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MedMen to Withdraw Allegations Against Ascend Wellness in M&A Lawsuit
The forthcoming legal record adjustment is the latest in Ascend’s legal battle with MedMen, which stems from a roughly $73-million definitive investment agreement between the two companies on Feb. 25, 2021. Ascend is a multistate, vertically integrated operator that still wants the deal to go through, with plans to secure one of New York’s 10 medical cannabis licenses.
While Ascend intended to acquire MedMen’s subsidiary operations in New York through the agreement, MedMen backed out of the deal, announcing Jan. 3, 2022, its decision to terminate the arrangement.
RELATED: Ascend Wellness Files Amended Complaint Against MedMen
After Ascend filed a suit in the New York Supreme Court last month, seeking to enforce MedMen’s “contractual obligations,” MedMen responded by filing counterclaims that Ascend exerted political pressure on Gov. Kathy Hochul’s administration to help obtain regulatory approval for the transaction.
Specifically, the counterclaim alleged that one Ascend executive attended a fundraiser for Hochul on Dec. 8, 2021, and that Ascend founder and CEO Abner Kurtin met with the governor’s senior staff on Dec. 10, 2021.
On Dec. 16, 2021, the two companies received approval for their acquisition agreement from the New York Cannabis Control Board via the state’s Office of Cannabis Management, leading to a “highly suspect sequence of events,” according to MedMen.
But MedMen indicated this week it intends to withdraw those claims from the legal record, The Associated Press reported.
In a statement provided to Cannabis Business Times from an Ascend public relations representative, attorney Mylan Denerstein, who is representing Ascend through the Gibson Dunn law firm, said MedMen’s accusations were baseless and debunked.
“After we provided documentary evidence proving MedMen’s assertions were demonstrably wrong, they indicated they will withdraw their false allegations,” Denerstein said. “Like any house of cards, MedMen’s claims collapsed when exposed to the slightest scrutiny. Ascend will continue to correct the record and looks forward to entering New York’s cannabis market once its rights are vindicated in court.”
While court filings did not show MedMen had withdrawn its allegations as of Tuesday morning, according to the AP, MedMen attorney Alex Spiro told the news outlet that the company will amend its filings to remove “very specific allegations that are the subject of the very carefully worded and very limited denials by Ascend and the governor’s office.”
Ascend Wellness officials as well as Denerstein have both said the counterclaims made by MedMen are a result of seller’s remorse