Tilray Acquires Majority Position in Amended MedMen Convertible Notes
Summary
Irwin D. Simon, Tilray’s Chairman and CEO, said, “Backed by accelerating trends towards legalization globally, we are focused on building the worlds leading cannabis-focused consumer branded company with a goal of $4 billion of revenue by the end of our fiscal 2024. 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.” Mr. Simon continued, “Our ability to maximize value from this game-changing transaction rests on the support of our shareholders at the upcoming Special Meeting to vote on our Authorized Shares Proposal, which will increase the number of authorized shares Tilray has available to not only complete this transaction, but also to execute on other strategic acquisitions. In addition, the proceeds from the private placement and amendments to the Notes, gives MedMen the cash and flexibility to match our revenue trajectory to our operational expertise and internationally renowned brand. Tilray’s and the SPV’s determination may be driven by market conditions, future strategic planning, the business and prospects of the MedMen and any other factors that Tilray or the SPV, as applicable, may consider relevant from time to time. The Amendment and Restatement, including the issuance of the top-up right and the pre-emptive right, are considered to be "related party transactions" under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”) insofar as they involve GGP and Parallax Master Fund LP. Such factors include, without limitation: (i) if, when and to the extent cannabis is legalized at the federal level in the United States; (ii) the ability of either company to effectively grow and expand retail operations in the United States; (iii) ability to effectively deal with the restrictions, limitations and health issues presented by the COVID-19 pandemic; (iv) the respective management teams’ perceptions of historical trends, current conditions and expected future developments; (v) the ability to effectively manage growth, including anticipated and unanticipated costs; (vi) achieving the anticipated results of the Tilray or MedMens strategic plans, including growing market share; (vii) the adequacy of each company’s capital resources and liquidity, including but not limited to, availability of sufficient cash flow to successfully execute their respective growth strategies (either within the expected timeframe or at all); (viii) the ability to raise necessary or desired funds to achieve their respective strategic business plans; (ix) obtaining and maintaining all required licenses, approvals and permits; (x) favorable production levels and sustainable costs; (xi) inputs, suppliers and skilled labor being unavailable or available only at uneconomic costs; (xii); (xiii) adverse future legislative and regulatory developments involving medical and recreational marijuana; (xiv) consumer interest in the companies’ respective products and products of other brands that MedMen may offer in its stores; (xv) competition; (xvi) government regulation of either company’s activities and products including, but not limited, to the areas of taxation and environmental protection; (xviii) the risks of operating or investing in the marijuana industry in the United States; (xviii) the outcome of any claims, litigation and proceedings of which either company is a party, including any settlements of litigation or pending regulatory or government investigations or actions or other legal contingencies; (xix) either company’s ability to conduct operations in a safe, efficient and effective manner; (xx) changes in general economic, business and political conditions in which the companies operate, including changes in the financial markets; changes in applicable laws generally and (xxi) and those other risk factors discussed in MedMen’s Form 10 (as amended) or in the risk factors discussed in Tilray’s Annual Report on Form 10-K, and other continuous disclosure filings, all available under either at www.sec.gov (with respect to both MedMen and Tilray) or www.sedar.com (solely with respect to MedMen).