LOS ANGELES – MedMen Enterprises Inc. (‘MedMen’ or the ‘Company’) (CSE: MMEN) (OTCQX: MMNFF), a premier U.S. cannabis retailer, 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