Cover
Cover - shares | 6 Months Ended | |
Dec. 24, 2022 | Jan. 30, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Dec. 24, 2022 | |
Document Transition Report | false | |
Entity File Number | 000-56199 | |
Entity Registrant Name | MEDMEN ENTERPRISES INC. | |
Entity Incorporation, State or Country Code | A1 | |
Entity Tax Identification Number | 98-1431779 | |
Entity Address, Address Line One | 8740 S Sepulveda Blvd | |
Entity Address, Address Line Two | Suite 105 | |
Entity Address, City or Town | Los Angeles | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 90045 | |
City Area Code | (424) | |
Local Phone Number | 330-2082 | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 1,308,619,247 | |
Entity Central Index Key | 0001776932 | |
Current Fiscal Year End Date | --06-30 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Dec. 24, 2022 | Jun. 25, 2022 |
Current Assets: | ||
Cash and Cash Equivalents | $ 15,605,362 | $ 10,795,999 |
Accounts Receivable and Prepaid Expenses | 5,415,701 | 7,539,767 |
Inventory | 13,675,322 | 10,010,731 |
Assets Held for Sale | 43,611,513 | 123,158,751 |
Receivable for Assets Held for Sale | 11,500,000 | 0 |
Other Assets | 10,403,527 | 9,990,992 |
Total Current Assets | 100,211,425 | 161,496,240 |
Operating Lease Right-of-Use Assets | 34,275,701 | 47,649,270 |
Property and Equipment, Net | 57,645,329 | 64,107,792 |
Intangible Assets, Net | 32,653,134 | 35,746,114 |
Goodwill | 9,810,049 | 9,810,049 |
Other Non-Current Assets | 3,879,373 | 4,414,219 |
TOTAL ASSETS | 238,475,011 | 323,223,684 |
Current Liabilities: | ||
Accounts Payable and Accrued Liabilities | 42,926,092 | 38,905,818 |
Income Taxes Payable | 67,472,697 | 58,646,291 |
Other Liabilities | 16,591,825 | 16,704,283 |
Derivative Liabilities | 3,642,777 | 6,749,563 |
Current Portion of Operating Lease Liabilities | 11,897,467 | 10,925,128 |
Current Portion of Finance Lease Liabilities | 4,294,333 | 4,061,273 |
Current Portion of Notes Payable | 66,294,249 | 97,003,922 |
Liabilities Held for Sale | 24,524,988 | 86,595,102 |
Total Current Liabilities | 237,644,428 | 319,591,380 |
Operating Lease Liabilities | 40,724,983 | 50,917,244 |
Finance Lease Liabilities | 27,288,988 | 26,553,287 |
Other Non-Current Liabilities | 2,846,182 | 3,082,277 |
Deferred Tax Liability | 38,459,344 | 35,213,671 |
Senior Secured Convertible Credit Facility | 146,193,049 | 132,005,663 |
Notes Payable | 74,110,205 | 74,372,898 |
TOTAL LIABILITIES | 567,267,179 | 641,736,420 |
SHAREHOLDERS’ EQUITY: | ||
Preferred Shares (no par value, unlimited shares authorized and no shares issued and outstanding) | 0 | 0 |
Subordinate Voting Shares (no par value, unlimited shares authorized, 1,302,129,084 and 1,301,423,950 shares issued and outstanding as of December 24, 2022 and June 25, 2022, respectively) | 0 | 0 |
Additional Paid-In Capital | 1,060,236,631 | 1,057,228,873 |
Accumulated Deficit | (913,798,904) | (901,758,875) |
Total Equity Attributable to Shareholders of MedMen Enterprises Inc. | 146,437,727 | 155,469,998 |
Non-Controlling Interest | (475,229,895) | (473,982,734) |
TOTAL SHAREHOLDERS’ EQUITY | (328,792,168) | (318,512,736) |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ 238,475,011 | $ 323,223,684 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - shares | Dec. 24, 2022 | Jun. 25, 2022 | Dec. 25, 2021 |
Preferred Shares, issued (in shares) | 0 | 0 | |
Preferred Shares, outstanding (in shares) | 0 | 0 | |
Subordinate Voting Shares | |||
Subordinate Voting Shares, issued (in shares) | 1,301,423,950 | 1,302,129,084 | |
Subordinate Voting Shares, outstanding (in shares) | 1,301,423,950 | 1,302,129,084 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 24, 2022 | Dec. 25, 2021 | Dec. 24, 2022 | Dec. 25, 2021 | |
Income Statement [Abstract] | ||||
Revenue | $ 29,554,100 | $ 35,517,161 | $ 59,598,153 | $ 72,253,065 |
Cost of Goods Sold | 14,501,052 | 17,637,003 | 29,601,351 | 36,986,993 |
Gross Profit | 15,053,048 | 17,880,158 | 29,996,802 | 35,266,072 |
Operating Expenses: | ||||
General and Administrative | 18,341,221 | 31,292,754 | 36,452,557 | 63,941,988 |
Sales and Marketing | 551,106 | 1,007,255 | 994,897 | 1,600,479 |
Depreciation and Amortization | 3,477,086 | 6,379,865 | 7,423,606 | 12,203,482 |
Realized and Unrealized Changes in Fair Value of Contingent Consideration | 0 | (301,459) | (863,856) | (301,459) |
Impairment Expense | 5,052,995 | 0 | 6,716,906 | 435,241 |
Other Operating (Income) Expense | (5,634,350) | 630,971 | (7,544,063) | 2,829,999 |
Total Operating Expenses | 21,788,058 | 39,009,386 | 43,180,047 | 80,709,730 |
Loss from Operations | (6,735,010) | (21,129,228) | (13,183,245) | (45,443,658) |
Non-Operating (Income) Expenses: | ||||
Interest Expense | 9,686,929 | 8,077,496 | 19,739,620 | 16,249,257 |
Interest Income | (27,991) | (22,907) | (28,024) | (45,915) |
Accretion of Debt Discount and Loan Origination Fees | 1,543,896 | 1,277,827 | 2,885,912 | 7,625,298 |
Change in Fair Value of Derivatives | (3,912,376) | (14,106,370) | (3,106,786) | (16,211,785) |
Gain on Extinguishment of Debt | 0 | 0 | 0 | (10,233,607) |
Total Non-Operating Expenses | 7,290,458 | (4,773,954) | 19,490,722 | (2,616,752) |
Loss from Continuing Operations Before Provision for Income Taxes | (14,025,468) | (16,355,274) | (32,673,967) | (42,826,906) |
Provision for Income Tax Expense | (1,060,808) | 8,137,898 | (6,752,886) | (11,554,010) |
Net Loss from Continuing Operations | (15,086,276) | (8,217,376) | (39,426,853) | (54,380,916) |
Net Income (Loss) from Discontinued Operations, Net of Taxes | (2,255,978) | (12,140,600) | 26,132,489 | (26,587,091) |
Net Income (Loss) | (17,342,254) | (20,357,976) | (13,294,364) | (80,968,007) |
Net Loss Attributable to Non-Controlling Interest | (1,134,849) | (1,331,174) | (1,247,161) | (6,611,177) |
Net Income (Loss) Attributable to Shareholders of MedMen Enterprises Inc. | $ (16,207,405) | $ (19,026,802) | $ (12,047,203) | $ (74,356,830) |
Earnings (Loss) Per Share - Basic and Diluted: | ||||
From Continuing Operations Attributable to Shareholders of MedMen Enterprises Inc. - Basic (in dollars per share) | $ (0.01) | $ (0.01) | $ (0.03) | $ (0.05) |
From Continuing Operations Attributable to Shareholders of MedMen Enterprises Inc. - Diluted (in dollars per share) | (0.01) | (0.01) | (0.03) | (0.05) |
From Discontinued Operations Attributable to Shareholders of MedMen Enterprises Inc. - Basic (in dollars per share) | 0 | (0.01) | 0.01 | (0.02) |
From Discontinued Operations Attributable to Shareholders of MedMen Enterprises Inc. - Diluted (in dollars per share) | $ 0 | $ (0.01) | $ 0.01 | $ (0.02) |
Weighted-Average Shares Outstanding - Basic (in shares) | 1,301,874,615 | 1,198,515,279 | 1,301,767,158 | 1,070,605,666 |
Weighted-Average Shares Outstanding - Diluted (in shares) | 1,301,874,615 | 1,198,515,279 | 4,845,052,067 | 1,070,605,666 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) | Total | Subordinate Voting Shares | Additional Paid-In Capital | Accumulated Deficit | TOTAL EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF MEDMEN | Non- Controlling Interest |
Beginning balance (in shares) at Jun. 26, 2021 | 726,866,374 | |||||
Beginning balance at Jun. 26, 2021 | $ (253,633,619) | $ 908,992,686 | $ (717,232,706) | $ 191,759,980 | $ (445,393,599) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (Loss) Income | (60,610,031) | (55,330,028) | (55,330,028) | (5,280,003) | ||
Controlling Interest Equity Transactions | ||||||
Redemption of MedMen Corp Redeemable Shares (in shares) | 4,054,278 | |||||
Redemption of MedMen Corp Redeemable Shares | 0 | 1,121,441 | 374,701 | 1,496,142 | (1,496,142) | |
Shares Issued for Cash, Net of Fees (in shares) | 406,249,973 | |||||
Shares Issued for Cash, Net of Fees | 73,393,745 | 73,393,745 | 73,393,745 | |||
Shares Issued to Settle Debt and Accrued Interest (in shares) | 20,833,333 | |||||
Shares Issued to Settle Debt and Accrued Interest | 4,030,000 | 4,030,000 | 4,030,000 | |||
Shares Issued to Settle Accounts Payable and Liabilities, (in shares) | 4,182,730 | |||||
Shares Issued to Settle Accounts Payable and Liabilities | 700,000 | 700,000 | 700,000 | |||
Equity Component of Debt - New and Amended | 41,388,048 | 41,388,048 | 41,388,048 | |||
Shares Issued for Vested Restricted Stock Units and Cashless Exercise of Options (in shares) | 8,473,868 | |||||
Shares Issued for Vested Restricted Stock Units and Cashless Exercise of Options | 0 | |||||
Shares Issued for Exercise of Warrants (in shares) | 8,807,605 | |||||
Shares Issued for Exercise of Warrants | 1,273,679 | 1,273,679 | 1,273,679 | |||
Shares Issued for Conversion of Debt (in shares) | 16,014,665 | |||||
Shares Issued for Conversion of Debt | 2,371,100 | 2,371,100 | 2,371,100 | |||
Stock Grants for Compensation (in shares) | 1,455,415 | |||||
Stock Grants for Compensation | 1,421,400 | 1,421,400 | 1,421,400 | |||
Deferred Tax Impact On Conversion Feature | (13,057,730) | (13,057,730) | (13,057,730) | |||
Share-Based Compensation | 1,682,677 | 1,682,677 | 1,682,677 | |||
Ending balance (in shares) at Sep. 25, 2021 | 1,196,938,241 | |||||
Ending balance at Sep. 25, 2021 | (201,040,731) | $ 0 | 1,023,317,046 | (772,188,033) | 251,129,013 | (452,169,744) |
Beginning balance (in shares) at Jun. 26, 2021 | 726,866,374 | |||||
Beginning balance at Jun. 26, 2021 | (253,633,619) | 908,992,686 | (717,232,706) | 191,759,980 | (445,393,599) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (Loss) Income | (80,968,007) | |||||
Ending balance (in shares) at Dec. 25, 2021 | 1,200,119,292 | |||||
Ending balance at Dec. 25, 2021 | (219,330,021) | $ 0 | 1,025,404,359 | (791,208,000) | 234,196,359 | (453,526,380) |
Beginning balance (in shares) at Sep. 25, 2021 | 1,196,938,241 | |||||
Beginning balance at Sep. 25, 2021 | (201,040,731) | $ 0 | 1,023,317,046 | (772,188,033) | 251,129,013 | (452,169,744) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (Loss) Income | (20,357,976) | (19,026,802) | (19,026,802) | (1,331,174) | ||
Controlling Interest Equity Transactions | ||||||
Redemption of MedMen Corp Redeemable Shares (in shares) | 84,605 | |||||
Redemption of MedMen Corp Redeemable Shares | 0 | 18,627 | 6,835 | 25,462 | (25,462) | |
Shares Issued for Cash, Net of Fees | 0 | |||||
Shares Issued to Settle Debt and Accrued Interest | 0 | |||||
Shares Issued to Settle Accounts Payable and Liabilities, (in shares) | 98,118 | |||||
Shares Issued to Settle Accounts Payable and Liabilities | 15,000 | 15,000 | 15,000 | |||
Equity Component of Debt - New and Amended | 0 | |||||
Shares Issued for Vested Restricted Stock Units and Cashless Exercise of Options (in shares) | 2,283,972 | |||||
Shares Issued for Vested Restricted Stock Units and Cashless Exercise of Options | 0 | |||||
Shares Issued for Exercise of Warrants | 0 | |||||
Shares Issued for Conversion of Debt | 0 | |||||
Stock Grants for Compensation (in shares) | 714,356 | |||||
Stock Grants for Compensation | 207,494 | 207,494 | 207,494 | |||
Deferred Tax Impact On Conversion Feature | 1,345,580 | 1,345,580 | 1,345,580 | |||
Share-Based Compensation | 500,612 | 500,612 | 500,612 | |||
Ending balance (in shares) at Dec. 25, 2021 | 1,200,119,292 | |||||
Ending balance at Dec. 25, 2021 | (219,330,021) | $ 0 | 1,025,404,359 | (791,208,000) | 234,196,359 | (453,526,380) |
Beginning balance (in shares) at Jun. 25, 2022 | 1,301,423,950 | |||||
Beginning balance at Jun. 25, 2022 | (318,512,736) | $ 0 | 1,057,228,873 | (901,758,875) | 155,469,998 | (473,982,734) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (Loss) Income | 4,047,901 | 4,160,212 | 4,160,212 | (112,312) | ||
Controlling Interest Equity Transactions | ||||||
Partner Contributions | 37,561 | 37,561 | 37,561 | |||
Redemption of MedMen Corp Redeemable Shares (in shares) | 259,814 | |||||
Redemption of MedMen Corp Redeemable Shares | 0 | 15,318 | (15,318) | |||
Share-Based Compensation | 863,685 | 863,685 | 863,685 | |||
Ending balance (in shares) at Sep. 24, 2022 | 1,301,683,764 | |||||
Ending balance at Sep. 24, 2022 | (313,563,590) | $ 0 | 1,058,107,876 | (897,576,420) | 160,531,456 | (474,095,046) |
Beginning balance (in shares) at Jun. 25, 2022 | 1,301,423,950 | |||||
Beginning balance at Jun. 25, 2022 | (318,512,736) | $ 0 | 1,057,228,873 | (901,758,875) | 155,469,998 | (473,982,734) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (Loss) Income | (13,294,364) | |||||
Ending balance (in shares) at Dec. 24, 2022 | 1,302,129,084 | |||||
Ending balance at Dec. 24, 2022 | (328,792,168) | $ 0 | 1,060,236,631 | (913,798,904) | 146,437,727 | (475,229,895) |
Beginning balance (in shares) at Sep. 24, 2022 | 1,301,683,764 | |||||
Beginning balance at Sep. 24, 2022 | (313,563,590) | $ 0 | 1,058,107,876 | (897,576,420) | 160,531,456 | (474,095,046) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (Loss) Income | (17,342,254) | (16,207,405) | (16,207,405) | (1,134,849) | ||
Controlling Interest Equity Transactions | ||||||
Partner Contributions | 0 | |||||
Redemption of MedMen Corp Redeemable Shares (in shares) | 445,320 | |||||
Redemption of MedMen Corp Redeemable Shares | 0 | 15,079 | (15,079) | |||
Share-Based Compensation | 2,113,676 | 2,113,676 | 2,113,676 | |||
Ending balance (in shares) at Dec. 24, 2022 | 1,302,129,084 | |||||
Ending balance at Dec. 24, 2022 | $ (328,792,168) | $ 0 | $ 1,060,236,631 | $ (913,798,904) | $ 146,437,727 | $ (475,229,895) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Dec. 24, 2022 | Dec. 25, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net Loss from Continuing Operations | $ (39,426,853) | $ (54,380,916) |
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities: | ||
Deferred Tax Expense | 0 | (9,365,019) |
Depreciation and Amortization | 7,471,055 | 13,121,707 |
Non-Cash Operating Lease Costs | 6,200,503 | 8,854,752 |
Accretion of Debt Discount and Loan Origination Fees | 2,885,912 | 7,625,298 |
Loss on Disposals of Assets | 1,358,820 | 0 |
Gain on Lease Terminations | (3,464,947) | 0 |
Accretion of Deferred Gain on Sale of Property | (236,095) | (283,314) |
Impairment of Assets | 6,716,906 | 435,241 |
Realized and Unrealized Changes in Fair Value of Contingent Consideration | 863,856 | 0 |
Change in Fair Value of Derivative Liabilities | (3,106,786) | (16,211,785) |
Gain on Extinguishment of Debt | 0 | (10,233,610) |
Share-Based Compensation | 2,977,361 | 3,812,183 |
Interest Capitalized to Senior Secured Convertible Debt and Notes Payable | 12,319,509 | 13,008,234 |
Interest Capitalized to Finance Lease Liabilities | 969,427 | 777,564 |
Changes in Operating Assets and Liabilities: | ||
Accounts Receivable and Prepaid Expenses | 5,057,758 | (1,830,219) |
Inventory | (3,664,591) | (3,139,817) |
Other Current Assets | (412,535) | 321,953 |
Other Assets | 534,846 | 479,019 |
Accounts Payable and Accrued Liabilities | 7,659,848 | 3,218,996 |
Interest Payments on Finance Leases | (3,639,574) | (3,510,293) |
Cash Payments - Operating Lease Liabilities | (1,501,594) | (5,777,739) |
Income Taxes Payable | 12,072,079 | 17,776,242 |
Other Current Liabilities | (976,314) | (1,282,468) |
NET CASH PROVIDED BY (USED IN) CONTINUED OPERATING ACTIVITIES | 10,658,591 | (36,583,991) |
Net Cash Used in Discontinued Operating Activities | (18,992,355) | (13,314,891) |
NET CASH USED IN OPERATING ACTIVITIES | (8,333,764) | (49,898,882) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of Property and Equipment | (5,974,346) | (3,974,462) |
Additions to Intangible Assets | (30,999) | (486,759) |
Proceeds from the Sale of Assets Held for Sale | 51,500,000 | 0 |
NET CASH PROVIDED BY (USED IN) CONTINUED INVESTING ACTIVITIES | 45,494,655 | (4,461,221) |
Net Cash Used in Discontinued Investing Activities | 0 | (3,107,056) |
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | 45,494,655 | (7,568,277) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Issuance of Subordinate Voting Shares for Cash | 0 | 95,000,000 |
Payment of Stock Issuance Costs Relating to Private Placement | 0 | (5,352,505) |
Exercise of Warrants for Cash | 0 | 1,273,679 |
Payment of Debt Issuance Costs Relating to Senior Secured Convertible Credit Facility | 0 | (2,608,964) |
Proceeds from Issuance of Notes Payable | 0 | 5,000,000 |
Principal Repayments of Notes Payable | (32,388,433) | (152,887) |
Principal Repayments of Finance Lease Liability | (666) | (959) |
Distributions - Non-Controlling Interest | 37,561 | 0 |
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES | (32,351,538) | 93,158,364 |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 4,809,353 | 35,691,206 |
Cash Included in Assets Held for Sale | 0 | (275,178) |
Cash and Cash Equivalents, Beginning of Period | 10,795,999 | 11,575,868 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 15,605,352 | 46,991,896 |
SUPPLEMENTAL DISCLOSURE FOR CASH FLOW INFORMATION | ||
Cash Paid for Interest | 5,078,605 | 1,940,280 |
Non-Cash Investing and Financing Activities: | ||
Net Assets Transferred to Held for Sale | 0 | 4,476,993 |
Redemption of MedMen Corp Redeemable Shares | 705,134 | 1,521,604 |
Derivative Liability Incurred on Convertible Facility and Equity Financing | 805,590 | 30,500,000 |
Conversion of Convertible Debentures | 0 | 2,371,100 |
Shares Issued to Settle Debt and Lender Fees | 0 | 4,030,000 |
Shares Issued to Settle Accounts Payable and Liabilities | 0 | 715,000 |
Equity Component of Debt - New and Amended | 0 | 41,388,047 |
Deferred Tax Impact on Conversion Feature | $ 0 | $ 11,712,150 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 6 Months Ended |
Dec. 24, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS | 1. NATURE OF OPERATIONS MedMen Enterprises Inc. and its subsidiaries over which the company has control (collectively, “MedMen”, the “Company”, “we” or “us”) is a premier cannabis retailer based in the U.S. with an operational footprint in California, Nevada, Illinois, Arizona, Massachusetts, and New York. MedMen offers a robust selection of high-quality products, including MedMen-owned brands – MedMen Red and LuxLyte – through its premium retail stores, proprietary delivery service, as well as curbside and in-store pick up. MedMen Buds provides exclusive access to promotions, product drops and content. As of December 24, 2022, the Company operates 23 store locations across California (13), Nevada (3), Illinois (1), Arizona (1), Massachusetts (1), and New York (4). The Company continues to market its assets in New York and thus classifies all assets and liabilities and profit or loss allocable to its operations in the state of New York as discontinued operations. In August 2022, the Company completed the sale of its operations in the state of Florida of which all assets and liabilities and profit or loss allocable to Florida were classified as discontinued operations until the day of sale, on August 22, 2022. Subsequent to August 22, 2022, the remaining post-acquisition assets and liabilities, which is primarily comprised of a current receivable for the portion of the sales proceeds due to us in March 2023, and profit or loss allocable to Florida have been reclassified as continuing operations. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Dec. 24, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Preparation The accompanying Condensed Consolidated Financial Statements have been prepared on a going concern basis in accordance with generally accepted accounting principles in the United States of America (“GAAP”), which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business, and in accordance with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for interim financial information. The Condensed Consolidated Financial Statements include the accounts of MedMen Enterprises, its subsidiaries and variable interest entities (“VIEs”) where the Company is considered the primary beneficiary, if any, after elimination of intercompany accounts and transactions. Investments in entities in which the Company has significant influence, but less than a controlling financial interest, are accounted for using the equity method. In the opinion of management, all adjustments considered necessary for a fair presentation of the consolidated financial position of the Company as of and for the interim periods presented have been included. The accompanying Condensed Consolidated Financial Statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from uncertainty related to our ability to continue as a going concern. The accompanying Condensed Consolidated Financial Statements do not include all of the information required for full annual financial statements. Accordingly, certain information, footnotes and disclosures normally included in the annual financial statements have been condensed or omitted in accordance with SEC rules for interim financial information. The financial data presented herein should be read in conjunction with the audited Consolidated Financial Statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended June 25, 2022, as filed with the Securities and Exchange Commission on September 9, 2022 (the “2022 Form 10-K”). Going Concern As of December 24, 2022, the Company had cash and cash equivalents of $15,605,362 and working capital deficit of $137,433,003. The Company has incurred net losses from continuing operations of $15,086,276 and $39,426,853 for the three and six months ended December 24, 2022, respectively. The conditions described above raise substantial doubt with respect to the Company’s ability to meet its obligations for at least one year from the issuance of these Condensed Consolidated Financial Statements, and therefore, to continue as a going concern. The Company plans to continue to fund its operations through the implementation and expansion of its cost savings plan, and various strategic actions, including the successful negotiations of lower costs of occupancy with its master lease landlord and other landlords, divestiture of non-core assets including but not limited to the current asset group held for sale, New York, as well continuing its on-going revenue and vendor strategy of market expansion and retail revenue and gross margin growth. The Company also needs to obtain an extension or a refinancing of its debt-in-default with the secured senior lender. The annual operating plan for fiscal year 2023 estimates the Company will be able to manage ongoing operations. However, its cash needs are significant and not achievable with the current cash flow from operations. If the above strategic actions, for any reason, are inaccessible, it will have a significantly negative effect on the Company’s financial condition. Additionally, management expects to continue to manage the Company’s operating expenses and reduce its projected cash requirements through reduction of its expenses by delaying new store development, permanently or temporarily closing stores that are deemed to be performing below expectations, and/or implementing other restructuring activities. Furthermore, COVID-19 and the impact the global pandemic on the broader retail environment could also have a significant impact on the Company’s financial position, results of operations, equity and or its access to capital and future financing. COVID-19 In response to the COVID-19 pandemic, governmental authorities have enacted and implemented various recommendations and safety measures in an attempt to limit the spread and magnitude of the pandemic. The Company is continuously addressing the effects of the COVID-19 pandemic, a discussion of which is available in Item 1A “ Risk Factors ” of the 2022 Form 10-K. The company’s operating results continue to be impacted by the COVID-19 pandemic. The overall impact on our business continues to depend on the length of time that the pandemic continues, the impact on consumer purchasing behavior, macro-economic factors such as inflation, and the extent to which it affects our ability to raise capital, and the effect of governmental regulations imposed in response to the pandemic, which all remain uncertain at this time. The Company will continue to implement and evaluate actions to strengthen our financial position and support the continuity of our business and operations. Basis of Consolidation Subsidiaries are entities controlled by the Company. Control exists when the Company either has a controlling voting interest or is the primary beneficiary of a variable interest entity. The financial statements of subsidiaries are included in the Consolidated Financial Statements from the date that control commences until the date that control ceases. With the exception of MME Florida, LLC, which the Company disposed on August 22, 2022, the list of the Company’s subsidiaries included in the Company’s 2022 Form 10-K remain complete as of December 24, 2022. Significant Accounting Policies The significant accounting policies and critical estimates applied by the Company in these Condensed Consolidated Financial Statements are the same as those applied in the Company’s audited Consolidated Financial Statements and accompanying notes included in the Company’s 2022 Form 10-K, unless otherwise disclosed in these accompanying notes to the Condensed Consolidated Financial Statements for the interim period ended December 24, 2022. Earnings (Loss) per Share The Company calculates basic loss per share by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is determined by adjusting profit or loss attributable to common shareholders and the weighted-average number of common shares outstanding, for the effects of all dilutive potential common shares, which comprise convertible debentures, restricted stock units, warrants and stock options issued. Reclassifications Certain amounts reported in the Condensed Consolidated Financial Statements as of June 25, 2022 have non-material corrections and reclassified in order to conform to the current reporting period presentation. In the Note related to Property and Equipment, the Company reclassified $940,000 to increase leasehold improvements and decrease furniture and fixtures. In the Note related to Intangibles, the Company reclassified $1,440,000 and $964,000 to decrease customer relationships and management agreements, along with the related accumulated amortization. In the Condensed Consolidated Balance Sheet, the Company reclassified $3,662,000 between non-controlling interest and accumulated deficit. In addition, the Company reclassified $6,825,000 to decrease its short-term operating lease liabilities and increase its long-term operating lease liabilities. There was no change to total current assets, total assets, total liabilities, total shareholders’ equity or cash flows as a result of these reclassifications and non-material corrections. Recently Adopted Accounting Standards In May 2021, the FASB issued Accounting Standards Update (“ASU”) 2021-04, “ Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) ” (“ASU 2021-04”), which amends existing guidance for earnings per share (“EPS”) in accordance with Topic 260. ASU 2021-04 is effective prospectively for fiscal years beginning after December 15, 2021. The Company adopted ASU 2021-04 on June 26, 2022. The adoption of the standard did not have a material impact on the Company’s Condensed Consolidated Financial Statements. Recently Issued Accounting Standards In March 2020, the FASB issued ASU 2020-04, “ Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ” (“ASU 2020-04”), provides optional expedients and exceptions for applying GAAP to debt instruments, derivatives, and other contracts that reference London Interbank Offered Rate (“LIBOR”) or other reference rates expected to be discontinued as a result of reference rate reform. This guidance is optional and may be elected through December 31, 2022 using a prospective application on all eligible contract modifications. ASU 2020-04 provides optional expedients and exceptions for applying GAAP to instruments affected by reference rate reform if certain criteria are met. The Company did not modify any material contracts due to reference rate reform during the nine months ended September 30, 2022. The Company is currently evaluating the adoption date and impact, if any, adoption will have on its financial position and results of operations. In September 2022, the FASB issued ASU 2022-04, “ Liabilities – Supplier Finance Programs (Subtopic 405-50) ” (“ASU 2022-04”), which is intended to enhance transparency with supplier finance programs. ASU 2022-04 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Adoption is applied on a retrospective approach. The Company is currently evaluating the adoption date and impact, if any, adoption will have on its financial position and results of operations. |
INVENTORY
INVENTORY | 6 Months Ended |
Dec. 24, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORY | 3. INVENTORY The following table provides a summary of total Inventory as of December 24, 2022 and June 25, 2022: December 24, June 25, Raw Materials $ 736,389 $ 521,777 Work-in-Process 956,705 671,541 Finished Goods 11,982,228 8,817,413 Total Inventory $ 13,675,322 $ 10,010,731 During the six months ended December 24, 2022 and December 25, 2021, the Company recognized impairment of nil and $900,000 respectively, to write down inventory to its net realizable value. The Company did not recognize any impairment of inventory during the three months ended December 24, 2022 and December 25, 2021. |
ASSETS HELD FOR SALE
ASSETS HELD FOR SALE | 6 Months Ended |
Dec. 24, 2022 | |
Assets Held For Sale | |
ASSETS HELD FOR SALE | 4. ASSETS HELD FOR SALE A reconciliation of our assets held for sale is as follows: Discontinued Operations & Other Assets Balance as of June 25, 2022 $ 123,158,751 Ongoing Activities (12,547,238) Proceeds from Sale (1) (67,000,000) Balance as of December 24, 2022 43,611,513 _____________________________________ (1) See “Note 22 – Discontinued Operations” for further information. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 6 Months Ended |
Dec. 24, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | 5. PROPERTY AND EQUIPMENT. As of December 24, 2022 and June 25, 2022, property and equipment consists of the following: December 24, June 25, Land and Buildings $ 29,933,999 $ 29,933,999 Capital Leases 5,318,516 5,315,625 Furniture and Fixtures 8,651,132 8,776,994 Leasehold Improvements 33,625,888 33,069,524 Equipment and Software 15,972,636 16,897,649 Construction in Progress 4,169,772 6,828,923 Total Property and Equipment 97,671,943 100,822,714 Less Accumulated Depreciation (40,026,614) (36,714,922) Property and Equipment, Net $ 57,645,329 $ 64,107,792 Depreciation expense related to continuing operations for three months ended December 24, 2022 and December 25, 2021 was $3,499,585 and $6,864,790, respectively. Depreciation expense related to continuing operations for six months ended December 24, 2022 and December 25, 2021 was $7,471,055 and $13,121,707, respectively. The amount of depreciation recognized for capital leases during the three months ended December 24, 2022 and December 25, 2021 was $267,312. The amount of depreciation recognized for capital leases during the six months ended December 24, 2022 and December 25, 2021 was $534,624. see “Note 9 – Leases” for further information. Borrowing costs were not capitalized as there were no active construction projects in progress during the three and six months ended December 24, 2022. During the three and six months ended December 25, 2021, borrowing costs totaling $375,241 were capitalized using an average capitalization rate of 11.95%. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 6 Months Ended |
Dec. 24, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | 6. INTANGIBLE ASSETS As of December 24, 2022 and June 25, 2022, intangible assets consist of the following: December 24, June 25, Dispensary Licenses $ 40,814,762 $ 49,253,452 Customer Relationships 16,409,600 16,409,600 Capitalized Software 7,413,470 7,413,470 Intellectual Property 12,455,287 4,016,597 Total Intangible Assets $ 77,093,119 $ 77,093,119 Dispensary Licenses $ (18,084,368) $ (16,876,912) Customer Relationships (15,378,567) (15,870,284) Capitalized Software (4,824,287) (4,413,974) Intellectual Property (6,152,763) (4,185,835) Less Accumulated Amortization (44,439,985) (41,347,005) Intangible Assets, Net $ 32,653,134 $ 35,746,114 The Company recorded amortization expense related to continuing operations for the three months ended December 24, 2022 and December 25, 2021 of $1,410,858 and $3,206,091, respectively and amortization expense related to continuing operations for the six months ended December 24, 2022 and December 25, 2021 of $3,123,979 and $6,431,928, respectively. |
ACCOUNTS PAYABLE AND ACCRUED LI
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | 6 Months Ended |
Dec. 24, 2022 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | 7. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES As of December 24, 2022 and June 25, 2022, accounts payable and accrued liabilities consist of the following: December 24, June 25, Accounts Payable $ 19,663,409 $ 14,627,746 Accrued Liabilities 9,862,983 9,464,567 Accrued Inventory 6,397,508 5,868,831 Accrued Payroll 1,405,253 1,682,517 Local & State Taxes Payable 5,030,310 6,695,532 Deferred Gain on Sale of Assets 566,627 566,627 Total Accounts Payable and Accrued Liabilities $ 42,926,090 $ 38,905,820 |
DERIVATIVE LIABILITIES
DERIVATIVE LIABILITIES | 6 Months Ended |
Dec. 24, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE LIABILITIES | 8. DERIVATIVE LIABILITIES A reconciliation of the beginning and ending balance of derivative liabilities and change in fair value of derivative liabilities for the three and six months ended December 24, 2022 is as follows: TOTAL Balance as of June 25, 2022 $ 6,749,563 Change in Fair Value of Derivative Liabilities (3,106,786) Balance as of December 24, 2022 $ 3,642,777 On August 17, 2021, in connection with the amended and restated senior secured convertible credit facility (the Sixth Amendment”), the Company provided the note holders top-up and preemptive rights which were bifurcated from the related notes and classified as a derivative due to the variability of the number and price of shares issuable under these rights. See “ Note 11 – Senior Secured Convertible Credit Facility” for further information. The fair value of the top-up provision in connection with Sixth Amendment of the Convertible Facility was determined using the Black-Scholes simulation model based on Level 3 inputs on the fair value hierarchy. The following assumptions were used at December 24, 2022: Top-Up Average Stock Price $ 0.02 Weighted-Average Probability 50.00 % Term (in Years) 5 Expected Stock Price Volatility 121.15 % The following are the warrants issued related to the equity financing transactions that were accounted for as derivative liabilities: Number of Exercise Expiration March 2021 Private Placement (1) 50,000,000 $0.50 March 27, 2024 50,000,000 _____________________________________ (1) See “Note 12 – Shareholders’ Equity” for further information. The fair value of the March 2021 private placement warrants was measured based on Level 3 inputs on the fair value hierarchy using the Black-Scholes Option pricing model using the following variables: Expected Stock Price Volatility 161.95% Risk-Free Annual Interest Rate 2.35% Expected Life (in Years) 0.25 Share Price $0.02 Exercise Price $0.37 |
LEASES
LEASES | 6 Months Ended |
Dec. 24, 2022 | |
Leases [Abstract] | |
LEASES | 9. LEASES The Company has various operating and finance leases for land, buildings, equipment and other assets that are used for corporate purposes as well as for the production and sale of cannabis products. These leases are subject to covenants and restrictions standard to the industry in which the Company operates. The below are the details of the lease cost and other disclosures regarding the Company’s leases for the three months ended December 24, 2022 and June 25, 2022: Three Months Ended Six Months Ended December 24, December 25, December 24, December 25, Finance Lease Cost: Amortization of Finance Lease Right-of-Use Assets $ 267,312 $ 251,221 $ 534,624 $ 534,627 Interest on Lease Liabilities 1,835,068 1,725,752 3,639,574 3,510,293 Operating Lease Cost 2,746,638 4,412,675 6,200,503 8,854,752 Total Lease Expenses $ 4,849,018 $ 6,389,648 $ 10,374,701 $ 12,899,672 Sublease Income (1) $ (1,521,651) $ (1,444,234) $ (3,043,302) $ (1,444,234) Cash Paid for Amounts Included in the Measurement of Lease Liabilities: Financing Cash Flows from Finance Leases $ (1,818) $ — $ 666 $ 959 Operating Cash Flows from Operating Leases $ 474,802 $ 2,298,848 $ 1,501,594 $ 5,777,739 _____________________________________ (1) See “Note 16 – Other Operating Income” for further information. The weighted-average remaining lease term and discount rate related to the Company’s finance and operating lease liabilities as of December 24, 2022 and June 25, 2022, is as follows: December 24, June 25, Weighted-Average Remaining Lease Term (Years) - Finance Leases 46 46 Weighted-Average Remaining Lease Term (Years) - Operating Leases 7 8 Weighted-Average Discount Rate - Finance Leases 24.81 % 24.33 % Weighted-Average Discount Rate - Operating Leases 16.66 % 18.70 % Future lease payments under non-cancellable operating leases and finance leases as of December 24, 2022 are as follows: Fiscal Year Ending Operating Finance July 1, 2023 (remaining) $ 4,692,026 $ 2,934,524 June 29, 2024 12,931,089 10,961,495 June 28, 2025 9,311,213 7,087,736 June 27, 2026 9,495,658 7,300,368 June 26, 2027 9,466,730 7,519,379 Thereafter 26,267,466 1,061,283,374 Total Lease Payments 72,164,182 1,097,086,876 Less Interest (19,541,732) (1,065,503,555) Lease Liability Recognized $ 52,622,450 $ 31,583,321 The Company entered into a management agreement (the “Management Agreement”) with a third party to operate its cultivation facilities in California and Nevada (the “Cultivation Facilities”). On September 30, 2021, the landlord approved the third party to operate the leased facilities which effectuated the Management Agreement. The Management Agreement provides the third party an option to acquire all the assets used in the Cultivation Facilities, including the cannabis licenses and equipment, for $1 (the “Purchase Option”). The fee for the services under the Management Agreement is 100% and 30% of the California and Nevada Cultivation Facilities net revenue, respectively. The term of the Management Agreement remains in effect until the earlier of (a) the closing of any sale pursuant to the Purchase Option and (b) the expiration of the term, as applicable, of the master lease, at which time this Management Agreement shall automatically terminate without any further action of the Parties. As of December 24, 2022, the Management Agreement remains in effect as neither termination condition has occurred. During the three and six months ended December 24, 2022, the Company recorded sublease income under the Management Agreement. See “ Note 16 – Other Operating Income ” for further information. |
LEASES | 9. LEASES The Company has various operating and finance leases for land, buildings, equipment and other assets that are used for corporate purposes as well as for the production and sale of cannabis products. These leases are subject to covenants and restrictions standard to the industry in which the Company operates. The below are the details of the lease cost and other disclosures regarding the Company’s leases for the three months ended December 24, 2022 and June 25, 2022: Three Months Ended Six Months Ended December 24, December 25, December 24, December 25, Finance Lease Cost: Amortization of Finance Lease Right-of-Use Assets $ 267,312 $ 251,221 $ 534,624 $ 534,627 Interest on Lease Liabilities 1,835,068 1,725,752 3,639,574 3,510,293 Operating Lease Cost 2,746,638 4,412,675 6,200,503 8,854,752 Total Lease Expenses $ 4,849,018 $ 6,389,648 $ 10,374,701 $ 12,899,672 Sublease Income (1) $ (1,521,651) $ (1,444,234) $ (3,043,302) $ (1,444,234) Cash Paid for Amounts Included in the Measurement of Lease Liabilities: Financing Cash Flows from Finance Leases $ (1,818) $ — $ 666 $ 959 Operating Cash Flows from Operating Leases $ 474,802 $ 2,298,848 $ 1,501,594 $ 5,777,739 _____________________________________ (1) See “Note 16 – Other Operating Income” for further information. The weighted-average remaining lease term and discount rate related to the Company’s finance and operating lease liabilities as of December 24, 2022 and June 25, 2022, is as follows: December 24, June 25, Weighted-Average Remaining Lease Term (Years) - Finance Leases 46 46 Weighted-Average Remaining Lease Term (Years) - Operating Leases 7 8 Weighted-Average Discount Rate - Finance Leases 24.81 % 24.33 % Weighted-Average Discount Rate - Operating Leases 16.66 % 18.70 % Future lease payments under non-cancellable operating leases and finance leases as of December 24, 2022 are as follows: Fiscal Year Ending Operating Finance July 1, 2023 (remaining) $ 4,692,026 $ 2,934,524 June 29, 2024 12,931,089 10,961,495 June 28, 2025 9,311,213 7,087,736 June 27, 2026 9,495,658 7,300,368 June 26, 2027 9,466,730 7,519,379 Thereafter 26,267,466 1,061,283,374 Total Lease Payments 72,164,182 1,097,086,876 Less Interest (19,541,732) (1,065,503,555) Lease Liability Recognized $ 52,622,450 $ 31,583,321 The Company entered into a management agreement (the “Management Agreement”) with a third party to operate its cultivation facilities in California and Nevada (the “Cultivation Facilities”). On September 30, 2021, the landlord approved the third party to operate the leased facilities which effectuated the Management Agreement. The Management Agreement provides the third party an option to acquire all the assets used in the Cultivation Facilities, including the cannabis licenses and equipment, for $1 (the “Purchase Option”). The fee for the services under the Management Agreement is 100% and 30% of the California and Nevada Cultivation Facilities net revenue, respectively. The term of the Management Agreement remains in effect until the earlier of (a) the closing of any sale pursuant to the Purchase Option and (b) the expiration of the term, as applicable, of the master lease, at which time this Management Agreement shall automatically terminate without any further action of the Parties. As of December 24, 2022, the Management Agreement remains in effect as neither termination condition has occurred. During the three and six months ended December 24, 2022, the Company recorded sublease income under the Management Agreement. See “ Note 16 – Other Operating Income ” for further information. |
NOTES PAYABLE
NOTES PAYABLE | 6 Months Ended |
Dec. 24, 2022 | |
Notes Payable [Abstract] | |
NOTES PAYABLE | 10. NOTES PAYABLE Refer to the 2022 Form 10-K for complete disclosure of current terms of notes payable included in the footnotes of the annual financial statements as of June 25, 2022. There were no amendments during the six months ended December 24, 2022 As of December 24, 2022 and June 25, 2022, notes payable consist of the following: December 24, June 25, Financing liability incurred on various dates between January 2019 through September 2019 with implied interest rates ranging from 0.7% to 17.0% per annum. $ 72,300,000 $ 72,300,000 Non-revolving, senior secured term notes dated between October 1, 2018 and October 30, 2020, issued to accredited investors, which mature on August 1, 2022 and July 31, 2022, and bear interest at a rate of 15.5% and 18.0% per annum. 66,169,035 97,162,001 Promissory notes dated November 7, 2018, issued to Lessor for tenant improvements as part of sales and leaseback transactions, which mature on November 7, 2028, bear interest at a rate of 10% per annum and require minimum monthly payments of $15,660 and $18,471. 2,057,207 2,057,207 Other 15,691 15,691 Total Notes Payable 140,541,933 171,534,899 Less Unamortized Debt Issuance Costs and Loan Origination Fees (137,478) (158,079) Net Amount 140,404,455 171,376,820 Less Current Portion of Notes Payable (66,294,249) (97,003,922) Notes Payable, Net of Current Portion $ 74,110,206 $ 74,372,898 A reconciliation of the beginning and ending balances of notes payable for the six months ended December 24, 2022 is as follows: December 24, Balance at Beginning of Period $ 171,376,820 Paid-In-Kind Interest Capitalized 1,257,988 Cash Payments (32,388,433) Accretion of Debt Discount (239,953) Accretion of Debt Discount Included in Discontinued Operations 398,032 Balance at End of Period $ 140,404,454 Less Current Portion of Notes Payable $ (66,294,249) Notes Payable, Net of Current Portion $ 74,110,205 Non-Revolving Senior Secured Term Loan Facility In February 2022, the Company executed the Sixth Modification extending the maturity date of the senior secured term loan facility (the “Facility”) with Hankey Capital and Stable Road Capital (the “Lenders”) to July 31, 2022 with respect to the Facility, and August 1, 2022 with respect to the incremental term loans (collectively, the “Term Loans”). The Sixth Modification required that the Company make a mandatory prepayment of at least $37,500,000 in the event the sale of certain assets and imposed covenants in regard to strategic actions the Company would have to implement if unable to pay the Term Loans by the extended stated maturity date. During the six months ended December 24, 2022, in connection with the sale of the Company’s Florida-based operations, the Company made a principal repayment of $31,600,000 with proceeds from the sale. An additional $ 8,500,000 principal repayment will be made in 2023 upon receipt of the final installment payment from the sale of the Company’s Florida-based operations. The Facility and Term Loans remain in default as of December 24, 2022 as the principal balance matured on July 31, 2022 and August 1, 2022, respectively. Beginning in December 2022, the interest assessed on the Facility and Term Loans include a default interest rate of 5%. As of December 24, 2022, the Company is in ongoing discussions with the Lenders. 11. SENIOR SECURED CONVERTIBLE CREDIT FACILITY Refer to the 2022 Form 10-K for complete disclosure of current terms of the senior secured convertible facility included in the footnotes of the annual financial statements as of June 25, 2022. There were no amendments during the three months ended December 24, 2022. As of December 24, 2022 and June 25, 2022, senior secured convertible credit facility consists of the following: Tranche December 24, June 25, 2022 Senior secured convertible notes dated August 17, 2019, issued to accredited investors, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. 1A $ 23,944,485 $ 22,880,556 Senior secured convertible notes dated May 22, 2019, issued to accredited investors, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. 1B 103,124,572 98,542,422 Senior secured convertible notes dated July 12, 2019, issued to accredited investors, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. 2 33,534,018 32,043,996 Senior secured convertible notes dated November 27, 2019, issued to accredited investors, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. 3 12,985,058 12,408,091 Senior secured convertible notes dated March 27, 2020, issued to accredited investors, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. 4 15,273,641 14,594,985 Amendment fee converted to senior secured convertible notes dated October 29, 2019, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. — 24,512,781 23,424,438 Senior secured convertible notes dated April 24, 2020, issued to accredited investors, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. IA-1 3,428,182 3,275,857 Senior secured convertible notes dated September 14, 2020, issued to accredited investors, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. IA-2 6,629,552 6,334,980 Restatement fee issued in senior secured convertible notes dated March 27, 2020, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. — 10,348,746 9,888,919 Second restatement fee issued in senior secured convertible notes dated July 2, 2020, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. — 2,292,231 2,190,380 Third restatement fee issued in senior secured convertible notes dated January 11, 2021, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. — 12,893,031 12,320,154 Total Drawn on Senior Secured Convertible Credit Facility 248,966,298 237,904,778 Less Unamortized Debt Discount (102,773,249) (105,899,115) Senior Secured Convertible Credit Facility, Net $ 146,193,049 $ 132,005,663 A reconciliation of the beginning and ending balances of senior secured convertible credit facility for the six months ended December 24, 2022 is as follows: Tranche 1 Tranche 2 Tranche 3 Tranche 4 Incremental Advance Incremental Advance 3rd Advance Amendment Restatement Fee Notes 2nd Restatement Fee TOTAL Balance as of June 25, 2022 $ 80,178,586 $ — $ 21,218,356 $ — $ 8,217,079 $ — $ 1,051,827 $ — $ 224,585 $ — $ 433,598 $ — $ 842,981 $ — $ 15,512,409 $ 2,211,711 $ 2,114,531 $ — $ 132,005,663 $ — Paid-In-Kind Interest Capitalized 5,646,079 1,490,022 576,967 678,656 152,325 294,572 572,878 1,088,344 459,827 101,851 11,061,521 Accretion of Debt Discount 1,954,788 514,561 199,249 — — — — 376,148 73,578 7,541 3,125,865 Balance as of December 24, 2022 $ 87,779,453 $ 23,222,939 $ 8,993,295 $ 1,730,483 $ 376,910 $ 728,170 $ 1,415,859 $ 16,976,901 $ 2,745,116 $ — $ 2,223,923 $ 146,193,049 |
SENIOR SECURED CONVERTIBLE CRED
SENIOR SECURED CONVERTIBLE CREDIT FACILITY | 6 Months Ended |
Dec. 24, 2022 | |
Debt Disclosure [Abstract] | |
SENIOR SECURED CONVERTIBLE CREDIT FACILITY | 10. NOTES PAYABLE Refer to the 2022 Form 10-K for complete disclosure of current terms of notes payable included in the footnotes of the annual financial statements as of June 25, 2022. There were no amendments during the six months ended December 24, 2022 As of December 24, 2022 and June 25, 2022, notes payable consist of the following: December 24, June 25, Financing liability incurred on various dates between January 2019 through September 2019 with implied interest rates ranging from 0.7% to 17.0% per annum. $ 72,300,000 $ 72,300,000 Non-revolving, senior secured term notes dated between October 1, 2018 and October 30, 2020, issued to accredited investors, which mature on August 1, 2022 and July 31, 2022, and bear interest at a rate of 15.5% and 18.0% per annum. 66,169,035 97,162,001 Promissory notes dated November 7, 2018, issued to Lessor for tenant improvements as part of sales and leaseback transactions, which mature on November 7, 2028, bear interest at a rate of 10% per annum and require minimum monthly payments of $15,660 and $18,471. 2,057,207 2,057,207 Other 15,691 15,691 Total Notes Payable 140,541,933 171,534,899 Less Unamortized Debt Issuance Costs and Loan Origination Fees (137,478) (158,079) Net Amount 140,404,455 171,376,820 Less Current Portion of Notes Payable (66,294,249) (97,003,922) Notes Payable, Net of Current Portion $ 74,110,206 $ 74,372,898 A reconciliation of the beginning and ending balances of notes payable for the six months ended December 24, 2022 is as follows: December 24, Balance at Beginning of Period $ 171,376,820 Paid-In-Kind Interest Capitalized 1,257,988 Cash Payments (32,388,433) Accretion of Debt Discount (239,953) Accretion of Debt Discount Included in Discontinued Operations 398,032 Balance at End of Period $ 140,404,454 Less Current Portion of Notes Payable $ (66,294,249) Notes Payable, Net of Current Portion $ 74,110,205 Non-Revolving Senior Secured Term Loan Facility In February 2022, the Company executed the Sixth Modification extending the maturity date of the senior secured term loan facility (the “Facility”) with Hankey Capital and Stable Road Capital (the “Lenders”) to July 31, 2022 with respect to the Facility, and August 1, 2022 with respect to the incremental term loans (collectively, the “Term Loans”). The Sixth Modification required that the Company make a mandatory prepayment of at least $37,500,000 in the event the sale of certain assets and imposed covenants in regard to strategic actions the Company would have to implement if unable to pay the Term Loans by the extended stated maturity date. During the six months ended December 24, 2022, in connection with the sale of the Company’s Florida-based operations, the Company made a principal repayment of $31,600,000 with proceeds from the sale. An additional $ 8,500,000 principal repayment will be made in 2023 upon receipt of the final installment payment from the sale of the Company’s Florida-based operations. The Facility and Term Loans remain in default as of December 24, 2022 as the principal balance matured on July 31, 2022 and August 1, 2022, respectively. Beginning in December 2022, the interest assessed on the Facility and Term Loans include a default interest rate of 5%. As of December 24, 2022, the Company is in ongoing discussions with the Lenders. 11. SENIOR SECURED CONVERTIBLE CREDIT FACILITY Refer to the 2022 Form 10-K for complete disclosure of current terms of the senior secured convertible facility included in the footnotes of the annual financial statements as of June 25, 2022. There were no amendments during the three months ended December 24, 2022. As of December 24, 2022 and June 25, 2022, senior secured convertible credit facility consists of the following: Tranche December 24, June 25, 2022 Senior secured convertible notes dated August 17, 2019, issued to accredited investors, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. 1A $ 23,944,485 $ 22,880,556 Senior secured convertible notes dated May 22, 2019, issued to accredited investors, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. 1B 103,124,572 98,542,422 Senior secured convertible notes dated July 12, 2019, issued to accredited investors, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. 2 33,534,018 32,043,996 Senior secured convertible notes dated November 27, 2019, issued to accredited investors, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. 3 12,985,058 12,408,091 Senior secured convertible notes dated March 27, 2020, issued to accredited investors, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. 4 15,273,641 14,594,985 Amendment fee converted to senior secured convertible notes dated October 29, 2019, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. — 24,512,781 23,424,438 Senior secured convertible notes dated April 24, 2020, issued to accredited investors, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. IA-1 3,428,182 3,275,857 Senior secured convertible notes dated September 14, 2020, issued to accredited investors, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. IA-2 6,629,552 6,334,980 Restatement fee issued in senior secured convertible notes dated March 27, 2020, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. — 10,348,746 9,888,919 Second restatement fee issued in senior secured convertible notes dated July 2, 2020, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. — 2,292,231 2,190,380 Third restatement fee issued in senior secured convertible notes dated January 11, 2021, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. — 12,893,031 12,320,154 Total Drawn on Senior Secured Convertible Credit Facility 248,966,298 237,904,778 Less Unamortized Debt Discount (102,773,249) (105,899,115) Senior Secured Convertible Credit Facility, Net $ 146,193,049 $ 132,005,663 A reconciliation of the beginning and ending balances of senior secured convertible credit facility for the six months ended December 24, 2022 is as follows: Tranche 1 Tranche 2 Tranche 3 Tranche 4 Incremental Advance Incremental Advance 3rd Advance Amendment Restatement Fee Notes 2nd Restatement Fee TOTAL Balance as of June 25, 2022 $ 80,178,586 $ — $ 21,218,356 $ — $ 8,217,079 $ — $ 1,051,827 $ — $ 224,585 $ — $ 433,598 $ — $ 842,981 $ — $ 15,512,409 $ 2,211,711 $ 2,114,531 $ — $ 132,005,663 $ — Paid-In-Kind Interest Capitalized 5,646,079 1,490,022 576,967 678,656 152,325 294,572 572,878 1,088,344 459,827 101,851 11,061,521 Accretion of Debt Discount 1,954,788 514,561 199,249 — — — — 376,148 73,578 7,541 3,125,865 Balance as of December 24, 2022 $ 87,779,453 $ 23,222,939 $ 8,993,295 $ 1,730,483 $ 376,910 $ 728,170 $ 1,415,859 $ 16,976,901 $ 2,745,116 $ — $ 2,223,923 $ 146,193,049 |
SHAREHOLDERS_ EQUITY
SHAREHOLDERS’ EQUITY | 6 Months Ended |
Dec. 24, 2022 | |
Equity [Abstract] | |
SHAREHOLDERS’ EQUITY | 12. SHAREHOLDERS’ EQUITY Issued and Outstanding A reconciliation of the beginning and ending issued and outstanding shares is as follows: Subordinate MM CAN USA MM Enterprises USA Balance as of June 25, 2022 1,301,423,950 65,066,106 725,016 Redemption of MedMen Corp Redeemable Shares 259,814 (259,814) — Balance as of September 24, 2022 1,301,683,764 64,806,292 725,016 Redemption of MedMen Corp Redeemable Shares 445,320 (445,320) — Balance as of December 24, 2022 1,302,129,084 64,360,972 725,016 Non-Controlling Interests Non-controlling interest represents the net assets of the subsidiaries that the holders of the Subordinate Voting Shares do not directly own. The net assets of the non-controlling interest are represented by the holders of MM CAN USA Redeemable Shares and the holders of MM Enterprises USA Common Units. Non-controlling interest also represents the net assets of the entities the Company does not directly own but controls through a management agreement. As of December 24, 2022 and June 25, 2022, the holders of the MM CAN USA Redeemable Shares represent approximately 4.71% and 4.76%, respectively, of the Company and holders of the MM Enterprises USA Common Units represent approximately 0.05% of the Company. Variable Interest Entities The below information are entities the Company has concluded to be variable interest entities (“VIEs”) as the Company possesses the power to direct activities through management services agreements (“MSAs”). Through these MSAs, the Company can significantly impact the VIEs and thus holds a controlling financial interest. The following table represents the summarized financial information about the Company’s consolidated VIEs. VIEs include the balances of Venice Caregiver Foundation, Inc., LAX Fund II Group, LLC, and Natures Cure, Inc. This information represents amounts before intercompany eliminations. As of and for the six months ended December 24, 2022, the balances and activities attributable to the VIEs consist of the following: Venice Caregivers LAX Fund II Group, LLC Natures Cure, Inc. TOTAL Current Assets $ 1,471,651 $ — $ 27,171,414 $ 28,643,065 Non-Current Assets 8,482,483 3,011,882 4,874,353 16,368,718 Total Assets $ 9,954,134 $ 3,011,882 $ 32,045,767 $ 45,011,783 Current Liabilities $ 10,984,598 $ 16,687,993 $ 10,031,350 $ 37,703,941 Non-Current Liabilities 6,957,566 1,922,553 1,342,632 10,222,751 Total Liabilities $ 17,942,164 $ 18,610,546 $ 11,373,982 $ 47,926,692 Non-Controlling Interest $ (7,988,030) $ (15,598,664) $ 20,671,785 $ (2,914,909) Revenues $ 3,766,847 $ — $ 6,562,185 $ 10,329,032 Net (Loss) Income Attributable to Non-Controlling Interest $ (944,589) $ (1,622,510) $ 1,917,227 $ (649,872) As of and for the fiscal year ended June 25, 2022, the balances of the VIEs consists of the following: Venice Caregivers LAX Fund II Group, LLC Natures Cure, Inc. TOTAL Current Assets $ 1,735,304 $ 1,067,636 $ 23,557,168 $ 26,360,108 Non-Current Assets 10,073,880 3,379,412 4,973,459 18,426,751 Total Assets $ 11,809,184 $ — $ 4,447,048 $ — $ 28,530,627 $ 44,786,859 Current Liabilities $ 9,238,460 $ 16,238,249 $ 8,433,436 $ 33,910,145 Non-Current Liabilities 9,614,164 2,184,953 1,342,633 13,141,750 Total Liabilities $ 18,852,624 $ — $ 18,423,202 $ — $ 9,776,069 $ 47,051,895 Non-Controlling Interest $ (7,043,440) $ — $ (13,976,154) $ — $ 18,754,558 $ — $ (2,265,036) Revenues $ 4,815,688 $ — $ 8,816,113 $ 13,631,801 Net (Loss) Income Attributable to Non-Controlling Interest $ (607,858) $ (2,206,450) $ 3,911,125 $ 1,096,817 The net change in the consolidated VIEs and other non-controlling interest are as follows for the six months ended December 24, 2022: Venice Caregivers LAX Fund II Group, LLC Natures Cure, Inc. Other Non- Controlling TOTAL Balance as of June 25, 2022 $ (7,043,440) $ (13,976,154) $ 18,754,558 $ (471,717,698) $ (473,982,734) Net (Loss) Income $ (944,589) $ (1,622,510) $ 1,917,227 $ (597,289) $ (1,247,161) Balance as of December 24, 2022 $ (7,988,029) $ (15,598,664) $ 20,671,785 $ (472,314,987) $ (475,229,895) |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 6 Months Ended |
Dec. 24, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | 13. SHARE-BASED COMPENSATION The Company has a stock and equity incentive plan (the “Incentive Plan”) under which the Company may issue various types of equity instruments to any employee, officer, consultant, advisor or director. The types of equity instruments issuable under the Incentive Plan encompass, among other things, stock options, stock grants, and restricted stock units (together, “Awards”). Stock based compensation expenses are recorded as a component of general and administrative expenses. The maximum number of Awards that may be issued under the Incentive Plan shall be determined by the Compensation Committee or the Board of Directors in the absence of a Compensation Committee. Any shares subject to an Award under the Incentive Plan that are forfeited, cancelled, expire unexercised, are settled in cash or are used or withheld to satisfy tax withholding obligations, shall again be available for Awards under the Incentive Plan. Vesting of Awards will be determined by the Compensation Committee or Board of Directors in absence of a Compensation Committee. The exercise price for Awards (if applicable) will generally not be less than the fair market value of the Award at the time of grant and will generally expire after 5 or 10 years. A summary of share-based compensation expense for the three and six months ended December 24, 2022 and December 25, 2021 is as follows: Three Months Ended Six Months Ended December 24, December 25, December 24, December 25, Stock Options $ 1,912,792 $ 97,746 $ 2,625,581 $ 1,314,193 Stock Grants for Compensation — 207,494 — 540,827 Restricted Stock Grants 200,884 402,866 351,780 1,957,163 Total Share-Based Compensation $ 2,113,676 $ 708,106 $ 2,977,361 $ 3,812,183 Stock Options A reconciliation of the beginning and ending balance of stock options outstanding is as follows: Number of Weighted-Average Outstanding at June 25, 2022 8,649,673 $ 1.35 Granted 92,382,965 0.05 Forfeited (312,032) 3.60 Outstanding at December 24, 2022 100,720,606 $ 0.15 Stock Options Exercisable as of December 24, 2022 8,037,095 Long-Term Incentive Plan (“LTIP”) Units and LLC Redeemable Units A reconciliation of the beginning and ending balances of the LTIP Units and LLC Redeemable Units issued for compensation outstanding is as follows: LTIP Units LLC Weighted Issued and Balance as of June 25, 2022 and December 24, 2022 19,323,878 725,016 $ 0.52 Restricted Stock Units A reconciliation of the beginning and ending balance of restricted stock units outstanding is as follows: Issued and Vested Weighted-Average Balance as of June 25, 2022 10,998,483 4,030,460 $ 0.20 Granted — — — Vested — 490,661 0.21 Forfeited (1) (1,813,408) — (0.22) Non-vested at December 24, 2022 9,185,075 4,521,121 $ 0.30 _____________________________________ (1) Restricted stock units represent units forfeited upon resignation of certain employees prior to their vesting. Warrants A reconciliation of the beginning and ending balance of warrants outstanding is as follows: Number of Warrants Outstanding Subordinate MM CAN USA TOTAL Weighted-Average Balance as of June 25, 2022 352,704,355 97,430,456 450,134,811 $ 0.25 Expired (6,023,696) — (6,023,696) $ 2.03 Balance as of December 24, 2022 346,680,659 97,430,456 444,111,115 $ 0.22 |
LOSS PER SHARE
LOSS PER SHARE | 6 Months Ended |
Dec. 24, 2022 | |
Earnings Per Share [Abstract] | |
LOSS PER SHARE | 14. LOSS PER SHARE The following is a reconciliation for the calculation of basic and diluted loss per share for the three and six months ended December 24, 2022 and December 25, 2021 is as follows: Three Months Ended Six Months Ended December 24, December 25, December 24, December 25, Net Loss from Continuing Operations Attributable to Shareholders of MedMen Enterprises, Inc. $ (15,086) $ (8,217) $ (39,427) $ (54,381) Net Income (Loss) from Discontinued Operations (2,256) (12,141) 26,132 (26,587) Total Loss $ (17,342) $ (20,358) $ (13,294) $ (80,968) Denominator: Weighted-Average Shares Outstanding - Basic 1,301,874,615 1,198,515,279 1,301,767,158 1,070,605,666 Dilutive effect of LTIP and LLC Redeemable Units issued for compensation 19,323,878 19,323,878 19,323,878 19,323,878 Dilutive effect of restricted stock granted under the Equity Plan 9,185,075 25,673,720 9,185,075 25,673,720 Dilutive effect of warrants and top-up warrants 194,720,261 138,498,284 258,878,685 175,668,177 Dilutive effect of convertible debentures 3,255,897,270 1,007,089,116 3,255,897,270 1,007,089,116 Weighted-Average Shares Outstanding - Diluted (1) 4,781,001,100 2,389,100,278 4,845,052,067 2,298,360,557 |
GENERAL AND ADMINISTRATIVE EXPE
GENERAL AND ADMINISTRATIVE EXPENSES | 6 Months Ended |
Dec. 24, 2022 | |
General And Administrative Expenses | |
GENERAL AND ADMINISTRATIVE EXPENSES | 15. GENERAL AND ADMINISTRATIVE EXPENSES During the three and six months ended December 24, 2022 and December 25, 2021, general and administrative expenses consisted of the following: Three Months Ended Six Months Ended December 24, December 25, December 24, December 25, Salaries and Benefits $ 6,536,411 $ 9,991,545 $ 13,468,859 $ 19,903,033 Professional Fees 2,137,010 7,815,185 3,509,420 15,245,844 Rent 3,021,217 4,712,476 6,649,162 9,467,359 Licenses, Fees and Taxes 1,823,436 1,293,194 3,866,945 3,830,982 Share-Based Compensation 2,113,676 722,802 2,977,361 2,370,111 Deal Costs — 1,174,357 429,272 2,811,944 Other General and Administrative 2,709,471 5,583,195 5,551,538 10,312,715 Total General and Administrative Expenses $ 18,341,221 $ 31,292,754 $ 36,452,557 $ 63,941,988 |
OTHER OPERATING (INCOME) EXPENS
OTHER OPERATING (INCOME) EXPENSE | 6 Months Ended |
Dec. 24, 2022 | |
Other Operating Income Expense | |
OTHER OPERATING (INCOME) EXPENSE | 16. OTHER OPERATING (INCOME) EXPENSE During the three and six months ended December 24, 2022 and December 25, 2021 , other operating (income) expense consisted of the following: Three Months Ended Six Months Ended December 24, December 25, December 24, December 25, Other Operating (Income) Expense: Loss (Gain) on Disposals of Assets $ 1,153,225 $ (141,662) $ 1,358,820 $ (126,516) Restructuring and Reorganization Expense — 385,652 423,793 2,764,327 Gain on Settlement of Accounts Payable 215,659 — 141,022 (177,990) (Gain) Loss on Lease Terminations (1,877,298) 173,765 (3,464,947) 173,765 (Gain) Loss on Disposal of Assets Held for Sale (112,225) — 532,598 — Legal Settlements (3,491,431) — (3,491,431) — Other Income (1,522,280) 213,216 (3,043,918) 196,413 Total Other Operating (Income) Expense $ (5,634,350) $ 630,971 $ (7,544,063) $ 2,829,999 During the three and six months ended December 24, 2022 , the Company recorded $1,521,651 and $3,043,302, respectively of sublease income related to the cultivation facilities in California and Nevada as a component of Other Operating Income in the Consolidated Statements of Operations. |
PROVISION FOR INCOME TAXES AND
PROVISION FOR INCOME TAXES AND DEFERRED INCOME TAXES | 6 Months Ended |
Dec. 24, 2022 | |
Income Tax Disclosure [Abstract] | |
PROVISION FOR INCOME TAXES AND DEFERRED INCOME TAXES | 17. PROVISION FOR INCOME TAXES AND DEFERRED INCOME TAXES The following table summarizes the Company’s income tax expense and effective tax rates for the three and six months ended December 24, 2022 and December 25, 2021 Three Months Ended Six Months Ended December 24, December 25, December 24, December 25, Loss from Continuing Operations Before Provision for Income Taxes $ (14,025,468) $ (16,355,274) $ (32,673,967) $ (42,826,906) Provision for Income Tax Expense (1,060,808) 8,137,898 (6,752,886) (11,554,010) Effective Tax Rate 8 % -50 % 21 % 27 % We have historically calculated the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate (“AETR”) for the full fiscal year to “ordinary” income or loss (pre-tax income or loss excluding unusual or infrequently occurring discrete items) for the reporting period. For the three and six months ended December 25, 2021 , we determined we could no longer reliably estimate income taxes utilizing an AETR. The AETR estimate is highly sensitive to estimates of ordinary income (loss) and permanent differences such that minor fluctuations in these estimates could result in significant fluctuations of the Company’s AETR. Accordingly, we used our actual year-to-date effective tax rate to calculate income taxes for the three and six months ended December 24, 2022 . As the Company operates in the legal cannabis industry, the Company is subject to the limits of IRC Section 280E for U.S. federal, Illinois state, Massachusetts state and New York state income tax purposes under which the Company is only allowed to deduct expenses directly related to sales of product. This results in permanent differences between ordinary and necessary business expenses deemed non-allowable under IRC Section 280E. However, the State of California does not conform to IRC Section 280E and, accordingly, the Company deducts all operating expenses on its California Franchise Tax Returns. The Company has approximately gross $12,230,000 (tax effected $3,240,000) of Canadian non-capital losses and $6,000,000 (tax effected $1,620,000) of share issuance cost 20(1)(e) balance. The loss tax attribute has been determined to be more likely than not that the tax attribute would not yield any tax benefit. As such, the Company has recorded a full valuation allowance against the benefit. Since IRC Section 280E was not applied in the California Franchise Tax Returns, the Company has approximately $22,000,000 of gross California net operating losses which begin expiring in 2033 as of June 25, 2022. The Company has evaluated the realization of its California net operating loss tax attribute and has determined under the more likely than not standard that $217,300,000 will not be realized. The effective tax rate for the three and six months ended December 24, 2022 is different from the three months ended September 25, 2021, respectively, primarily due to the Company’s income and related 280E expenditures. The Company’s non-deductible expenses related to IRC Section 280E limitations have remained relatively consistent. The Company files income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions, and in Canada. The Company is generally subject to audit by taxing authorities in various U.S., state, and in foreign jurisdictions for fiscal years 2014 through the current fiscal year. As of December 24, 2022, the Company had $18,781,424 of unrecognized tax benefits, all of which would reduce income tax expense and the effective tax rate if recognized. During the three and six months ended December 24, 2022, the Company recognized a net discrete tax expense of $407,993 primarily related on interest of past liabilities. During the next twelve months, the Company does not estimate any material reduction in its unrecognized tax benefits. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Dec. 24, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 18. COMMITMENTS AND CONTINGENCIES Contingencies The Company’s operations are subject to a variety of local and state regulations. Failure to comply with one or more of these regulations could result in fines, restrictions on its operations, or losses of permits that could result in the Company ceasing operations. While management of the Company believes that the Company is in compliance with applicable local and state regulations as of December 24, 2022 and June 25, 2022, marijuana regulations continue to evolve and are subject to differing interpretations. As a result, the Company may be subject to regulatory fines, penalties or restrictions in the future. Claims and Litigation From time to time, the Company may be involved in litigation relating to claims arising out of operations in the normal course of business. The Company recognizes legal settlement expense when litigation losses related to pending or threatening lawsuits could be reasonably assessed to have resulted in a probable loss to the Company in an amount that can be reasonably estimated. The Company recognizes legal settlement gains when a favorable settlement is awarded to the Company and payment is received. Gain and losses related to claims and litigation are recorded as a component of Other Operating (Income) Expense in the Condensed Consolidated Financial Statements. As of December 24, 2022, there are also no proceedings in which any of the Company’s current directors, officers or affiliates is an adverse party to the Company or has a material interest adverse to the Company’s interest. In March 2020, litigation was filed against the Company in the Superior Court of Arizona, Maricopa County, related to a purchase agreement for a previous acquisition. The Superior Court of Arizona, Maricopa County granted summary judgement in favor of the Company on all counts in July 2022. The Company is currently in process of recovering certain fees and costs associated with the lawsuit from the plaintiffs, and the plaintiffs have filed an appeal of the summary judgment decision. The Company believes the likelihood of a loss contingency is neither probable nor estimable. As such, no amount has been accrued in these financial statements. In April 2020, a complaint was filed against the Company in Los Angeles Superior Court related to a contemplated acquisition in which the plaintiffs are seeking damages for alleged breach of contract and breach of implied covenant of good faith and fair dealing seeking declaratory relief and specific performance. The Company filed counterclaims including for breach of contract, breach of promissory note, unjust enrichment and declaratory relief. After the end of the quarter ending December 24, 2022, the parties reached a tentative agreement to resolve the litigation; however, the probable loss to the Company cannot be reasonably estimated. As such, no amount has been accrued in these financial statements. In November 2020, entities affiliated with former officers of the Company initiated arbitration against a subsidiary of the Company in Los Angeles, California asserting breach of contract, breach of the implied covenant of good faith and fair dealing, fraud, and unjust enrichment. The claimants are generally seeking damages and compensatory damages according to proof, including lost earnings and other benefits, past and future, interest on lost earnings and benefits, reasonable attorney’s fees, and such other and further relief as the court deems proper. The Company asserted counterclaims, including for breach of the same management agreements. The arbitration hearing has been rescheduled and the matter is being disputed. The litigation remains at an early stage and the likelihood of a loss contingency is remote. As such, no amount has been accrued in these financial statements. In October 2021, a suit for premises liability and negligence seeking unspecified damages for pain and suffering, disability, mental and emotional distress, and loss of earnings was filed against the Company in Los Angeles Superior Court. The matter is in the process of being litigated. The Company believes the likelihood of loss is remote. As such, no amount has been accrued in these financial statements. In July 2022, a complaint was filed in Los Angeles Superior Court by Baker & McKenzie LLP, a former law firm to the Company, seeking in excess of $600,000 in legal fees plus accrued interest. The Company has filed a counterclaim against Baker & McKenzie claiming overbilling on total invoices propounded by the law firm to the Company exceeding $18,500,000. The litigation remains at an early stage and the likelihood of a loss contingency is remote. As such, no amount has been accrued in these financial statements The Company is the defendant in several complaints filed by various of its landlords seeking rents and damages under lease arrangements. First, in 2020 a complaint was filed in Cook County Circuit Court, Illinois against the Company by a landlord claiming the Company had failed to meet its obligations to apply effort to obtain a retail cannabis license at a property, for which the landlord is seeking rents and damages. Plaintiff has filed a motion for summary judgment which remains pending. If the litigation is not settled or resolved, trial will likely take place during the fiscal year ended 2023 or possibly the fiscal year ended 2024. This matter is preliminary and the Company believes the likelihood of loss is remote. As such, no amount has been accrued in these financial statements. Second, in July 2022, a complaint was filed against the Company in the United States District Court for the Southern District of New York by a landlord seeking damages under a lease on real estate located in Illinois. The Company filed an answer to the complaint arguing that the subject matter of the |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Dec. 24, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 19. RELATED PARTY TRANSACTIONS The Company’s Board of Directors each receive quarterly fees of $200,000 of which one-third is paid in cash and two-thirds is paid in Class B Subordinate Voting Shares. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 6 Months Ended |
Dec. 24, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | 20. SEGMENT INFORMATION The Company currently operates in one segment, the production and sale of cannabis products, which is how the Company’s Chief Operating Decision Maker manages the business and makes operating decisions. The Company’s cultivation operations are not considered significant to the overall operations of the Company. Intercompany sales and transactions are eliminated in consolidation. |
REVENUE
REVENUE | 6 Months Ended |
Dec. 24, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | 21. REVENUE While the Company operates in one segment as disclosed in “ Note 20 – Segment Information ”, the Company is disaggregating its revenue by geographical region in accordance with ASC 606, “ Revenue from Contracts with Customers ”. Revenue by state for the periods presented are as follows: Three Months Ended Six Months Ended December 24, December 25, December 24, December 25, California $ 19,575,393 $ 23,368,439 $ 39,504,378 $ 47,994,994 Nevada 2,812,902 3,855,371 5,810,371 7,934,522 Illinois 3,082,089 4,104,970 6,624,159 8,433,572 Arizona 3,343,592 4,173,609 6,138,238 7,875,206 Massachusetts 734,394 14,772 1,515,277 14,771 Revenue from Continuing Operations 29,548,370 35,517,161 59,592,423 72,253,065 Revenue from Discontinued Operations 2,282,288 8,065,341 5,911,927 15,405,440 Total Revenue $ 31,830,658 $ 43,582,502 $ 65,504,350 $ 87,658,505 |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 6 Months Ended |
Dec. 24, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | 22. DISCONTINUED OPERATIONS The operating results of the discontinued operations are summarized as follows: Three Months Ended Six Months Ended December 24, December 25, December 24, December 25, Revenue $ 2,282,288 $ 8,065,341 $ 5,911,927 $ 15,405,440 Cost of Goods Sold 439,466 5,672,043 2,630,135 10,899,596 Gross Profit 1,842,822 2,393,298 3,281,792 4,505,844 Expenses: General and Administrative 2,134,342 6,329,144 6,853,135 11,946,739 Sales and Marketing 15,015 127,844 58,326 231,647 Depreciation and Amortization 21,107 1,189,331 894,002 2,411,090 Impairment Expense — — (78,433) — Gain on Disposal of Assets and Other Income — — (36,305,166) (597,591) Total (Income) Expenses $ 2,170,464 $ 7,646,319 $ (28,578,136) $ 13,991,885 Income (Loss) from Discontinued Operations (327,642) (5,253,021) 31,859,928 (9,486,041) Other Expense: Interest Expense 1,783,685 4,755,126 5,545,446 9,371,955 Accretion of Debt Discount and Loan Origination Fees — 3,446,949 398,032 6,987,857 Total Other Expense 1,783,685 8,202,075 5,943,478 16,359,812 Income (Loss) from Discontinued Operations Before Provision for Income Taxes (2,111,327) (13,455,096) 25,916,450 (25,845,853) Provision for Income Tax Benefit (Expense) (144,651) 1,314,496 216,039 (741,238) Net Income (Loss) from Discontinued Operations $ (2,255,978) $ (12,140,600) $ 26,132,489 $ (26,587,091) The carrying amounts of assets and liabilities in the disposal group are summarized as follows: December 24, June 25, Carrying Amounts of the Assets Included in Discontinued Operations: Cash and Cash Equivalents $ 540,828 $ 1,124,076 Restricted Cash 5,280 5,280 Accounts Receivable and Prepaid Expenses 22,019 334,621 Inventory 4,483,051 6,866,833 TOTAL CURRENT ASSETS (1) Property and Equipment, Net 9,569,610 41,273,597 Operating Lease Right-of-Use Assets 19,111,359 31,543,058 Intangible Assets, Net 10,582,559 40,799,146 Other Assets 458,383 1,181,795 TOTAL ASSETS OF THE DISPOSAL GROUP CLASSIFIED AS HELD FOR SALE 44,773,089 123,128,406 Carrying Amounts of the Liabilities Included in Discontinued Operations: Accounts Payable and Accrued Liabilities $ 979,864 $ 6,295,745 Income Taxes Payable 389,677 1,671,380 Other Current Liabilities (5,641) 89,069 Current Portion of Operating Lease Liabilities 2,812,765 4,209,512 Current Portion of Finance Lease Liabilities — 174,000 TOTAL CURRENT LIABILITIES (1) Operating Lease Liabilities, Net of Current Portion 18,398,345 56,410,071 Deferred Tax Liabilities 5,977,580 6,097,597 Notes Payable — 11,100,000 TOTAL NON-CURRENT LIABILITIES (1) TOTAL LIABILITIES OF THE DISPOSAL GROUP CLASSIFIED AS HELD FOR SALE $ 28,552,590 $ 86,047,374 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Dec. 24, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 23. SUBSEQUENT EVENTS The Company has evaluated subsequent events through the date these Condensed Consolidated Financial Statements were issued and has concluded that no subsequent events have occurred that would require recognition in the Condensed Consolidated Financial Statements or disclosure in the Notes to the Condensed Consolidated Financial Statements. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Dec. 24, 2022 | |
Accounting Policies [Abstract] | |
Basis of Preparation | Basis of Preparation The accompanying Condensed Consolidated Financial Statements have been prepared on a going concern basis in accordance with generally accepted accounting principles in the United States of America (“GAAP”), which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business, and in accordance with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for interim financial information. The Condensed Consolidated Financial Statements include the accounts of MedMen Enterprises, its subsidiaries and variable interest entities (“VIEs”) where the Company is considered the primary beneficiary, if any, after elimination of intercompany accounts and transactions. Investments in entities in which the Company has significant influence, but less than a controlling financial interest, are accounted for using the equity method. In the opinion of management, all adjustments considered necessary for a fair presentation of the consolidated financial position of the Company as of and for the interim periods presented have been included. The accompanying Condensed Consolidated Financial Statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from uncertainty related to our ability to continue as a going concern. |
Going Concern | Going Concern As of December 24, 2022, the Company had cash and cash equivalents of $15,605,362 and working capital deficit of $137,433,003. The Company has incurred net losses from continuing operations of $15,086,276 and $39,426,853 for the three and six months ended December 24, 2022, respectively. The conditions described above raise substantial doubt with respect to the Company’s ability to meet its obligations for at least one year from the issuance of these Condensed Consolidated Financial Statements, and therefore, to continue as a going concern. |
COVID-19 | COVID-19 In response to the COVID-19 pandemic, governmental authorities have enacted and implemented various recommendations and safety measures in an attempt to limit the spread and magnitude of the pandemic. The Company is continuously addressing the effects of the COVID-19 pandemic, a discussion of which is available in Item 1A “ Risk Factors ” of the 2022 Form 10-K. The company’s operating results continue to be impacted by the COVID-19 pandemic. The overall impact on our business continues to depend on the length of time that the pandemic continues, the impact on consumer purchasing behavior, macro-economic factors such as inflation, and the extent to which it affects our ability to raise capital, and the effect of governmental regulations imposed in response to the pandemic, which all remain uncertain at this time. The Company will continue to implement and evaluate actions to strengthen our financial position and support the continuity of our business and operations. |
Basis of Consolidation | Basis of ConsolidationSubsidiaries are entities controlled by the Company. Control exists when the Company either has a controlling voting interest or is the primary beneficiary of a variable interest entity. The financial statements of subsidiaries are included in the Consolidated Financial Statements from the date that control commences until the date that control ceases. With the exception of MME Florida, LLC, which the Company disposed on August 22, 2022, the list of the Company’s subsidiaries included in the Company’s 2022 Form 10-K remain complete as of December 24, 2022. |
Significant Accounting Policies | Significant Accounting Policies The significant accounting policies and critical estimates applied by the Company in these Condensed Consolidated Financial Statements are the same as those applied in the Company’s audited Consolidated Financial Statements and accompanying notes included in the Company’s 2022 Form 10-K, unless otherwise disclosed in these accompanying notes to the Condensed Consolidated Financial Statements for the interim period ended December 24, 2022. |
Earnings (Loss) per Share | Earnings (Loss) per Share The Company calculates basic loss per share by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is determined by adjusting profit or loss attributable to common shareholders and the weighted-average number of common shares outstanding, for the effects of all dilutive potential common shares, which comprise convertible debentures, restricted stock units, warrants and stock options issued. |
Reclassifications | Reclassifications Certain amounts reported in the Condensed Consolidated Financial Statements as of June 25, 2022 have non-material corrections and reclassified in order to conform to the current reporting period presentation. In the Note related to Property and Equipment, the Company reclassified $940,000 to increase leasehold improvements and decrease furniture and fixtures. In the Note related to Intangibles, the Company reclassified $1,440,000 and $964,000 to decrease customer relationships and management agreements, along with the related accumulated amortization. In the Condensed Consolidated Balance Sheet, the Company reclassified $3,662,000 between non-controlling interest and accumulated deficit. In addition, the Company reclassified $6,825,000 to decrease its short-term operating lease liabilities and increase its long-term operating lease liabilities. There was no change to total current assets, total assets, total liabilities, total shareholders’ equity or cash flows as a result of these reclassifications and non-material corrections. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In May 2021, the FASB issued Accounting Standards Update (“ASU”) 2021-04, “ Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) ” (“ASU 2021-04”), which amends existing guidance for earnings per share (“EPS”) in accordance with Topic 260. ASU 2021-04 is effective prospectively for fiscal years beginning after December 15, 2021. The Company adopted ASU 2021-04 on June 26, 2022. The adoption of the standard did not have a material impact on the Company’s Condensed Consolidated Financial Statements. Recently Issued Accounting Standards In March 2020, the FASB issued ASU 2020-04, “ Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ” (“ASU 2020-04”), provides optional expedients and exceptions for applying GAAP to debt instruments, derivatives, and other contracts that reference London Interbank Offered Rate (“LIBOR”) or other reference rates expected to be discontinued as a result of reference rate reform. This guidance is optional and may be elected through December 31, 2022 using a prospective application on all eligible contract modifications. ASU 2020-04 provides optional expedients and exceptions for applying GAAP to instruments affected by reference rate reform if certain criteria are met. The Company did not modify any material contracts due to reference rate reform during the nine months ended September 30, 2022. The Company is currently evaluating the adoption date and impact, if any, adoption will have on its financial position and results of operations. In September 2022, the FASB issued ASU 2022-04, “ Liabilities – Supplier Finance Programs (Subtopic 405-50) ” (“ASU 2022-04”), which is intended to enhance transparency with supplier finance programs. ASU 2022-04 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Adoption is applied on a retrospective approach. The Company is currently evaluating the adoption date and impact, if any, adoption will have on its financial position and results of operations. |
INVENTORY (Tables)
INVENTORY (Tables) | 6 Months Ended |
Dec. 24, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | The following table provides a summary of total Inventory as of December 24, 2022 and June 25, 2022: December 24, June 25, Raw Materials $ 736,389 $ 521,777 Work-in-Process 956,705 671,541 Finished Goods 11,982,228 8,817,413 Total Inventory $ 13,675,322 $ 10,010,731 |
ASSETS HELD FOR SALE (Tables)
ASSETS HELD FOR SALE (Tables) | 6 Months Ended |
Dec. 24, 2022 | |
Assets Held For Sale | |
Schedule of Asset Held for Sale | Discontinued Operations & Other Assets Balance as of June 25, 2022 $ 123,158,751 Ongoing Activities (12,547,238) Proceeds from Sale (1) (67,000,000) Balance as of December 24, 2022 43,611,513 _____________________________________ (1) See “Note 22 – Discontinued Operations” for further information. |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 6 Months Ended |
Dec. 24, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | As of December 24, 2022 and June 25, 2022, property and equipment consists of the following: December 24, June 25, Land and Buildings $ 29,933,999 $ 29,933,999 Capital Leases 5,318,516 5,315,625 Furniture and Fixtures 8,651,132 8,776,994 Leasehold Improvements 33,625,888 33,069,524 Equipment and Software 15,972,636 16,897,649 Construction in Progress 4,169,772 6,828,923 Total Property and Equipment 97,671,943 100,822,714 Less Accumulated Depreciation (40,026,614) (36,714,922) Property and Equipment, Net $ 57,645,329 $ 64,107,792 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Dec. 24, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | As of December 24, 2022 and June 25, 2022, intangible assets consist of the following: December 24, June 25, Dispensary Licenses $ 40,814,762 $ 49,253,452 Customer Relationships 16,409,600 16,409,600 Capitalized Software 7,413,470 7,413,470 Intellectual Property 12,455,287 4,016,597 Total Intangible Assets $ 77,093,119 $ 77,093,119 Dispensary Licenses $ (18,084,368) $ (16,876,912) Customer Relationships (15,378,567) (15,870,284) Capitalized Software (4,824,287) (4,413,974) Intellectual Property (6,152,763) (4,185,835) Less Accumulated Amortization (44,439,985) (41,347,005) Intangible Assets, Net $ 32,653,134 $ 35,746,114 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Tables) | 6 Months Ended |
Dec. 24, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | As of December 24, 2022 and June 25, 2022, accounts payable and accrued liabilities consist of the following: December 24, June 25, Accounts Payable $ 19,663,409 $ 14,627,746 Accrued Liabilities 9,862,983 9,464,567 Accrued Inventory 6,397,508 5,868,831 Accrued Payroll 1,405,253 1,682,517 Local & State Taxes Payable 5,030,310 6,695,532 Deferred Gain on Sale of Assets 566,627 566,627 Total Accounts Payable and Accrued Liabilities $ 42,926,090 $ 38,905,820 |
DERIVATIVE LIABILITIES (Tables)
DERIVATIVE LIABILITIES (Tables) | 6 Months Ended |
Dec. 24, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Liabilities | A reconciliation of the beginning and ending balance of derivative liabilities and change in fair value of derivative liabilities for the three and six months ended December 24, 2022 is as follows: TOTAL Balance as of June 25, 2022 $ 6,749,563 Change in Fair Value of Derivative Liabilities (3,106,786) Balance as of December 24, 2022 $ 3,642,777 |
Schedule of Assumptions to Measure Fair Value | The fair value of the top-up provision in connection with Sixth Amendment of the Convertible Facility was determined using the Black-Scholes simulation model based on Level 3 inputs on the fair value hierarchy. The following assumptions were used at December 24, 2022: Top-Up Average Stock Price $ 0.02 Weighted-Average Probability 50.00 % Term (in Years) 5 Expected Stock Price Volatility 121.15 % |
Schedule of Warrant Issued | The following are the warrants issued related to the equity financing transactions that were accounted for as derivative liabilities: Number of Exercise Expiration March 2021 Private Placement (1) 50,000,000 $0.50 March 27, 2024 50,000,000 _____________________________________ |
Schedule of Assumptions to Measure Fair Value | The fair value of the March 2021 private placement warrants was measured based on Level 3 inputs on the fair value hierarchy using the Black-Scholes Option pricing model using the following variables: Expected Stock Price Volatility 161.95% Risk-Free Annual Interest Rate 2.35% Expected Life (in Years) 0.25 Share Price $0.02 Exercise Price $0.37 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Dec. 24, 2022 | |
Leases [Abstract] | |
Schedule of Lease Cost | The below are the details of the lease cost and other disclosures regarding the Company’s leases for the three months ended December 24, 2022 and June 25, 2022: Three Months Ended Six Months Ended December 24, December 25, December 24, December 25, Finance Lease Cost: Amortization of Finance Lease Right-of-Use Assets $ 267,312 $ 251,221 $ 534,624 $ 534,627 Interest on Lease Liabilities 1,835,068 1,725,752 3,639,574 3,510,293 Operating Lease Cost 2,746,638 4,412,675 6,200,503 8,854,752 Total Lease Expenses $ 4,849,018 $ 6,389,648 $ 10,374,701 $ 12,899,672 Sublease Income (1) $ (1,521,651) $ (1,444,234) $ (3,043,302) $ (1,444,234) Cash Paid for Amounts Included in the Measurement of Lease Liabilities: Financing Cash Flows from Finance Leases $ (1,818) $ — $ 666 $ 959 Operating Cash Flows from Operating Leases $ 474,802 $ 2,298,848 $ 1,501,594 $ 5,777,739 _____________________________________ (1) See “Note 16 – Other Operating Income” for further information. The weighted-average remaining lease term and discount rate related to the Company’s finance and operating lease liabilities as of December 24, 2022 and June 25, 2022, is as follows: December 24, June 25, Weighted-Average Remaining Lease Term (Years) - Finance Leases 46 46 Weighted-Average Remaining Lease Term (Years) - Operating Leases 7 8 Weighted-Average Discount Rate - Finance Leases 24.81 % 24.33 % Weighted-Average Discount Rate - Operating Leases 16.66 % 18.70 % |
Future Lease Payments Under Non-cancellable Operating Leases | Future lease payments under non-cancellable operating leases and finance leases as of December 24, 2022 are as follows: Fiscal Year Ending Operating Finance July 1, 2023 (remaining) $ 4,692,026 $ 2,934,524 June 29, 2024 12,931,089 10,961,495 June 28, 2025 9,311,213 7,087,736 June 27, 2026 9,495,658 7,300,368 June 26, 2027 9,466,730 7,519,379 Thereafter 26,267,466 1,061,283,374 Total Lease Payments 72,164,182 1,097,086,876 Less Interest (19,541,732) (1,065,503,555) Lease Liability Recognized $ 52,622,450 $ 31,583,321 |
Future Lease Payments Under Finance Leases | Future lease payments under non-cancellable operating leases and finance leases as of December 24, 2022 are as follows: Fiscal Year Ending Operating Finance July 1, 2023 (remaining) $ 4,692,026 $ 2,934,524 June 29, 2024 12,931,089 10,961,495 June 28, 2025 9,311,213 7,087,736 June 27, 2026 9,495,658 7,300,368 June 26, 2027 9,466,730 7,519,379 Thereafter 26,267,466 1,061,283,374 Total Lease Payments 72,164,182 1,097,086,876 Less Interest (19,541,732) (1,065,503,555) Lease Liability Recognized $ 52,622,450 $ 31,583,321 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 6 Months Ended |
Dec. 24, 2022 | |
Notes Payable [Abstract] | |
Schedule of Notes Payable | As of December 24, 2022 and June 25, 2022, notes payable consist of the following: December 24, June 25, Financing liability incurred on various dates between January 2019 through September 2019 with implied interest rates ranging from 0.7% to 17.0% per annum. $ 72,300,000 $ 72,300,000 Non-revolving, senior secured term notes dated between October 1, 2018 and October 30, 2020, issued to accredited investors, which mature on August 1, 2022 and July 31, 2022, and bear interest at a rate of 15.5% and 18.0% per annum. 66,169,035 97,162,001 Promissory notes dated November 7, 2018, issued to Lessor for tenant improvements as part of sales and leaseback transactions, which mature on November 7, 2028, bear interest at a rate of 10% per annum and require minimum monthly payments of $15,660 and $18,471. 2,057,207 2,057,207 Other 15,691 15,691 Total Notes Payable 140,541,933 171,534,899 Less Unamortized Debt Issuance Costs and Loan Origination Fees (137,478) (158,079) Net Amount 140,404,455 171,376,820 Less Current Portion of Notes Payable (66,294,249) (97,003,922) Notes Payable, Net of Current Portion $ 74,110,206 $ 74,372,898 |
Schedule of Reconciliation of Notes Payable | A reconciliation of the beginning and ending balances of notes payable for the six months ended December 24, 2022 is as follows: December 24, Balance at Beginning of Period $ 171,376,820 Paid-In-Kind Interest Capitalized 1,257,988 Cash Payments (32,388,433) Accretion of Debt Discount (239,953) Accretion of Debt Discount Included in Discontinued Operations 398,032 Balance at End of Period $ 140,404,454 Less Current Portion of Notes Payable $ (66,294,249) Notes Payable, Net of Current Portion $ 74,110,205 |
SENIOR SECURED CONVERTIBLE CR_2
SENIOR SECURED CONVERTIBLE CREDIT FACILITY (Tables) | 6 Months Ended |
Dec. 24, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Senior Secured Convertible Credit Facility | As of December 24, 2022 and June 25, 2022, senior secured convertible credit facility consists of the following: Tranche December 24, June 25, 2022 Senior secured convertible notes dated August 17, 2019, issued to accredited investors, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. 1A $ 23,944,485 $ 22,880,556 Senior secured convertible notes dated May 22, 2019, issued to accredited investors, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. 1B 103,124,572 98,542,422 Senior secured convertible notes dated July 12, 2019, issued to accredited investors, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. 2 33,534,018 32,043,996 Senior secured convertible notes dated November 27, 2019, issued to accredited investors, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. 3 12,985,058 12,408,091 Senior secured convertible notes dated March 27, 2020, issued to accredited investors, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. 4 15,273,641 14,594,985 Amendment fee converted to senior secured convertible notes dated October 29, 2019, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. — 24,512,781 23,424,438 Senior secured convertible notes dated April 24, 2020, issued to accredited investors, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. IA-1 3,428,182 3,275,857 Senior secured convertible notes dated September 14, 2020, issued to accredited investors, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. IA-2 6,629,552 6,334,980 Restatement fee issued in senior secured convertible notes dated March 27, 2020, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. — 10,348,746 9,888,919 Second restatement fee issued in senior secured convertible notes dated July 2, 2020, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. — 2,292,231 2,190,380 Third restatement fee issued in senior secured convertible notes dated January 11, 2021, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. — 12,893,031 12,320,154 Total Drawn on Senior Secured Convertible Credit Facility 248,966,298 237,904,778 Less Unamortized Debt Discount (102,773,249) (105,899,115) Senior Secured Convertible Credit Facility, Net $ 146,193,049 $ 132,005,663 A reconciliation of the beginning and ending balances of senior secured convertible credit facility for the six months ended December 24, 2022 is as follows: Tranche 1 Tranche 2 Tranche 3 Tranche 4 Incremental Advance Incremental Advance 3rd Advance Amendment Restatement Fee Notes 2nd Restatement Fee TOTAL Balance as of June 25, 2022 $ 80,178,586 $ — $ 21,218,356 $ — $ 8,217,079 $ — $ 1,051,827 $ — $ 224,585 $ — $ 433,598 $ — $ 842,981 $ — $ 15,512,409 $ 2,211,711 $ 2,114,531 $ — $ 132,005,663 $ — Paid-In-Kind Interest Capitalized 5,646,079 1,490,022 576,967 678,656 152,325 294,572 572,878 1,088,344 459,827 101,851 11,061,521 Accretion of Debt Discount 1,954,788 514,561 199,249 — — — — 376,148 73,578 7,541 3,125,865 Balance as of December 24, 2022 $ 87,779,453 $ 23,222,939 $ 8,993,295 $ 1,730,483 $ 376,910 $ 728,170 $ 1,415,859 $ 16,976,901 $ 2,745,116 $ — $ 2,223,923 $ 146,193,049 |
SHAREHOLDERS_ EQUITY (Tables)
SHAREHOLDERS’ EQUITY (Tables) | 6 Months Ended |
Dec. 24, 2022 | |
Equity [Abstract] | |
Schedule of Shares Issued and Outstanding | A reconciliation of the beginning and ending issued and outstanding shares is as follows: Subordinate MM CAN USA MM Enterprises USA Balance as of June 25, 2022 1,301,423,950 65,066,106 725,016 Redemption of MedMen Corp Redeemable Shares 259,814 (259,814) — Balance as of September 24, 2022 1,301,683,764 64,806,292 725,016 Redemption of MedMen Corp Redeemable Shares 445,320 (445,320) — Balance as of December 24, 2022 1,302,129,084 64,360,972 725,016 |
Schedule of VIE | As of and for the six months ended December 24, 2022, the balances and activities attributable to the VIEs consist of the following: Venice Caregivers LAX Fund II Group, LLC Natures Cure, Inc. TOTAL Current Assets $ 1,471,651 $ — $ 27,171,414 $ 28,643,065 Non-Current Assets 8,482,483 3,011,882 4,874,353 16,368,718 Total Assets $ 9,954,134 $ 3,011,882 $ 32,045,767 $ 45,011,783 Current Liabilities $ 10,984,598 $ 16,687,993 $ 10,031,350 $ 37,703,941 Non-Current Liabilities 6,957,566 1,922,553 1,342,632 10,222,751 Total Liabilities $ 17,942,164 $ 18,610,546 $ 11,373,982 $ 47,926,692 Non-Controlling Interest $ (7,988,030) $ (15,598,664) $ 20,671,785 $ (2,914,909) Revenues $ 3,766,847 $ — $ 6,562,185 $ 10,329,032 Net (Loss) Income Attributable to Non-Controlling Interest $ (944,589) $ (1,622,510) $ 1,917,227 $ (649,872) As of and for the fiscal year ended June 25, 2022, the balances of the VIEs consists of the following: Venice Caregivers LAX Fund II Group, LLC Natures Cure, Inc. TOTAL Current Assets $ 1,735,304 $ 1,067,636 $ 23,557,168 $ 26,360,108 Non-Current Assets 10,073,880 3,379,412 4,973,459 18,426,751 Total Assets $ 11,809,184 $ — $ 4,447,048 $ — $ 28,530,627 $ 44,786,859 Current Liabilities $ 9,238,460 $ 16,238,249 $ 8,433,436 $ 33,910,145 Non-Current Liabilities 9,614,164 2,184,953 1,342,633 13,141,750 Total Liabilities $ 18,852,624 $ — $ 18,423,202 $ — $ 9,776,069 $ 47,051,895 Non-Controlling Interest $ (7,043,440) $ — $ (13,976,154) $ — $ 18,754,558 $ — $ (2,265,036) Revenues $ 4,815,688 $ — $ 8,816,113 $ 13,631,801 Net (Loss) Income Attributable to Non-Controlling Interest $ (607,858) $ (2,206,450) $ 3,911,125 $ 1,096,817 |
Schedule of Other Non-controlling Interest | The net change in the consolidated VIEs and other non-controlling interest are as follows for the six months ended December 24, 2022: Venice Caregivers LAX Fund II Group, LLC Natures Cure, Inc. Other Non- Controlling TOTAL Balance as of June 25, 2022 $ (7,043,440) $ (13,976,154) $ 18,754,558 $ (471,717,698) $ (473,982,734) Net (Loss) Income $ (944,589) $ (1,622,510) $ 1,917,227 $ (597,289) $ (1,247,161) Balance as of December 24, 2022 $ (7,988,029) $ (15,598,664) $ 20,671,785 $ (472,314,987) $ (475,229,895) |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 6 Months Ended |
Dec. 24, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Share-based Compensation Expense | A summary of share-based compensation expense for the three and six months ended December 24, 2022 and December 25, 2021 is as follows: Three Months Ended Six Months Ended December 24, December 25, December 24, December 25, Stock Options $ 1,912,792 $ 97,746 $ 2,625,581 $ 1,314,193 Stock Grants for Compensation — 207,494 — 540,827 Restricted Stock Grants 200,884 402,866 351,780 1,957,163 Total Share-Based Compensation $ 2,113,676 $ 708,106 $ 2,977,361 $ 3,812,183 |
Schedule of Stock Options | A reconciliation of the beginning and ending balance of stock options outstanding is as follows: Number of Weighted-Average Outstanding at June 25, 2022 8,649,673 $ 1.35 Granted 92,382,965 0.05 Forfeited (312,032) 3.60 Outstanding at December 24, 2022 100,720,606 $ 0.15 Stock Options Exercisable as of December 24, 2022 8,037,095 |
Schedule of LTIP Units and LLC Redeemable Units | A reconciliation of the beginning and ending balances of the LTIP Units and LLC Redeemable Units issued for compensation outstanding is as follows: LTIP Units LLC Weighted Issued and Balance as of June 25, 2022 and December 24, 2022 19,323,878 725,016 $ 0.52 |
Schedule of Restricted Stock Grants | A reconciliation of the beginning and ending balance of restricted stock units outstanding is as follows: Issued and Vested Weighted-Average Balance as of June 25, 2022 10,998,483 4,030,460 $ 0.20 Granted — — — Vested — 490,661 0.21 Forfeited (1) (1,813,408) — (0.22) Non-vested at December 24, 2022 9,185,075 4,521,121 $ 0.30 _____________________________________ (1) Restricted stock units represent units forfeited upon resignation of certain employees prior to their vesting. |
Schedule of Warrants | A reconciliation of the beginning and ending balance of warrants outstanding is as follows: Number of Warrants Outstanding Subordinate MM CAN USA TOTAL Weighted-Average Balance as of June 25, 2022 352,704,355 97,430,456 450,134,811 $ 0.25 Expired (6,023,696) — (6,023,696) $ 2.03 Balance as of December 24, 2022 346,680,659 97,430,456 444,111,115 $ 0.22 |
LOSS PER SHARE (Tables)
LOSS PER SHARE (Tables) | 6 Months Ended |
Dec. 24, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Loss Per Share | The following is a reconciliation for the calculation of basic and diluted loss per share for the three and six months ended December 24, 2022 and December 25, 2021 is as follows: Three Months Ended Six Months Ended December 24, December 25, December 24, December 25, Net Loss from Continuing Operations Attributable to Shareholders of MedMen Enterprises, Inc. $ (15,086) $ (8,217) $ (39,427) $ (54,381) Net Income (Loss) from Discontinued Operations (2,256) (12,141) 26,132 (26,587) Total Loss $ (17,342) $ (20,358) $ (13,294) $ (80,968) Denominator: Weighted-Average Shares Outstanding - Basic 1,301,874,615 1,198,515,279 1,301,767,158 1,070,605,666 Dilutive effect of LTIP and LLC Redeemable Units issued for compensation 19,323,878 19,323,878 19,323,878 19,323,878 Dilutive effect of restricted stock granted under the Equity Plan 9,185,075 25,673,720 9,185,075 25,673,720 Dilutive effect of warrants and top-up warrants 194,720,261 138,498,284 258,878,685 175,668,177 Dilutive effect of convertible debentures 3,255,897,270 1,007,089,116 3,255,897,270 1,007,089,116 Weighted-Average Shares Outstanding - Diluted (1) 4,781,001,100 2,389,100,278 4,845,052,067 2,298,360,557 |
GENERAL AND ADMINISTRATIVE EX_2
GENERAL AND ADMINISTRATIVE EXPENSES (Tables) | 6 Months Ended |
Dec. 24, 2022 | |
General And Administrative Expenses | |
Schedule of General and Administrative Expenses | During the three and six months ended December 24, 2022 and December 25, 2021, general and administrative expenses consisted of the following: Three Months Ended Six Months Ended December 24, December 25, December 24, December 25, Salaries and Benefits $ 6,536,411 $ 9,991,545 $ 13,468,859 $ 19,903,033 Professional Fees 2,137,010 7,815,185 3,509,420 15,245,844 Rent 3,021,217 4,712,476 6,649,162 9,467,359 Licenses, Fees and Taxes 1,823,436 1,293,194 3,866,945 3,830,982 Share-Based Compensation 2,113,676 722,802 2,977,361 2,370,111 Deal Costs — 1,174,357 429,272 2,811,944 Other General and Administrative 2,709,471 5,583,195 5,551,538 10,312,715 Total General and Administrative Expenses $ 18,341,221 $ 31,292,754 $ 36,452,557 $ 63,941,988 |
OTHER OPERATING (INCOME) EXPE_2
OTHER OPERATING (INCOME) EXPENSE (Tables) | 6 Months Ended |
Dec. 24, 2022 | |
Other Operating Income Expense | |
Schedule of Other Operating Expenses | During the three and six months ended December 24, 2022 and December 25, 2021 , other operating (income) expense consisted of the following: Three Months Ended Six Months Ended December 24, December 25, December 24, December 25, Other Operating (Income) Expense: Loss (Gain) on Disposals of Assets $ 1,153,225 $ (141,662) $ 1,358,820 $ (126,516) Restructuring and Reorganization Expense — 385,652 423,793 2,764,327 Gain on Settlement of Accounts Payable 215,659 — 141,022 (177,990) (Gain) Loss on Lease Terminations (1,877,298) 173,765 (3,464,947) 173,765 (Gain) Loss on Disposal of Assets Held for Sale (112,225) — 532,598 — Legal Settlements (3,491,431) — (3,491,431) — Other Income (1,522,280) 213,216 (3,043,918) 196,413 Total Other Operating (Income) Expense $ (5,634,350) $ 630,971 $ (7,544,063) $ 2,829,999 |
PROVISION FOR INCOME TAXES AN_2
PROVISION FOR INCOME TAXES AND DEFERRED INCOME TAXES (Tables) | 6 Months Ended |
Dec. 24, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Expense and Effective Tax Rates | The following table summarizes the Company’s income tax expense and effective tax rates for the three and six months ended December 24, 2022 and December 25, 2021 Three Months Ended Six Months Ended December 24, December 25, December 24, December 25, Loss from Continuing Operations Before Provision for Income Taxes $ (14,025,468) $ (16,355,274) $ (32,673,967) $ (42,826,906) Provision for Income Tax Expense (1,060,808) 8,137,898 (6,752,886) (11,554,010) Effective Tax Rate 8 % -50 % 21 % 27 % |
REVENUE (Tables)
REVENUE (Tables) | 6 Months Ended |
Dec. 24, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | Revenue by state for the periods presented are as follows: Three Months Ended Six Months Ended December 24, December 25, December 24, December 25, California $ 19,575,393 $ 23,368,439 $ 39,504,378 $ 47,994,994 Nevada 2,812,902 3,855,371 5,810,371 7,934,522 Illinois 3,082,089 4,104,970 6,624,159 8,433,572 Arizona 3,343,592 4,173,609 6,138,238 7,875,206 Massachusetts 734,394 14,772 1,515,277 14,771 Revenue from Continuing Operations 29,548,370 35,517,161 59,592,423 72,253,065 Revenue from Discontinued Operations 2,282,288 8,065,341 5,911,927 15,405,440 Total Revenue $ 31,830,658 $ 43,582,502 $ 65,504,350 $ 87,658,505 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 6 Months Ended |
Dec. 24, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Net Operating Loss of Discontinued Operation | The operating results of the discontinued operations are summarized as follows: Three Months Ended Six Months Ended December 24, December 25, December 24, December 25, Revenue $ 2,282,288 $ 8,065,341 $ 5,911,927 $ 15,405,440 Cost of Goods Sold 439,466 5,672,043 2,630,135 10,899,596 Gross Profit 1,842,822 2,393,298 3,281,792 4,505,844 Expenses: General and Administrative 2,134,342 6,329,144 6,853,135 11,946,739 Sales and Marketing 15,015 127,844 58,326 231,647 Depreciation and Amortization 21,107 1,189,331 894,002 2,411,090 Impairment Expense — — (78,433) — Gain on Disposal of Assets and Other Income — — (36,305,166) (597,591) Total (Income) Expenses $ 2,170,464 $ 7,646,319 $ (28,578,136) $ 13,991,885 Income (Loss) from Discontinued Operations (327,642) (5,253,021) 31,859,928 (9,486,041) Other Expense: Interest Expense 1,783,685 4,755,126 5,545,446 9,371,955 Accretion of Debt Discount and Loan Origination Fees — 3,446,949 398,032 6,987,857 Total Other Expense 1,783,685 8,202,075 5,943,478 16,359,812 Income (Loss) from Discontinued Operations Before Provision for Income Taxes (2,111,327) (13,455,096) 25,916,450 (25,845,853) Provision for Income Tax Benefit (Expense) (144,651) 1,314,496 216,039 (741,238) Net Income (Loss) from Discontinued Operations $ (2,255,978) $ (12,140,600) $ 26,132,489 $ (26,587,091) |
Schedule of Assets Included in Discontinued Operation | The carrying amounts of assets and liabilities in the disposal group are summarized as follows: December 24, June 25, Carrying Amounts of the Assets Included in Discontinued Operations: Cash and Cash Equivalents $ 540,828 $ 1,124,076 Restricted Cash 5,280 5,280 Accounts Receivable and Prepaid Expenses 22,019 334,621 Inventory 4,483,051 6,866,833 TOTAL CURRENT ASSETS (1) Property and Equipment, Net 9,569,610 41,273,597 Operating Lease Right-of-Use Assets 19,111,359 31,543,058 Intangible Assets, Net 10,582,559 40,799,146 Other Assets 458,383 1,181,795 TOTAL ASSETS OF THE DISPOSAL GROUP CLASSIFIED AS HELD FOR SALE 44,773,089 123,128,406 Carrying Amounts of the Liabilities Included in Discontinued Operations: Accounts Payable and Accrued Liabilities $ 979,864 $ 6,295,745 Income Taxes Payable 389,677 1,671,380 Other Current Liabilities (5,641) 89,069 Current Portion of Operating Lease Liabilities 2,812,765 4,209,512 Current Portion of Finance Lease Liabilities — 174,000 TOTAL CURRENT LIABILITIES (1) Operating Lease Liabilities, Net of Current Portion 18,398,345 56,410,071 Deferred Tax Liabilities 5,977,580 6,097,597 Notes Payable — 11,100,000 TOTAL NON-CURRENT LIABILITIES (1) TOTAL LIABILITIES OF THE DISPOSAL GROUP CLASSIFIED AS HELD FOR SALE $ 28,552,590 $ 86,047,374 |
NATURE OF OPERATIONS (Details)
NATURE OF OPERATIONS (Details) | Dec. 24, 2022 store |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of stores | 23 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Jun. 25, 2022 | Dec. 24, 2022 | Dec. 25, 2021 | Dec. 24, 2022 | Dec. 25, 2021 | |
Accounting Policies [Abstract] | |||||
Cash and Cash Equivalents | $ 10,795,999 | $ 15,605,362 | $ 15,605,362 | ||
Net working capital deficit | (137,433,003) | (137,433,003) | |||
Net Loss from Continuing Operations | $ (15,086,276) | $ (8,217,376) | $ (39,426,853) | $ (54,380,916) | |
Reclassifications impacted leasehold improvements and furniture and fixtures | 940,000 | ||||
Reclassifications impacted customer relationships and accumulated amortization | 1,440,000 | ||||
Reclassifications impacted accumulated amortization | 964,000 | ||||
Reclassifications impacted non-controlling interest and accumulated deficit | 3,662,000 | ||||
Reclassifications impacted short-term and long-term operating lease liabilities | $ 6,825,000 |
INVENTORY - Schedule of Invento
INVENTORY - Schedule of Inventories (Details) - USD ($) | Dec. 24, 2022 | Jun. 25, 2022 |
Inventory Disclosure [Abstract] | ||
Raw Materials | $ 736,389 | $ 521,777 |
Work-in-Process | 956,705 | 671,541 |
Finished Goods | 11,982,228 | 8,817,413 |
Total Inventory | $ 13,675,322 | $ 10,010,731 |
INVENTORY - Narrative (Details)
INVENTORY - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 24, 2022 | Dec. 25, 2021 | Dec. 24, 2022 | Dec. 25, 2021 | |
Inventory Disclosure [Abstract] | ||||
Other asset impairment charges | $ 0 | $ 0 | $ 0 | $ 900 |
ASSETS HELD FOR SALE - Schedule
ASSETS HELD FOR SALE - Schedule of Asset Held for Sale (Details) | 6 Months Ended |
Dec. 24, 2022 USD ($) | |
Assets Held-for-sale [Roll Forward] | |
Balance at Beginning of Period | $ 123,158,751 |
Balance at End of Period | 43,611,513 |
Discontinued Operations & Other Assets | |
Assets Held-for-sale [Roll Forward] | |
Balance at Beginning of Period | 123,158,751 |
Ongoing Activities | (12,547,238) |
Proceeds from Sale | (67,000,000) |
Balance at End of Period | $ 43,611,513 |
PROPERTY AND EQUIPMENT - Schedu
PROPERTY AND EQUIPMENT - Schedule of Property and Equipment (Details) - USD ($) | Dec. 24, 2022 | Jun. 25, 2022 |
Property, Plant and Equipment [Abstract] | ||
Land and Buildings | $ 29,933,999 | $ 29,933,999 |
Capital Leases | 5,318,516 | 5,315,625 |
Furniture and Fixtures | 8,651,132 | 8,776,994 |
Leasehold Improvements | 33,625,888 | 33,069,524 |
Equipment and Software | 15,972,636 | 16,897,649 |
Construction in Progress | 4,169,772 | 6,828,923 |
Total Property and Equipment | 97,671,943 | 100,822,714 |
Less Accumulated Depreciation | (40,026,614) | (36,714,922) |
Property and Equipment, Net | $ 57,645,329 | $ 64,107,792 |
PROPERTY AND EQUIPMENT - Narrat
PROPERTY AND EQUIPMENT - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 24, 2022 | Dec. 25, 2021 | Dec. 24, 2022 | Dec. 25, 2021 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 3,499,585 | $ 6,864,790 | $ 7,471,055 | $ 13,121,707 |
Depreciation recognized for capital leases | $ 267,312 | 267,312 | $ 534,624 | 534,624 |
Borrowing costs | $ 375,241 | $ 375,241 | ||
Average capitalization rate | 11.95% | 11.95% |
INTANGIBLE ASSETS - Schedule of
INTANGIBLE ASSETS - Schedule of Intangible Assets (Details) - USD ($) | Dec. 24, 2022 | Jun. 25, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Total Intangible Assets | $ 77,093,119 | $ 77,093,119 |
Less Accumulated Amortization | (44,439,985) | (41,347,005) |
Intangible Assets, Net | 32,653,134 | 35,746,114 |
Capitalized Software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total Intangible Assets | 7,413,470 | 7,413,470 |
Less Accumulated Amortization | (4,824,287) | (4,413,974) |
Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total Intangible Assets | 16,409,600 | 16,409,600 |
Less Accumulated Amortization | (15,378,567) | (15,870,284) |
Intellectual Property | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total Intangible Assets | 12,455,287 | 4,016,597 |
Less Accumulated Amortization | (6,152,763) | (4,185,835) |
Dispensary Licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total Intangible Assets | 40,814,762 | 49,253,452 |
Less Accumulated Amortization | $ (18,084,368) | $ (16,876,912) |
INTANGIBLE ASSETS - Narrative (
INTANGIBLE ASSETS - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 24, 2022 | Dec. 25, 2021 | Dec. 24, 2022 | Dec. 25, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Depreciation, depletion and amortization, nonproduction | $ 1,410,858 | $ 3,206,091 | $ 3,123,979 | $ 6,431,928 |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Details) - USD ($) | Dec. 24, 2022 | Jun. 25, 2022 |
Extinguishment of Debt [Line Items] | ||
Total Accounts Payable and Accrued Liabilities | $ 42,926,092 | $ 38,905,818 |
Accounts Payable and Accrued Liabilities | ||
Extinguishment of Debt [Line Items] | ||
Accounts Payable | 19,663,409 | 14,627,746 |
Accrued Liabilities | 9,862,983 | 9,464,567 |
Accrued Inventory | 6,397,508 | 5,868,831 |
Accrued Payroll | 1,405,253 | 1,682,517 |
Local & State Taxes Payable | 5,030,310 | 6,695,532 |
Deferred Gain on Sale of Assets | 566,627 | 566,627 |
Total Accounts Payable and Accrued Liabilities | $ 42,926,090 | $ 38,905,820 |
DERIVATIVE LIABILITIES - Schedu
DERIVATIVE LIABILITIES - Schedule of Derivative Liabilities (Details) - USD ($) | 6 Months Ended | |
Dec. 24, 2022 | Dec. 25, 2021 | |
Derivative Instruments [Roll Forward] | ||
Change in Fair Value of Derivative Liabilities | $ (3,106,786) | $ (16,211,785) |
Derivative Liabilities One | ||
Derivative Instruments [Roll Forward] | ||
Balance at Beginning of Period | 6,749,563 | |
Change in Fair Value of Derivative Liabilities | (3,106,786) | |
Balance at End of Period | $ 3,642,777 |
DERIVATIVE LIABILITIES - Sche_2
DERIVATIVE LIABILITIES - Schedule of Assumptions to Measure Fair Value (Details) | 6 Months Ended |
Dec. 24, 2022 $ / shares | |
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |
Average Stock Price (in dollars per share) | $ 0.02 |
Term (in Years) | 3 months |
Expected Stock Price Volatility | 161.95% |
Top Up Provision | |
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |
Average Stock Price (in dollars per share) | $ 0.02 |
Weighted-Average Probability | 50% |
Term (in Years) | 5 years |
Expected Stock Price Volatility | 121.15% |
DERIVATIVE LIABILITIES - Sche_3
DERIVATIVE LIABILITIES - Schedule of Warrant Issued (Details) | Dec. 24, 2022 $ / shares shares |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Number of Warrants | shares | 50,000,000 |
Exercise Price (in dollars per share) | $ / shares | $ 0.50 |
DERIVATIVE LIABILITIES - Sche_4
DERIVATIVE LIABILITIES - Schedule of Assumptions to Measure Fair Value (Details) | 6 Months Ended |
Dec. 24, 2022 $ / shares | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Expected Stock Price Volatility | 161.95% |
Risk-Free Annual Interest Rate | 2.35% |
Expected Life (in Years) | 3 months |
Share Price (in dollars per share) | $ 0.02 |
Exercise Price (in dollars per share) | $ 0.37 |
LEASES - Schedule of Lease Cost
LEASES - Schedule of Lease Cost (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Dec. 24, 2022 | Dec. 25, 2021 | Dec. 24, 2022 | Dec. 25, 2021 | Jun. 25, 2022 | |
Finance Lease Cost: | |||||
Amortization of Finance Lease Right-of-Use Assets | $ 267,312 | $ 251,221 | $ 534,624 | $ 534,627 | |
Interest on Lease Liabilities | 1,835,068 | 1,725,752 | 3,639,574 | 3,510,293 | |
Operating Lease Cost | 2,746,638 | 4,412,675 | 6,200,503 | 8,854,752 | |
Total Lease Expenses | 4,849,018 | 6,389,648 | 10,374,701 | 12,899,672 | |
Sublease Income | (1,521,651) | (1,444,234) | (3,043,302) | (1,444,234) | |
Cash Paid for Amounts Included in the Measurement of Lease Liabilities: | |||||
Financing Cash Flows from Finance Leases | (1,818) | 0 | 666 | 959 | |
Operating Cash Flows from Operating Leases | $ 474,802 | $ 2,298,848 | $ 1,501,594 | $ 5,777,739 | |
Weighted-Average Remaining Lease Term (Years) - Finance Leases | 46 years | 46 years | 46 years | ||
Weighted-Average Remaining Lease Term (Years) - Operating Leases | 7 years | 7 years | 8 years | ||
Weighted-Average Discount Rate - Finance Leases | 24.81% | 24.81% | 24.33% | ||
Weighted-Average Discount Rate - Operating Leases | 16.66% | 16.66% | 18.70% |
LEASES - Schedule of Future Lea
LEASES - Schedule of Future Leases Payments (Details) | 6 Months Ended |
Dec. 24, 2022 USD ($) | |
Operating Leases | |
July 1, 2023 (remaining) | $ 4,692,026 |
June 29, 2024 | 12,931,089 |
June 28, 2025 | 9,311,213 |
June 27, 2026 | 9,495,658 |
June 26, 2027 | 9,466,730 |
Thereafter | 26,267,466 |
Total Lease Payments | 72,164,182 |
Less Interest | (19,541,732) |
Lease Liability Recognized | 52,622,450 |
Finance Leases | |
July 1, 2023 (remaining) | 2,934,524 |
June 29, 2024 | 10,961,495 |
June 28, 2025 | 7,087,736 |
June 27, 2026 | 7,300,368 |
June 26, 2027 | 7,519,379 |
Thereafter | 1,061,283,374 |
Total Lease Payments | 1,097,086,876 |
Less Interest | (1,065,503,555) |
Lease Liability Recognized | 31,583,321 |
Purchase option | $ 1 |
California Cultivation Facilities | |
Lessee, Lease, Description [Line Items] | |
Management Agreement fee, rate | 100% |
Nevada Cultivation Facilities | |
Lessee, Lease, Description [Line Items] | |
Management Agreement fee, rate | 30% |
NOTES PAYABLE - Schedule of Not
NOTES PAYABLE - Schedule of Notes Payable (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Dec. 24, 2022 | Jun. 25, 2022 | |
Short-Term Debt [Line Items] | ||
Financing liability incurred on various dates between January 2019 through September 2019 with implied interest rates ranging from 0.7% to 17.0% per annum. | $ 4,294,333 | $ 4,061,273 |
Total Notes Payable | 74,110,205 | 74,372,898 |
Less Current Portion of Notes Payable | (66,294,249) | (97,003,922) |
Convertible Notes Payable | ||
Short-Term Debt [Line Items] | ||
Other | 15,691 | 15,691 |
Total Notes Payable | 140,541,933 | 171,534,899 |
Less Unamortized Debt Issuance Costs and Loan Origination Fees | (137,478) | (158,079) |
Net Amount | 140,404,455 | 171,376,820 |
Less Current Portion of Notes Payable | (66,294,249) | (97,003,922) |
Notes Payable, Net of Current Portion | 74,110,206 | 74,372,898 |
Convertible Notes Payable | Financing Liability | ||
Short-Term Debt [Line Items] | ||
Financing liability incurred on various dates between January 2019 through September 2019 with implied interest rates ranging from 0.7% to 17.0% per annum. | $ 72,300,000 | $ 72,300,000 |
Interest rate | 0.70% | 17% |
Convertible Notes Payable | Non-revolving Senior Secured Term Notes | ||
Short-Term Debt [Line Items] | ||
Non-revolving, senior secured term notes dated between October 1, 2018 and October 30, 2020, issued to accredited investors, which mature on August 1, 2022 and July 31, 2022, and bear interest at a rate of 15.5% and 18.0% per annum. | $ 66,169,035 | $ 97,162,001 |
Interest rate | 15.50% | 18% |
Convertible Notes Payable | Promissory Notes | ||
Short-Term Debt [Line Items] | ||
Promissory notes dated November 7, 2018, issued to Lessor for tenant improvements as part of sales and leaseback transactions, which mature on November 7, 2028, bear interest at a rate of 10% per annum and require minimum monthly payments of $15,660 and $18,471. | $ 2,057,207 | $ 2,057,207 |
Interest rate | 10% | 10% |
Minimum monthly payment | $ 15,660 | $ 18,471 |
NOTES PAYABLE - Schedule of Rec
NOTES PAYABLE - Schedule of Reconciliation of Notes Payable (Details) - Notes Payable | 6 Months Ended |
Dec. 24, 2022 USD ($) | |
Short-Term Debt [Roll Forward] | |
Balance at beginning of period | $ 171,376,820 |
Paid-In-Kind Interest Capitalized | 1,257,988 |
Cash Payments | (32,388,433) |
Accretion of Debt Discount | (239,953) |
Accretion of Debt Discount Included in Discontinued Operations | 398,032 |
Balance at End of period | 140,404,454 |
Less Current portion of notes payables | (66,294,249) |
Notes Issued | $ 74,110,205 |
NOTES PAYABLE - Narrative (Deta
NOTES PAYABLE - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 6 Months Ended | 12 Months Ended | |
Dec. 24, 2022 | Feb. 28, 2022 | Dec. 24, 2022 | Dec. 31, 2023 | |
Short-Term Debt [Line Items] | ||||
Mandatory prepayment | $ 37.5 | |||
Principal repayment | $ 31.6 | |||
Default interest rate | 5% | |||
Forecast | ||||
Short-Term Debt [Line Items] | ||||
Repayments of debt | $ 8.5 |
SENIOR SECURED CONVERTIBLE CR_3
SENIOR SECURED CONVERTIBLE CREDIT FACILITY - Schedule of Senior Secured Convertible Credit Facility (Details) - USD ($) | Dec. 24, 2022 | Jun. 25, 2022 |
Schedule of Capitalization, Long-Term Debt [Line Items] | ||
Total Drawn on Senior Secured Convertible Credit Facility | $ 248,966,298 | $ 237,904,778 |
Less Unamortized Debt Discount | (102,773,249) | (105,899,115) |
Senior Secured Convertible Credit Facility, Net | 146,193,049 | 132,005,663 |
Secured Convertible Note | ||
Schedule of Capitalization, Long-Term Debt [Line Items] | ||
Total Drawn on Senior Secured Convertible Credit Facility | $ 23,944,485 | $ 22,880,556 |
Interest rate | 6% | 6% |
Secured Convertible Note 1 | ||
Schedule of Capitalization, Long-Term Debt [Line Items] | ||
Total Drawn on Senior Secured Convertible Credit Facility | $ 103,124,572 | $ 98,542,422 |
Interest rate | 6% | 6% |
Secured Convertible Note 2 | ||
Schedule of Capitalization, Long-Term Debt [Line Items] | ||
Total Drawn on Senior Secured Convertible Credit Facility | $ 33,534,018 | $ 32,043,996 |
Interest rate | 6% | 6% |
Secured Convertible Note 3 | ||
Schedule of Capitalization, Long-Term Debt [Line Items] | ||
Total Drawn on Senior Secured Convertible Credit Facility | $ 12,985,058 | $ 12,408,091 |
Interest rate | 6% | 6% |
Secured Convertible Note 4 | ||
Schedule of Capitalization, Long-Term Debt [Line Items] | ||
Total Drawn on Senior Secured Convertible Credit Facility | $ 15,273,641 | $ 14,594,985 |
Interest rate | 6% | 6% |
Secured Convertible Note 5 | ||
Schedule of Capitalization, Long-Term Debt [Line Items] | ||
Total Drawn on Senior Secured Convertible Credit Facility | $ 24,512,781 | $ 23,424,438 |
Interest rate | 6% | 6% |
Secured Convertible Note 6 | ||
Schedule of Capitalization, Long-Term Debt [Line Items] | ||
Total Drawn on Senior Secured Convertible Credit Facility | $ 3,428,182 | $ 3,275,857 |
Interest rate | 6% | 6% |
Secured Convertible Note 7 | ||
Schedule of Capitalization, Long-Term Debt [Line Items] | ||
Total Drawn on Senior Secured Convertible Credit Facility | $ 6,629,552 | $ 6,334,980 |
Interest rate | 6% | 6% |
Secured Convertible Note 8 | ||
Schedule of Capitalization, Long-Term Debt [Line Items] | ||
Total Drawn on Senior Secured Convertible Credit Facility | $ 10,348,746 | $ 9,888,919 |
Interest rate | 6% | 6% |
Secured Convertible Note 9 | ||
Schedule of Capitalization, Long-Term Debt [Line Items] | ||
Total Drawn on Senior Secured Convertible Credit Facility | $ 2,292,231 | $ 2,190,380 |
Interest rate | 6% | 6% |
Secured Convertible Note 10 | ||
Schedule of Capitalization, Long-Term Debt [Line Items] | ||
Total Drawn on Senior Secured Convertible Credit Facility | $ 12,893,031 | $ 12,320,154 |
Interest rate | 6% | 6% |
SENIOR SECURED CONVERTIBLE CR_4
SENIOR SECURED CONVERTIBLE CREDIT FACILITY - Narrative (Details) | 6 Months Ended |
Dec. 24, 2022 USD ($) | |
Senior Secured Convertible Total | |
Convertible Debt, Reconciliation [Roll Forward] | |
Balance at beginning of period | $ 132,005,663 |
Paid-In-Kind Interest Capitalized | 11,061,521 |
Accretion of Debt Discount | 3,125,865 |
Balance at end of period | 146,193,049 |
Tranche 1 | |
Convertible Debt, Reconciliation [Roll Forward] | |
Balance at beginning of period | 80,178,586 |
Paid-In-Kind Interest Capitalized | 5,646,079 |
Accretion of Debt Discount | 1,954,788 |
Balance at end of period | 87,779,453 |
Tranche 2 | |
Convertible Debt, Reconciliation [Roll Forward] | |
Balance at beginning of period | 21,218,356 |
Paid-In-Kind Interest Capitalized | 1,490,022 |
Accretion of Debt Discount | 514,561 |
Balance at end of period | 23,222,939 |
Tranche 3 | |
Convertible Debt, Reconciliation [Roll Forward] | |
Balance at beginning of period | 8,217,079 |
Paid-In-Kind Interest Capitalized | 576,967 |
Accretion of Debt Discount | 199,249 |
Balance at end of period | 8,993,295 |
Tranche 4 | |
Convertible Debt, Reconciliation [Roll Forward] | |
Balance at beginning of period | 1,051,827 |
Paid-In-Kind Interest Capitalized | 678,656 |
Accretion of Debt Discount | 0 |
Balance at end of period | 1,730,483 |
Incremental Advance - 1 | |
Convertible Debt, Reconciliation [Roll Forward] | |
Balance at beginning of period | 224,585 |
Paid-In-Kind Interest Capitalized | 152,325 |
Accretion of Debt Discount | 0 |
Balance at end of period | 376,910 |
Incremental Advance - 2 | |
Convertible Debt, Reconciliation [Roll Forward] | |
Balance at beginning of period | 433,598 |
Paid-In-Kind Interest Capitalized | 294,572 |
Accretion of Debt Discount | 0 |
Balance at end of period | 728,170 |
3rd Advance | |
Convertible Debt, Reconciliation [Roll Forward] | |
Balance at beginning of period | 842,981 |
Paid-In-Kind Interest Capitalized | 572,878 |
Accretion of Debt Discount | 0 |
Balance at end of period | 1,415,859 |
Amendment Fee Notes | |
Convertible Debt, Reconciliation [Roll Forward] | |
Balance at beginning of period | 15,512,409 |
Paid-In-Kind Interest Capitalized | 1,088,344 |
Accretion of Debt Discount | 376,148 |
Balance at end of period | 16,976,901 |
Restatement Fee Notes | |
Convertible Debt, Reconciliation [Roll Forward] | |
Balance at beginning of period | 2,211,711 |
Paid-In-Kind Interest Capitalized | 459,827 |
Accretion of Debt Discount | 73,578 |
Balance at end of period | 2,745,116 |
2nd Restatement Fee Notes | |
Convertible Debt, Reconciliation [Roll Forward] | |
Balance at beginning of period | 2,114,531 |
Paid-In-Kind Interest Capitalized | 101,851 |
Accretion of Debt Discount | 7,541 |
Balance at end of period | $ 2,223,923 |
SHAREHOLDERS' EQUITY - Schedule
SHAREHOLDERS' EQUITY - Schedule of Shares Issued and Outstanding (Details) - shares | 3 Months Ended | |
Dec. 24, 2022 | Sep. 24, 2022 | |
MM CAN USA Class B Redeemable Units | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance (in shares) | 64,806,292 | 65,066,106 |
Redemption of MedMen Corp Redeemable (in shares) | (445,320) | (259,814) |
Ending balance (in shares) | 64,360,972 | 64,806,292 |
MM Enterprises USA Common Units | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance (in shares) | 725,016 | 725,016 |
Redemption of MedMen Corp Redeemable (in shares) | 0 | 0 |
Ending balance (in shares) | 725,016 | 725,016 |
Subordinate Voting Shares | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance (in shares) | 1,301,683,764 | 1,301,423,950 |
Redemption of MedMen Corp Redeemable (in shares) | 445,320 | 259,814 |
Ending balance (in shares) | 1,302,129,084 | 1,301,683,764 |
SHAREHOLDERS_ EQUITY - Narrativ
SHAREHOLDERS’ EQUITY - Narrative (Details) | Dec. 24, 2022 | Jun. 25, 2022 |
MM CAN USA | ||
Class of Stock [Line Items] | ||
Ownership percentage | 4.71% | 4.76% |
MM Enterprises USA | ||
Class of Stock [Line Items] | ||
Ownership percentage | 0.05% |
SHAREHOLDERS' EQUITY - Schedu_2
SHAREHOLDERS' EQUITY - Schedule of VIE (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Dec. 24, 2022 | Dec. 25, 2021 | Dec. 24, 2022 | Dec. 25, 2021 | Jun. 25, 2022 | |
Class of Stock [Line Items] | |||||
Current Assets | $ 100,211,425 | $ 100,211,425 | $ 161,496,240 | ||
TOTAL ASSETS | 238,475,011 | 238,475,011 | 323,223,684 | ||
Current Liabilities | 237,644,428 | 237,644,428 | 319,591,380 | ||
TOTAL LIABILITIES | 567,267,179 | 567,267,179 | 641,736,420 | ||
Revenue | 29,554,100 | $ 35,517,161 | 59,598,153 | $ 72,253,065 | |
Variable Interest Entity (VIE) | |||||
Class of Stock [Line Items] | |||||
Current Assets | 28,643,065 | 28,643,065 | 26,360,108 | ||
Non-Current Assets | 16,368,718 | 16,368,718 | 18,426,751 | ||
TOTAL ASSETS | 45,011,783 | 45,011,783 | 44,786,859 | ||
Current Liabilities | 37,703,941 | 37,703,941 | 33,910,145 | ||
Non-Current Liabilities | 10,222,751 | 10,222,751 | 13,141,750 | ||
TOTAL LIABILITIES | 47,926,692 | 47,926,692 | 47,051,895 | ||
Non-Controlling Interest | (2,914,909) | (2,914,909) | (2,265,036) | ||
Revenue | 10,329,032 | 13,631,801 | |||
Net (Loss) Income Attributable to Non-Controlling Interest | (649,872) | 1,096,817 | |||
Venice Caregivers Foundation, Inc. | Variable Interest Entity (VIE) | |||||
Class of Stock [Line Items] | |||||
Current Assets | 1,471,651 | 1,471,651 | 1,735,304 | ||
Non-Current Assets | 8,482,483 | 8,482,483 | 10,073,880 | ||
TOTAL ASSETS | 9,954,134 | 9,954,134 | 11,809,184 | ||
Current Liabilities | 10,984,598 | 10,984,598 | 9,238,460 | ||
Non-Current Liabilities | 6,957,566 | 6,957,566 | 9,614,164 | ||
TOTAL LIABILITIES | 17,942,164 | 17,942,164 | 18,852,624 | ||
Non-Controlling Interest | (7,988,030) | (7,988,030) | (7,043,440) | ||
Revenue | 3,766,847 | 4,815,688 | |||
Net (Loss) Income Attributable to Non-Controlling Interest | (944,589) | (607,858) | |||
LAX Fund II Group, LLC | Variable Interest Entity (VIE) | |||||
Class of Stock [Line Items] | |||||
Current Assets | 0 | 0 | 1,067,636 | ||
Non-Current Assets | 3,011,882 | 3,011,882 | 3,379,412 | ||
TOTAL ASSETS | 3,011,882 | 3,011,882 | 4,447,048 | ||
Current Liabilities | 16,687,993 | 16,687,993 | 16,238,249 | ||
Non-Current Liabilities | 1,922,553 | 1,922,553 | 2,184,953 | ||
TOTAL LIABILITIES | 18,610,546 | 18,610,546 | 18,423,202 | ||
Non-Controlling Interest | (15,598,664) | (15,598,664) | (13,976,154) | ||
Revenue | 0 | 0 | |||
Net (Loss) Income Attributable to Non-Controlling Interest | (1,622,510) | (2,206,450) | |||
Natures Cure, Inc. | Variable Interest Entity (VIE) | |||||
Class of Stock [Line Items] | |||||
Current Assets | 27,171,414 | 27,171,414 | 23,557,168 | ||
Non-Current Assets | 4,874,353 | 4,874,353 | 4,973,459 | ||
TOTAL ASSETS | 32,045,767 | 32,045,767 | 28,530,627 | ||
Current Liabilities | 10,031,350 | 10,031,350 | 8,433,436 | ||
Non-Current Liabilities | 1,342,632 | 1,342,632 | 1,342,633 | ||
TOTAL LIABILITIES | 11,373,982 | 11,373,982 | 9,776,069 | ||
Non-Controlling Interest | $ 20,671,785 | 20,671,785 | 18,754,558 | ||
Revenue | 6,562,185 | 8,816,113 | |||
Net (Loss) Income Attributable to Non-Controlling Interest | $ 1,917,227 | $ 3,911,125 |
SHAREHOLDERS' EQUITY - Schedu_3
SHAREHOLDERS' EQUITY - Schedule of Other Non-controlling Interest (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Dec. 24, 2022 | Sep. 24, 2022 | Dec. 25, 2021 | Sep. 25, 2021 | Dec. 24, 2022 | Dec. 25, 2021 | |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||||
Net (Loss) Income | $ (17,342,254) | $ 4,047,901 | $ (20,357,976) | $ (60,610,031) | $ (13,294,364) | $ (80,968,007) |
Non Controlling Interests [Member] | ||||||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||||
Beginning balance | (473,982,734) | (473,982,734) | ||||
Net (Loss) Income | (1,247,161) | |||||
Ending balance | (475,229,895) | (475,229,895) | ||||
Venice Caregivers Foundation, Inc. | Non Controlling Interests [Member] | ||||||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||||
Beginning balance | (7,043,440) | (7,043,440) | ||||
Net (Loss) Income | (944,589) | |||||
Ending balance | (7,988,029) | (7,988,029) | ||||
LAX Fund II Group, LLC | Non Controlling Interests [Member] | ||||||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||||
Beginning balance | (13,976,154) | (13,976,154) | ||||
Net (Loss) Income | (1,622,510) | |||||
Ending balance | (15,598,664) | (15,598,664) | ||||
Natures Cure, Inc. | Non Controlling Interests [Member] | ||||||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||||
Beginning balance | 18,754,558 | 18,754,558 | ||||
Net (Loss) Income | 1,917,227 | |||||
Ending balance | 20,671,785 | 20,671,785 | ||||
Other Non- Controlling Interests | Non Controlling Interests [Member] | ||||||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||||
Beginning balance | $ (471,717,698) | (471,717,698) | ||||
Net (Loss) Income | (597,289) | |||||
Ending balance | $ (472,314,987) | $ (472,314,987) |
SHARE-BASED COMPENSATION - Narr
SHARE-BASED COMPENSATION - Narrative (Details) | 6 Months Ended |
Dec. 24, 2022 | |
Minimum | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Award vesting period | 5 years |
Maximum | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Award vesting period | 10 years |
SHARE-BASED COMPENSATION - Sche
SHARE-BASED COMPENSATION - Schedule of Share-based Compensation Expense (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 24, 2022 | Dec. 25, 2021 | Dec. 24, 2022 | Dec. 25, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Total Share-Based Compensation | $ 2,113,676 | $ 708,106 | $ 2,977,361 | $ 3,812,183 |
Equity Option [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Total Share-Based Compensation | 1,912,792 | 97,746 | 2,625,581 | 1,314,193 |
Stock Grants [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Total Share-Based Compensation | 0 | 207,494 | 0 | 540,827 |
Restricted Stock Grants [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Total Share-Based Compensation | $ 200,884 | $ 402,866 | $ 351,780 | $ 1,957,163 |
SHARE-BASED COMPENSATION - Sc_2
SHARE-BASED COMPENSATION - Schedule of Stock Options (Details) | 6 Months Ended |
Dec. 24, 2022 $ / shares shares | |
Number of Stock Options | |
Beginning balance (in shares) | shares | 8,649,673 |
Granted (in shares) | shares | 92,382,965 |
Forfeited and Expired (in shares) | shares | (312,032) |
Ending balance (in shares) | shares | 100,720,606 |
Stock Options Exercisable (in shares) | shares | 8,037,095 |
Weighted-Average Exercise Price | |
Beginning balance (in dollars per share) | $ / shares | $ 1.35 |
Granted (in dollars per share) | $ / shares | 0.05 |
Forfeited and Expired (in dollars per share) | $ / shares | 3.60 |
Ending balance (in dollars per share) | $ / shares | 0.15 |
Stock Options Exercisable (in dollars per share) | $ / shares |
SHARE-BASED COMPENSATION - Sc_3
SHARE-BASED COMPENSATION - Schedule of LTIP Units and LLC Redeemable Units (Details) | Dec. 24, 2022 $ / shares shares |
Share-Based Payment Arrangement [Abstract] | |
LTIP Issued And Outstanding (in shares) | 19,323,878 |
LLC Redeemable Units (in shares) | 725,016 |
Weighted Average grant date fair Value (in dollars per share) | $ / shares | $ 0.52 |
SHARE-BASED COMPENSATION - Sc_4
SHARE-BASED COMPENSATION - Schedule of Restricted Stock Grants (Details) - $ / shares | 6 Months Ended | |
Dec. 24, 2022 | Jun. 25, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | ||
Issued And Outstanding, Beginning Balance (in shares) | 10,998,483 | |
Vested, Beginning Balance (in shares) | 4,030,460 | |
Weighted average fair value at beginning (in dollars per share) | $ 0.20 | |
Vested, Vesting of Restricted Stock (in shares) | 490,661 | |
Weighted Average Fair Value, Vesting of Restricted Stock (in dollars per share) | $ 0.21 | |
Issued And Outstanding, Forfeiture of Restricted Stock (in shares) | (1,813,408) | |
Weighted Average Fair Value, Forfeiture of Restricted Stock (in dollars per share) | $ (0.22) | |
Issued And Outstanding, Ending Balance (in shares) | 9,185,075 | |
Vested, Ending Balance (in shares) | 4,521,121 | |
Weighted average fair value at ending (in dollars per share) | $ 0.30 |
SHARE-BASED COMPENSATION - Sc_5
SHARE-BASED COMPENSATION - Schedule of Warrants (Details) - Warrant - $ / shares | 6 Months Ended | |
Dec. 24, 2022 | Jun. 25, 2022 | |
Warrants Outstanding [Roll Forward] | ||
Beginning Balance | 450,134,811 | |
Weighted Average Exercise Price, Beginning balance | $ 0.25 | |
Expired | (6,023,696) | |
Weighted Average Exercise Price, Expired | $ 2.03 | |
Ending Balance | 444,111,115 | |
Weighted Average Exercise Price, Ending | $ 0.22 | |
Subordinate Voting Shares | ||
Warrants Outstanding [Roll Forward] | ||
Beginning Balance | 352,704,355 | |
Expired | (6,023,696) | |
Ending Balance | 346,680,659 | |
MM CAN USA Class B Redeemable Units | ||
Warrants Outstanding [Roll Forward] | ||
Beginning Balance | 97,430,456 | |
Expired | 0 | |
Ending Balance | 97,430,456 |
LOSS PER SHARE (Details)
LOSS PER SHARE (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Dec. 24, 2022 | Sep. 24, 2022 | Dec. 25, 2021 | Sep. 25, 2021 | Dec. 24, 2022 | Dec. 25, 2021 | |
Earnings Per Share [Abstract] | ||||||
Net Loss from Continuing Operations Attributable to Shareholders of MedMen Enterprises, Inc. | $ (15,086,000) | $ (8,217,000) | $ (39,427,000) | $ (54,381,000) | ||
Net Income (Loss) from Discontinued Operations | (2,256,000) | (12,141,000) | 26,132,000 | (26,587,000) | ||
Net (Loss) Income | $ (17,342,254) | $ 4,047,901 | $ (20,357,976) | $ (60,610,031) | $ (13,294,364) | $ (80,968,007) |
Weighted-Average Shares Outstanding - Basic (in shares) | 1,301,874,615 | 1,198,515,279 | 1,301,767,158 | 1,070,605,666 | ||
Dilutive effect of LTIP and LLC Redeemable Units issued for compensation (in shares) | 19,323,878 | 19,323,878 | 19,323,878 | 19,323,878 | ||
Dilutive effect of restricted stock granted under the Equity Plan (in shares) | 9,185,075 | 25,673,720 | 9,185,075 | 25,673,720 | ||
Dilutive effect of warrants and top-up warrants (in shares) | 194,720,261 | 138,498,284 | 258,878,685 | 175,668,177 | ||
Dilutive effect of convertible debentures (in shares) | 3,255,897,270 | 1,007,089,116 | 3,255,897,270 | 1,007,089,116 | ||
Weighted-Average Shares Outstanding - Diluted (in shares) | 4,781,001,100 | 2,389,100,278 | 4,845,052,067 | 2,298,360,557 |
GENERAL AND ADMINISTRATIVE EX_3
GENERAL AND ADMINISTRATIVE EXPENSES (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 24, 2022 | Dec. 25, 2021 | Dec. 24, 2022 | Dec. 25, 2021 | |
General And Administrative Expenses | ||||
Salaries and Benefits | $ 6,536,411 | $ 9,991,545 | $ 13,468,859 | $ 19,903,033 |
Professional Fees | 2,137,010 | 7,815,185 | 3,509,420 | 15,245,844 |
Total Lease Expenses | 3,021,217 | 4,712,476 | 6,649,162 | 9,467,359 |
Licenses, Fees and Taxes | 1,823,436 | 1,293,194 | 3,866,945 | 3,830,982 |
Share-Based Compensation | 2,113,676 | 722,802 | 2,977,361 | 2,370,111 |
Deal Costs | 0 | 1,174,357 | 429,272 | 2,811,944 |
Other General and Administrative | 2,709,471 | 5,583,195 | 5,551,538 | 10,312,715 |
Total General and Administrative Expenses | $ 18,341,221 | $ 31,292,754 | $ 36,452,557 | $ 63,941,988 |
OTHER OPERATING (INCOME) EXPE_3
OTHER OPERATING (INCOME) EXPENSE (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 24, 2022 | Dec. 25, 2021 | Dec. 24, 2022 | Dec. 25, 2021 | |
Other Operating Income Expense | ||||
Loss (Gain) on Disposals of Assets | $ 1,153,225 | $ (141,662) | $ 1,358,820 | $ (126,516) |
Restructuring and Reorganization Expense | 0 | 385,652 | 423,793 | 2,764,327 |
Gain on Settlement of Accounts Payable | 215,659 | 0 | 141,022 | (177,990) |
(Gain) Loss on Lease Terminations | (1,877,298) | 173,765 | (3,464,947) | 173,765 |
(Gain) Loss on Disposal of Assets Held for Sale | (112,225) | 0 | 532,598 | 0 |
Legal Settlements | (3,491,431) | 0 | (3,491,431) | 0 |
Other Income | (1,522,280) | 213,216 | (3,043,918) | 196,413 |
Total Other Operating (Income) Expense | $ (5,634,350) | $ 630,971 | $ (7,544,063) | $ 2,829,999 |
OTHER OPERATING (INCOME) EXPE_4
OTHER OPERATING (INCOME) EXPENSE - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 24, 2022 | Dec. 25, 2021 | Dec. 24, 2022 | Dec. 25, 2021 | |
Other Operating Income Expense | ||||
Sublease Income | $ 1,521,651 | $ 1,444,234 | $ 3,043,302 | $ 1,444,234 |
PROVISION FOR INCOME TAXES AN_3
PROVISION FOR INCOME TAXES AND DEFERRED INCOME TAXES (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 24, 2022 | Dec. 25, 2021 | Dec. 24, 2022 | Dec. 25, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Loss from Continuing Operations Before Provision for Income Taxes | $ (14,025,468) | $ (16,355,274) | $ (32,673,967) | $ (42,826,906) |
Provision for Income Tax Expense | $ (1,060,808) | $ 8,137,898 | $ (6,752,886) | $ (11,554,010) |
Effective Tax Rate | 8% | (50.00%) | 21% | 27% |
PROVISION FOR INCOME TAXES AN_4
PROVISION FOR INCOME TAXES AND DEFERRED INCOME TAXES - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |
Dec. 24, 2022 | Dec. 24, 2022 | Jun. 25, 2022 | |
Income Tax Disclosure [Abstract] | |||
Canadian non-capital losses | $ 12,230,000 | ||
Canadian non-capital losses, tax effected | 3,240,000 | ||
Share issuance cost | 6,000,000 | ||
Share issuance cost, tax effected | 1,620,000 | ||
Valuation allowance | $ 217,300,000 | 217,300,000 | |
Unrecognized tax benefits | 18,781,424 | 18,781,424 | |
Net discrete tax expense | $ 407,993 | $ 407,993 | |
California | |||
Tax Credit Carryforward [Line Items] | |||
Operating losses | $ 22,000,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 24, 2022 | Jul. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Litigation amount claimed | $ 600 | |
Litigation gain contingency, unrecorded | $ 18,500 | |
Litigation settlement, expense | $ 350 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) $ in Thousands | 6 Months Ended |
Dec. 24, 2022 USD ($) | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
Periodic payment in cash | 33.33% |
Periodic payment in subordinated voting shares | 66.67% |
Board of Directors | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
Directors' fees, periodic payment | $ 200 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) | 6 Months Ended |
Dec. 24, 2022 | |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
REVENUE (Details)
REVENUE (Details) | 3 Months Ended | 6 Months Ended | ||
Dec. 24, 2022 USD ($) | Dec. 25, 2021 USD ($) | Dec. 24, 2022 USD ($) | Dec. 25, 2021 USD ($) | |
Revenue from Contract with Customer [Abstract] | ||||
Number of operating segments | 1 | |||
Financing Receivable, Past Due [Line Items] | ||||
Revenue from Continuing Operations | $ 29,548,370 | $ 35,517,161 | $ 59,592,423 | $ 72,253,065 |
Revenue from Discontinued Operations | 2,282,288 | 8,065,341 | 5,911,927 | 15,405,440 |
Total Revenue | 31,830,658 | 43,582,502 | 65,504,350 | 87,658,505 |
California | ||||
Financing Receivable, Past Due [Line Items] | ||||
Total Revenue | 19,575,393 | 23,368,439 | 39,504,378 | 47,994,994 |
Nevada | ||||
Financing Receivable, Past Due [Line Items] | ||||
Total Revenue | 2,812,902 | 3,855,371 | 5,810,371 | 7,934,522 |
Illinois | ||||
Financing Receivable, Past Due [Line Items] | ||||
Total Revenue | 3,082,089 | 4,104,970 | 6,624,159 | 8,433,572 |
Arizona | ||||
Financing Receivable, Past Due [Line Items] | ||||
Total Revenue | 3,343,592 | 4,173,609 | 6,138,238 | 7,875,206 |
Massachusetts | ||||
Financing Receivable, Past Due [Line Items] | ||||
Total Revenue | $ 734,394 | $ 14,772 | $ 1,515,277 | $ 14,771 |
DISCONTINUED OPERATIONS - Narra
DISCONTINUED OPERATIONS - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 15, 2022 | Aug. 22, 2022 | Dec. 24, 2022 | Dec. 24, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | ||||
Sales Price | $ 67,000,000 | |||
Sales in cash | 63,000,000 | |||
Liabilities assumed by buyer | 4,000,000 | |||
Proceeds from sale of assets | $ 11,500,000 | 40,000,000 | ||
Remains due and receivable | $ 11,500,000 | $ 11,500,000 | ||
Proceeds from other debt | 31,599,999 | |||
Proceeds from loan issuance | $ 19,558,947 | |||
Gain on sale of assets | $ 31,719,833 | $ 31,719,833 |
DISCONTINUED OPERATIONS - Sched
DISCONTINUED OPERATIONS - Schedule of Net Operating Loss of Discontinued Operation (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 24, 2022 | Dec. 25, 2021 | Dec. 24, 2022 | Dec. 25, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | ||||
Revenue | $ 2,282,288 | $ 8,065,341 | $ 5,911,927 | $ 15,405,440 |
Cost of Goods Sold | 439,466 | 5,672,043 | 2,630,135 | 10,899,596 |
Gross Profit | 1,842,822 | 2,393,298 | 3,281,792 | 4,505,844 |
Expenses: | ||||
General and Administrative | 2,134,342 | 6,329,144 | 6,853,135 | 11,946,739 |
Sales and Marketing | 15,015 | 127,844 | 58,326 | 231,647 |
Depreciation and Amortization | 21,107 | 1,189,331 | 894,002 | 2,411,090 |
Impairment Expense | 0 | 0 | (78,433) | 0 |
Gain on Disposal of Assets and Other Income | 0 | 0 | (36,305,166) | (597,591) |
Total (Income) Expenses | 2,170,464 | 7,646,319 | (28,578,136) | 13,991,885 |
Income (Loss) from Discontinued Operations | (327,642) | (5,253,021) | 31,859,928 | (9,486,041) |
Other Expense: | ||||
Interest Expense | 1,783,685 | 4,755,126 | 5,545,446 | 9,371,955 |
Accretion of Debt Discount and Loan Origination Fees | 0 | 3,446,949 | 398,032 | 6,987,857 |
Total Other Expense | 1,783,685 | 8,202,075 | 5,943,478 | 16,359,812 |
Income (Loss) from Discontinued Operations Before Provision for Income Taxes | (2,111,327) | (13,455,096) | 25,916,450 | (25,845,853) |
Provision for Income Tax Benefit (Expense) | (144,651) | 1,314,496 | 216,039 | (741,238) |
Net Income (Loss) from Discontinued Operations | $ (2,255,978) | $ (12,140,600) | $ 26,132,489 | $ (26,587,091) |
DISCONTINUED OPERATIONS - Sch_2
DISCONTINUED OPERATIONS - Schedule of Assets Included in Discontinued Operation (Details) - USD ($) | Dec. 24, 2022 | Jun. 25, 2022 |
Carrying Amounts of the Assets Included in Discontinued Operations: | ||
Cash and Cash Equivalents | $ 540,828 | $ 1,124,076 |
Restricted Cash | 5,280 | 5,280 |
Accounts Receivable and Prepaid Expenses | 22,019 | 334,621 |
Inventory | 4,483,051 | 6,866,833 |
TOTAL CURRENT ASSETS | ||
Property and Equipment, Net | 9,569,610 | 41,273,597 |
Operating Lease Right-of-Use Assets | 19,111,359 | 31,543,058 |
Intangible Assets, Net | 10,582,559 | 40,799,146 |
Other Assets | 458,383 | 1,181,795 |
TOTAL ASSETS OF THE DISPOSAL GROUP CLASSIFIED AS HELD FOR SALE | 44,773,089 | 123,128,406 |
Carrying Amounts of the Liabilities Included in Discontinued Operations: | ||
Accounts Payable and Accrued Liabilities | 979,864 | 6,295,745 |
Income Taxes Payable | 389,677 | 1,671,380 |
Other Current Liabilities | (5,641) | 89,069 |
Current Portion of Operating Lease Liabilities | 2,812,765 | 4,209,512 |
Current Portion of Finance Lease Liabilities | 0 | 174,000 |
TOTAL CURRENT LIABILITIES | ||
Operating Lease Liabilities, Net of Current Portion | 18,398,345 | 56,410,071 |
Deferred Tax Liabilities | 5,977,580 | 6,097,597 |
Notes Payable | 0 | 11,100,000 |
TOTAL NON-CURRENT LIABILITIES | ||
TOTAL LIABILITIES OF THE DISPOSAL GROUP CLASSIFIED AS HELD FOR SALE | $ 28,552,590 | $ 86,047,374 |