California, and Seven Point in Illinois, the Company has deployed $78.8 million in total cash and shares at a blended purchase multiple of 1.8x current year revenue.

The transaction is subject to regulatory approvals by various local and state authorities in each of the markets where Level Up’s assets and licenses are held and other customary closing conditions. The Company expects the transaction to close within 90 days.

ABOUT MEDMEN:

MedMen Enterprises is a leading cannabis company in the U.S. with assets and operations across the country. Based in Los Angeles, MedMen brings expertise and capital to the cannabis industry and is one of the nation’s largest financial supporters of progressive marijuana laws. Visit http://www.medmen.com

ABOUT LEVEL UP:

Level Up provides the cannabis connoisseur with a luxury experience and premium medicine. Level Up is passionate about bringing the finest medical marijuana in a comfortable setting that reflects our dedication to premium quality. The company prides itself on providing the utmost customer service to create an experience rooted in elegance and class. As part of that mission, Level Up’s promise is this: Patients Always. The needs of its patients always dictate its decisions, not profit. Visit http://www.levelupdispensaries.com

ABOUT K.I.N.D. CONCENTRATES:

K.I.N.D. Concentrates manufactures and distributes top quality, award-winning THC and CBD medical marijuana concentrates made from organic, indoor medical cannabis plants. Founded in 2013, K.I.N.D.’s purpose is to be a reliable, high quality provider of the best medical marijuana concentrates and edibles in the state of Arizona. As the first producer of medical marijuana concentrates in Arizona, K.I.N.D. Concentrates’ focus has always been on providing medicine of the highest quality and potency to medical marijuana patients in Arizona. Visit http://www.kindconcentrates.com

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