Not only does MedMen’s acquisition of medical cannabis vendor PharmaCann mark the largest marijuana-related takeover in U.S. history, but it underscores how integral retail is to the cannabis market, MedMen CEO Adam Bierman told CNBC.
“Retail is the place to be because of the defensibility due to the zoning restrictions and the limited number of licenses,” Bierman said. “I think retail is the permanent moat opportunity for this industry and that’s where we’ll continue to be focused.”
When the $682 million all-stock takeover of PharmaCann is complete, MedMen will operate 66 licensed retail stores and 13 factories across 12 states, including in the markets on which MedMen is primarily focused: California, Nevada and New York.
Dubbing those the best markets for cannabis in the United States, Bierman said PharmaCann will enable MedMen to fast-track some of its growth in those regions, all of which are integral to building MedMen’s already well-known brand. MedMen’s dispensaries have been fondly dubbed by some as the Apple stores of weed.
“Those are the markets where brands will be built, and as we look into expanding our footprint, the markets PharmaCann is in are the exact markets we were targeting,” the CEO said. “What this allowed us to do was leapfrog that next stage of our growth so we can just hunker down and focus on execution.”
And as MedMen continues to grow its business with a long-term outlook on the nascent cannabis industry, Bierman told Cramer the company had “three buckets” of lasting business drivers it would keep in mind.
“We have the business that we’re building, which is MedMen. We have the industry that we’re building, which is cannabis. And then we have an asset class that we’re building,” Bierman said. “On the asset class, we’re trying to build an asset class in cannabis that’s investable and accessible for retail investors all the way up to big institutions.”
“I think this deal moves the needle significantly in all three of those buckets, so we couldn’t be more excited,” the CEO continued.
According to the press release describing the MedMen-PharmaCann deal, the combined company will be the largest U.S. cannabis company by market reach. MedMen says PharmaCann, which deals largely in medical-only markets, will be additive to MedMen’s recreationally focused business.
Cowen Group estimates that by 2030, the new MedMen’s total addressable market will be roughly $40 billion in the 12 states in which the combined company will operate.
Shares of MedMen hit a new 52-week high in Monday’s trading session, closing up nearly 10 percent at $6.26 a share.