Cover
Cover - shares | 9 Months Ended | |
Mar. 27, 2021 | May 07, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | MedMen Enterprises, Inc. | |
Entity Central Index Key | 0001776932 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | true | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Mar. 27, 2021 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2021 | |
Entity Ex Transition Period | false | |
Entity Common Stock Shares Outstanding | 664,200,870 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes | |
Entity Incorporation, State or Country Code | A1 | |
Entity File Number | 000-56199 |
Unaudited Interim Condensed Con
Unaudited Interim Condensed Consolidated Balance Sheets - USD ($) | Mar. 27, 2021 | Jun. 27, 2020 |
Current Assets: | ||
Cash and Cash Equivalents | $ 21,313,672 | $ 9,418,501 |
Restricted Cash | 730 | 1,029 |
Accounts Receivable and Prepaid Expenses | 6,658,615 | 5,532,044 |
Inventory | 17,047,620 | 18,976,978 |
Current Assets Held for Sale | 64,216,871 | 37,900,006 |
Other Current Assets | 8,177,203 | 9,105,457 |
Due from Related Party | 3,109,717 | |
Total Current Assets | 117,414,711 | 84,043,732 |
Operating Lease Right-of-Use Assets | 74,873,584 | 95,262,366 |
Property and Equipment, Net | 134,176,989 | 163,623,095 |
Intangible Assets, Net | 115,334,085 | 136,405,145 |
Goodwill | 32,900,458 | 32,900,458 |
Non-Current Assets Held for Sale | 46,228,551 | |
Other Assets | 12,630,961 | 15,800,257 |
TOTAL ASSETS | 487,330,788 | 574,263,604 |
Current Liabilities: | ||
Accounts Payable and Accrued Liabilities | 58,087,253 | 75,425,161 |
Income Taxes Payable | 51,795,935 | 38,770,314 |
Other Current Liabilities | 20,722,125 | 20,278,381 |
Current Portion of Operating Lease Liabilities | 8,704,279 | 8,318,506 |
Current Portion of Finance Lease Liabilities | 204,770 | 1,644,044 |
Current Portion of Notes Payable | 97,169,640 | 16,188,668 |
Current Liabilities Held for Sale | 44,523,220 | 24,033,005 |
Due to Related Party | 1,476,921 | 4,556,814 |
Total Current Liabilities | 282,684,143 | 189,214,893 |
Operating Lease Liabilities, Net of Current Portion | 96,779,586 | 110,928,400 |
Finance Lease Liabilities, Net of Current Portion | 28,440,822 | 58,569,498 |
Other Non-Current Liabilities | 3,790,561 | 4,215,533 |
Non-Current Liabilities Held for Sale | 28,502,256 | |
Deferred Tax Liabilities | 48,105,032 | 40,543,074 |
Senior Secured Convertible Credit Facility | 157,065,410 | 166,368,463 |
Notes Payable, Net of Current Portion | 92,845,744 | 152,809,937 |
TOTAL LIABILITIES | 709,711,298 | 751,152,054 |
MEZZANINE EQUITY: | ||
Super Voting Shares (no par value, unlimited shares authorized, nil and 815,295 shares issued and outstanding as of March 27, 2021 and June 27, 2020, respectively) | 82,500 | |
SHAREHOLDERS' EQUITY: | ||
Preferred Shares (no par value, unlimited shares authorized and no shares issued and outstanding) | ||
Subordinate Voting Shares (no par value, unlimited shares authorized, 625,769,627 and 403,907,218 shares issued and outstanding as of March 27, 2021 and June 27, 2020, respectively) | ||
Additional Paid-In Capital | 892,713,747 | 791,172,613 |
Accumulated Deficit | (679,595,695) | (631,365,866) |
Total Equity Attributable to Shareholders of MedMen Enterprises Inc. | 213,118,052 | 159,889,247 |
Non-Controlling Interest | (435,498,562) | (336,777,697) |
TOTAL MEZZANINE EQUITY AND SHAREHOLDERS' EQUITY | (222,380,510) | (176,888,450) |
TOTAL LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS' EQUITY | $ 487,330,788 | $ 574,263,604 |
Unaudited Interim Condensed C_2
Unaudited Interim Condensed Consolidated Balance Sheets (Parenthetical) - shares | Mar. 27, 2021 | Jun. 27, 2020 |
Super Voting Shares [Member] | ||
Stockholders' deficit | ||
Preferred stock, shares issued | 0 | 815,295 |
Preferred stock, shares outstanding | 0 | 815,295 |
Subordinate Voting Shares [Member] | ||
Stockholders' deficit | ||
Preferred stock, shares issued | 625,769,627 | 403,907,218 |
Preferred stock, shares outstanding | 625,769,627 | 403,907,218 |
Unaudited Interim Condensed C_3
Unaudited Interim Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 27, 2021 | Mar. 28, 2020 | Mar. 27, 2021 | Mar. 28, 2020 | |
Income Statement [Abstract] | ||||
Revenue | $ 32,028,679 | $ 44,064,955 | $ 96,390,475 | $ 123,391,681 |
Cost of Goods Sold | 18,707,174 | 30,429,063 | 50,666,827 | 78,575,746 |
Gross Profit | 13,321,505 | 13,635,892 | 45,723,648 | 44,815,935 |
Expenses: | ||||
General and Administrative | 28,939,691 | 42,957,935 | 89,686,896 | 150,774,000 |
Sales and Marketing | 127,570 | 1,047,996 | 524,209 | 10,440,773 |
Depreciation and Amortization | 7,950,490 | 7,476,622 | 24,837,550 | 22,351,909 |
Realized and Unrealized Loss on Changes in Fair Value of Contingent Consideration | 962,791 | 390,727 | 8,462,116 | |
Impairment Expense | 1,573,563 | 2,363,272 | ||
Other Operating Expense (Income) | 1,558,530 | 1,848,209 | (24,818,043) | 6,783,169 |
Total Expenses | 40,149,844 | 54,293,553 | 92,984,611 | 198,811,967 |
Loss from Operations | (26,828,339) | (40,657,661) | (47,260,963) | (153,996,032) |
Other Expense (Income): | ||||
Interest Expense | 10,114,050 | 7,136,316 | 26,574,962 | 21,313,190 |
Interest Income | (41,915) | (126,089) | (582,980) | (760,809) |
Amortization of Debt Discount and Loan Origination Fees | 8,166,700 | 1,511,085 | 14,634,267 | 3,289,863 |
Change in Fair Value of Derivatives | (1,938,995) | (11,725) | (2,066,495) | (8,041,429) |
Realized and Unrealized Gain on Investments | (86,124) | (16,600,604) | ||
Loss on Extinguishment of Debt | 6,420,526 | 11,570,696 | 17,493,887 | 43,800,931 |
Total Other Expense | 22,720,366 | 19,994,159 | 56,053,641 | 43,001,142 |
Loss from Continuing Operations Before Provision for Income Taxes | (49,548,705) | (60,651,820) | (103,314,604) | (196,997,174) |
Provision for Income Tax Benefit (Expense) | 32,207,910 | 13,836,022 | (2,101,121) | 47,088,266 |
Net Loss from Continuing Operations | (17,340,795) | (46,815,798) | (105,415,725) | (149,908,908) |
Net Income (Loss) from Discontinued Operations, Net of Taxes | 7,609,983 | (5,843,713) | (6,023,429) | (58,797,102) |
Net Loss | (9,730,812) | (52,659,511) | (111,439,154) | (208,706,010) |
Net Loss Attributable to Non-Controlling Interest | 3,987,882 | (27,687,295) | (26,105,114) | (118,260,518) |
Net Loss Attributable to Shareholders of MedMen Enterprises Inc. | $ (13,718,694) | $ (24,972,216) | $ (85,334,040) | $ (90,445,492) |
Income (Loss) Per Share - Basic and Diluted: | ||||
From Continuing Operations Attributable to Shareholders of MedMen Enterprises Inc. | $ (0.04) | $ (0.06) | $ (0.18) | $ (0.48) |
From Discontinued Operations Attributable to Shareholders of MedMen Enterprises Inc. | $ 0.01 | $ (0.02) | $ (0.01) | $ (0.89) |
Weighted-Average Shares Outstanding - Basic and Diluted | 541,029,620 | 315,384,911 | 482,213,951 | 65,930,969 |
Unaudited Interim Condensed C_4
Unaudited Interim Condensed Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) | Super Voting | Subordinate Voting | Additional Paid-In Capital | Accumulated Deficit | Total equity attributable to Shareholders of Medmen | Noncontrolling Interest | Total |
Balance, shares at Jun. 28, 2019 | 1,630,590 | 173,010,922 | |||||
Balance, amount at Jun. 28, 2019 | $ 164,999 | $ 613,356,006 | $ (370,382,824) | $ 243,138,181 | $ (31,867,405) | $ 211,270,776 | |
Net Loss | (90,445,492) | (90,445,492) | (118,260,518) | (208,706,010) | |||
At-the-Market Equity Financing Program, Net, shares | 9,789,300 | ||||||
At-the-Market Equity Financing Program, Net, amount | 12,399,249 | 12,399,249 | 12,399,249 | ||||
Shares Issued for Cash, shares | 61,596,792 | ||||||
Shares Issued for Cash, amount | 50,193,938 | 50,193,938 | 50,193,938 | ||||
Shares Issued to Settle Debt and Accrued Interest, shares | 6,801,790 | ||||||
Shares Issued to Settle Debt and Accrued Interest, amount | 5,255,172 | 5,255,172 | 5,255,172 | ||||
Shares Issued to Settle Accounts Payable and Liabilities, shares | 15,847,581 | ||||||
Shares Issued to Settle Accounts Payable and Liabilities, amount | 5,684,851 | 5,684,851 | 5,684,851 | ||||
Shares Issued to Settle Contingent Consideration, shares | 13,737,444 | ||||||
Shares Issued to Settle Contingent Consideration, amount | 11,559,875 | 11,559,875 | 11,559,875 | ||||
Asset Acquisitions, shares | 7,373,034 | ||||||
Asset Acquisitions, amount | 4,904,381 | 4,904,381 | 4,904,381 | ||||
Equity Component of Debt - New and Amended | 23,093,250 | 23,093,250 | 23,093,250 | ||||
Redemption of MedMen Corp Redeemable Shares, shares | 27,090,259 | ||||||
Redemption of MedMen Corp Redeemable Shares, amount | 31,690,004 | (27,862,104) | 3,827,900 | (3,827,900) | |||
Shares Issued for Vested Restricted Stock Units, shares | 329,548 | ||||||
Shares Issued for Vested Restricted Stock Units, amount | |||||||
Shares Issued for Other Assets, shares | 13,479,589 | ||||||
Shares Issued for Other Assets, amount | 7,862,916 | 7,862,916 | 7,862,916 | ||||
Shares Issued for Acquisition Costs, shares | 269,817 | ||||||
Shares Issued for Acquisition Costs, amount | 429,314 | 429,314 | 429,314 | ||||
Shares Issued for Business Acquisition, shares | 5,112,263 | ||||||
Shares Issued for Business Acquisition, amount | 9,833,000 | 9,833,000 | 9,833,000 | ||||
Stock Grants for Compensation, shares | 2,531,763 | ||||||
Stock Grants for Compensation, amount | 3,005,795 | 3,005,795 | 35,217 | 3,041,012 | |||
Share-Based Compensation | 6,312,418 | 6,312,418 | 6,312,418 | ||||
Deferred Tax Impact On Conversion Feature | (260) | (260) | (260) | ||||
Cancellation of Super Voting Shares, shares | (815,295) | ||||||
Cancellation of Super Voting Shares, amount | $ (82,500) | 82,500 | |||||
Non-Controlling Interest Equity Transactions: Distributions | (310,633) | (310,633) | |||||
Non-Controlling Interest Equity Transactions: Equity Component of Debt - New and Amended | 5,331,969 | 5,331,969 | |||||
Non-Controlling Interest Equity Transactions: Share-Based Compensation | 1,492,073 | 1,492,073 | |||||
Balance, shares at Mar. 28, 2020 | 815,295 | 336,970,102 | |||||
Balance, amount at Mar. 28, 2020 | $ 82,500 | 785,662,669 | (488,690,680) | 297,054,488 | (147,407,197) | 149,647,291 | |
Balance, shares at Jun. 27, 2020 | 815,295 | 403,907,218 | |||||
Balance, amount at Jun. 27, 2020 | $ 82,500 | 791,172,613 | (631,365,866) | 159,889,247 | (336,777,697) | (176,888,450) | |
Net Loss | (85,334,040) | (85,334,040) | (26,105,114) | (111,439,154) | |||
Shares Issued for Cash, shares | 57,800,000 | ||||||
Shares Issued for Cash, amount | 18,885,912 | 18,885,912 | 18,885,912 | ||||
Fair Value of Warrants - Private Placement Cost, amount | (7,228,135) | (7,228,135) | (7,228,135) | ||||
Shares Issued to Settle Accounts Payable and Liabilities, shares | 14,911,047 | ||||||
Shares Issued to Settle Accounts Payable and Liabilities, amount | 2,755,853 | 2,755,853 | 2,755,853 | ||||
Equity Component of Debt - New and Amended | 53,854,490 | 53,854,490 | 53,854,490 | ||||
Redemption of MedMen Corp Redeemable Shares, shares | 133,969,228 | ||||||
Redemption of MedMen Corp Redeemable Shares, amount | 31,992,438 | 43,468,394 | 75,460,832 | (75,460,832) | |||
Shares Issued for Vested Restricted Stock Units, shares | 7,173,256 | ||||||
Shares Issued for Vested Restricted Stock Units, amount | 437,386 | 437,386 | 437,386 | ||||
Warrants Issued Pursuant to Debt Agreements | 7,834,885 | 7,834,885 | 7,834,885 | ||||
Stock Grants for Compensation, shares | 3,703,730 | ||||||
Stock Grants for Compensation, amount | 693,659 | 693,659 | 693,659 | ||||
Deemed Dividend - Down Round Feature of Warrants | 6,364,183 | (6,364,183) | |||||
Share-Based Compensation | 3,033,421 | 3,033,421 | 3,033,421 | ||||
Deferred Tax Impact On Conversion Feature | (19,175,962) | (19,175,962) | (1,210,052) | (20,386,014) | |||
Cancellation of Super Voting Shares, shares | (815,295) | ||||||
Cancellation of Super Voting Shares, amount | $ (82,500) | 82,500 | |||||
Debt Amendment Fees Settled in Equity, shares | 4,305,148 | ||||||
Debt Amendment Fees Settled in Equity, amount | 2,010,504 | 2,010,504 | 2,010,504 | ||||
Non-Controlling Interest Equity Transactions: Equity Component on Debt and Debt Modification | 4,055,133 | 4,055,133 | |||||
Balance, shares at Mar. 27, 2021 | 625,769,627 | ||||||
Balance, amount at Mar. 27, 2021 | $ 892,713,747 | $ (679,595,695) | $ 213,118,052 | $ (435,498,562) | $ (222,380,510) |
Unaudited Interim Condensed C_5
Unaudited Interim Condensed Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | |
Mar. 27, 2021 | Mar. 28, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net Loss from Continuing Operations | $ (105,415,725) | $ (149,908,908) |
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities: | ||
Deferred Tax (Recovery) Expense | (10,862,478) | (62,961,468) |
Depreciation and Amortization | 25,221,168 | 24,438,013 |
Non-Cash Operating Lease Costs | 20,935,916 | 19,076,003 |
Accretion of Debt Discount and Loan Origination Fees | 14,634,266 | 3,289,863 |
Loss on Disposal of Asset | 669,601 | |
Gain on Lease Modifications | (17,748,458) | |
Accretion of Deferred Gain on Sale of Property | (424,972) | (424,970) |
Impairment of Assets | 2,363,272 | |
Realized and Unrealized Gain on Investments, Assets Held for Sale and Other Assets | (10,709,999) | (16,600,604) |
Change in Fair Value of Contingent Consideration | 390,727 | 8,462,116 |
Change in Fair Value of Derivative Liabilities | (2,066,495) | (8,041,429) |
Loss on Extinguishment of Debt and Settlement of Accounts Payables and Accrued Liabilities | 17,493,994 | 43,800,931 |
Share-Based Compensation | 4,164,466 | 10,845,503 |
Interest Capitalized on Finance Lease Liabilities | 707,965 | |
Shares Issued for Acquisition Costs | 429,314 | |
Changes in Operating Assets and Liabilities: | ||
Accounts Receivable and Income Taxes Receivable | (1,126,571) | (1,385,228) |
Prepaid Rent - Related Party | 2,712,237 | |
Prepaid Expenses | (171) | 8,141,338 |
Inventory | 1,929,358 | 5,002,584 |
Other Current Assets | 1,926,650 | 6,095,806 |
Due from Related Party | 3,109,717 | 782,866 |
Other Assets | 2,769,296 | (13,346,695) |
Accounts Payable and Accrued Liabilities | (2,090,168) | 29,602,480 |
Income Taxes Payable | 12,857,702 | 14,375,083 |
Other Current Liabilities | 28,426,057 | 9,102,790 |
Interest Payments on Finance Leases | (4,061,842) | (4,617,716) |
Cash Payments - Operating Lease Liabilities | (15,611,252) | (16,892,734) |
Due to Related Party | (3,079,893) | (717,847) |
Other Non-Current Liabilities | 0 | 787,492 |
NET CASH USED IN CONTINUED OPERATING ACTIVITIES | (35,597,869) | (87,953,180) |
Net Cash Used in Discontinued Operating Activities | (8,068,255) | (4,746,067) |
NET CASH USED IN OPERATING ACTIVITIES | (43,666,124) | (92,699,247) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of Property and Equipment | (3,451,958) | (44,829,009) |
Additions to Intangible Assets | (622,329) | (2,686,488) |
Proceeds from the Sale of Investments | 0 | 12,500,000 |
Proceeds from Sale of Assets Held for Sale and Other Assets | 19,002,185 | 21,947,797 |
Proceeds from Sale of Property | 0 | 9,300,000 |
Acquisition of Businesses, Net of Cash Acquired | 0 | (1,000,000) |
Restricted Cash | 299 | 39,324 |
NET CASH PROVIDED BY (USED IN) CONTINUED INVESTING ACTIVITIES | 14,928,198 | (4,728,376) |
Net Cash Used in Discontinued Investing Activities | 0 | (8,540,311) |
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | 14,928,198 | (13,268,687) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Issuance of Subordinate Voting Shares for Cash | 18,885,912 | 62,593,187 |
Payment of Loan Amendment Fee | 0 | (500,000) |
Proceeds from Issuance of Senior Secured Convertible Credit Facility | 14,577,000 | 47,500,000 |
Proceeds from Issuance of Notes Payable | 15,830,279 | 13,850,000 |
Principal Repayments of Senior Secured Convertible Credit Facility | (8,000,000) | 0 |
Principal Repayments of Notes Payable | (660,094) | (14,922,455) |
Principal Repayments of Finance Lease Liability | 0 | (807,432) |
Debt and Equity Issuance Costs | 0 | (1,859,784) |
Distributions - Non-Controlling Interest | 0 | (310,633) |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 40,633,097 | 105,542,883 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 11,895,171 | (425,051) |
Cash and Cash Equivalents, Beginning of Period | 9,418,501 | 32,172,302 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 21,313,672 | 31,747,251 |
SUPPLEMENTAL DISCLOSURE FOR CASH FLOW INFORMATION | ||
Cash Paid for Interest | 7,398,733 | 19,400,295 |
Non-Cash Investing and Financing Activities: | ||
Net Assets Transferred to Held for Sale | 6,614,987 | 11,823,655 |
Adoption of ASC 842 - Leases | 0 | 144,602,158 |
Relief of Accounts Payable for Return of Property and Equipment | 1,748,396 | 0 |
Receivable Recorded on Asset Held for Sale | 6,172,096 | 0 |
Fair Value of Warrants - Private Placement Cost | 7,228,135 | 0 |
Lease Termination and Amendments | 37,250,808 | 0 |
Recognition of Right-of-Use Assets for Finance Leases | 0 | 45,614,041 |
Paid-in-Kind Interest Capitalized to Debt | 32,332,500 | 0 |
Settlement of Contingent Consideration with Shares | 0 | 11,559,875 |
Increase in Fair Value of Contingent Consideration Related to Asset Acquisition | 0 | 9,374,487 |
Issuance of Subordinate Voting Shares for Intangible Assets and Other Assets | 0 | 12,767,297 |
Redemption of MedMen Corp Redeemable Shares | 75,460,832 | 3,827,900 |
Equity Component of Debt Modification - Non-Controlling Interest | 0 | 5,331,969 |
Release of Investments for Liabilities | 750,000 | 0 |
Shares Issued to Settle Debt and Accrued Interest | 7,228,135 | 5,684,851 |
Shares Issued to Settle Accounts Payable and Liabilities | 2,755,853 | 4,849,310 |
Equity Component of Debt - New and Amended | 5,583,407 | 23,781,053 |
Accrued Interest Added to Senior Secured Convertible Debt | 0 | 10,247,255 |
Deferred Tax Impact on Conversion Feature | $ 20,386,014 | $ 260 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 9 Months Ended |
Mar. 27, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Note 1. NATURE OF OPERATIONS | 1. NATURE OF OPERATIONS MedMen Enterprises Inc. (“MedMen Enterprises” or the “Company”), formerly known as Ladera Ventures Corp., was incorporated under the Business Corporations Act (British Columbia) on May 21, 1987. The Company’s Class B Subordinate Voting Shares are listed on the Canadian Securities Exchange under the symbol “MMEN”, on the OTCQX under the symbol “MMNFF”, on the Frankfurt Stock Exchange under the symbol “OJS.F”, on the Stuttgart Stock Exchange under the symbol “OJS.SG”, on the Munich Stock Exchange under the symbol “OJS.MU”, on the Berlin Stock Exchange under the symbol “OJS.BE” and on the Dusseldorf Stock Exchange under the symbol “OJS.DU”. The head office and principal address of the Company is 10115 Jefferson Boulevard, Culver City, California 90232. The Company’s registered and records office address is 885 West Georgia Street, Suite 2200, Vancouver, British Columbia Canada V6C 3E8. The Company operates through its principal wholly-owned subsidiaries, MM CAN USA, Inc., a California corporation (“MM CAN” or “MedMen Corp”), and MM Enterprises USA, LLC, a Delaware limited liability company (“MM Enterprises USA”). MM CAN was converted into a California corporation (from a Delaware corporation) on May 16, 2018 and is based in Culver City, California. The head office and principal address of MM CAN is 10115 Jefferson Boulevard, Culver City, California 90232. MM Enterprises USA was formed on January 9, 2018 and is based in Culver City, California. The head office and principal address of MM Enterprises USA is 10115 Jefferson Boulevard, Culver City, California 90232. MM Enterprises USA was formed as a joint venture whose contributors were MMMG, LLC (“MMMG”); MedMen Opportunity Fund, LP (“Fund I”); MedMen Opportunity Fund II, LP (“Fund II”), The MedMen of Nevada 2, LLC (“MMNV2”); DHSM Investors, LLC (“DHS Owner”); and Bloomfield Partners Utica, LLC (“Utica Owner”) (collectively, the “MedMen Group of Companies”). On January 24, 2018, pursuant to a Formation and Contribution Agreement (the “Agreement”), a roll-up transaction was consummated whereby the assets and liabilities of the MedMen Group of Companies were transferred into MM Enterprises USA. In return, the MedMen Group of Companies received 217,184,382 MM Enterprises USA Class B Units. The Agreement was entered into by and among MM Enterprises Manager, LLC, the sole manager of MM Enterprises USA; MMMG; Fund I; Fund II; MMNV2; DHS Owner; and Utica Owner. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Mar. 27, 2021 | |
Accounting Policies [Abstract] | |
Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Preparation The accompanying unaudited interim Condensed Consolidated Financial Statements have been prepared on a going concern basis in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). The unaudited interim 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 (consisting only of normal recurring adjustments) considered necessary for a fair presentation of the consolidated financial position of the Company as of March 27, 2021 and June 27, 2020, the consolidated results of operations for the three and nine months ended March 27, 2021 and March 28, 2020, and the consolidated statements of cash flows for the nine months ended March 27, 2021 and March 28, 2020 have been included. The accompanying unaudited interim 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, prepared in accordance with GAAP, have been condensed or omitted in accordance with SEC rules and regulations within the instruction to Form 10-Q and Article 10 of Regulation S-X. The financial data presented herein should be read in conjunction with the audited Consolidated Financial Statements and accompanying notes included in Item 13 of the registration statement on Form 10 for the fiscal year ended June 27, 2020. Going Concern As reflected in the unaudited interim Condensed Consolidated Financial Statements, the Company had an accumulated deficit and a negative net working capital (current liabilities greater than current assets) as of March 27, 2021, as well as a net loss and negative cash flow from operating activities for the reporting period then ended. These factors raise substantial doubt about the Company’s ability to continue as a going concern for at least one year from the issuance of these unaudited interim Condensed Consolidated Financial Statements. Management believes that substantial doubt of our ability to meet our obligations for the next twelve months from the date these financial statements were first made available has been alleviated due to, but not limited to, (i) capital raised between May 2021 and May 2022, (ii) restructuring plans that have already been put in place to reduce corporate-level expenses, (iii) debt amendments that have been agreed to with lenders and landlords to defer cash interest and rent payments, (iv) rationalization of capital expenditures to correlate to our new store opening strategy, (v) plans to divest non-core assets to raise non-dilutive capital and (vi) enhancements to its digital offering, including direct-to-consumer delivery and curbside pick-up in light of COVID-19. However, management cannot provide any assurances that we will be successful in accomplishing any of our plans. Management also cannot provide any assurance as to unforeseen circumstances that could occur at any time within the next twelve months or thereafter which could increase our need to raise additional capital on an immediate basis. The Company will continually monitor its capital requirements based on its capital and operational needs and the economic environment and may raise new capital as necessary. The Company’s ability to continue as a going concern will depend on its ability to raise additional equity or debt in the private or public markets, reducing operating expenses, divesting of certain non-core assets, and achieving cash flow profitability. While the Company has been successful in raising equity and debt to date, there can be no assurances that the Company will be successful in completing a financing in the future. If the Company is unable to raise additional capital whenever necessary, it may be forced to divest additional assets to raise capital and/or pay down its debt, amend its debt agreements, which could potentially have a dilutive effect on the Company’s shareholders, further reduce operating expenses and temporarily pause the opening of new store locations. Furthermore, COVID-19 and the impact the global pandemic has had and will continue to have on the broader retail environment could also have a significant impact on the Company’s financial operations. COVID-19 The COVID-19 pandemic promoted various recommendations and safety measures from governmental authorities to try and limit the pandemic. The response of governmental authorities is having a significant impact on the private sector and individuals, including unprecedented business, employment and economic disruptions. During the current reporting period, aspects of the Company’s business continue to be affected by the COVID-19 pandemic, with the Company’s offices and retail stores operating within local rules and regulations. While the ultimate severity of the outbreak and its impact on the economic environment is uncertain, the Company is monitoring this closely. In the event that the Company were to experience widespread transmission of the virus at one or more of the Company’s store or other facilities, the Company could suffer reputational harm or other potential liability. Further, the Company’s business operations may be materially and adversely affected if a significant number of the Company’s employees are impacted by the virus. Emerging Growth Company The Company is an emerging growth company as defined in the Jumpstart Our Business Startups Act under which emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies. Functional Currency The Company and its subsidiaries’ functional currency, as determined by management, is the United States (“U.S.”) dollar. These unaudited interim Condensed Consolidated Financial Statements are presented in U.S. dollars as this is the primary economic environment of the group. All references to “C$” refer to Canadian dollars. Significant Accounting Policies The significant accounting policies and critical estimates applied by the Company in these unaudited interim Condensed Consolidated Financial Statements are the same as those applied in the Company’s audited Consolidated Financial Statements and accompanying notes included in Item 13 of the registration statement on Form 10 for the fiscal year ended June 27, 2020, unless otherwise disclosed in these accompanying notes to the unaudited interim Condensed Consolidated Financial Statements for the nine months ended March 27, 2021. Restricted Cash Restricted cash balances are those which meet the definition of cash and cash equivalents but are not available for use by the Company. As of March 27, 2021 and June 27, 2020, restricted cash was $730 and $1,029, respectively, which is used to pay for lease costs and costs incurred related to building construction in Reno, Nevada. This account is managed by a contractor and the Company is required to maintain a certain minimum balance. Down-Round Features The Company calculates down-round features under Accounting Standards Update (“ASU”) No. 2017-11 (“ASU 2017-11”), “Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features” Allocation of Interest to Discontinued Operations Under ASC 205-20 “ Discontinued Operations Note 24 – Discontinued Operations 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 loss 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, DSU, restricted stock grants, warrants and stock options issued. Recently Adopted Accounting Standards In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments” In January 2017, the FASB issued ASU No. 2017-04 “Intangibles— Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” In August 2018, the FASB issued ASU 2018-13, “ Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement Recently Issued Accounting Standards In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes (Topic 740)”, In January 2020, the FASB issued ASU 2020-01, “ Investments – Equity Securities (Topic 321) Investments – Equity Method and Joint Ventures (Topic 323) Derivatives and Hedging (Topic 815) In August 2020, the FASB issued ASU 2020-06, “ Debt – Debt with Conversion and Other Options (Subtopic 470-20) Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible instruments and contracts in an Entity’s Own Equity |
INVENTORIES
INVENTORIES | 9 Months Ended |
Mar. 27, 2021 | |
Inventory Disclosure [Abstract] | |
Note 3. INVENTORIES | 3. INVENTORIES As of March 27, 2021 and June 27, 2020, inventory consists of the following: March 27, June 27, 2021 2020 Raw Materials $ 965,641 $ 1,790,050 Work-in-Process 4,760,097 6,229,152 Finished Goods 11,321,882 10,957,776 Total Inventory $ 17,047,620 $ 18,976,978 During the three months ended March 27, 2021, the Company recognized an impairment of approximately $1,714,000 to write down inventory to its net realizable value. |
OTHER CURRENT ASSETS
OTHER CURRENT ASSETS | 9 Months Ended |
Mar. 27, 2021 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Note 4. OTHER CURRENT ASSETS | 4. OTHER CURRENT ASSETS As of March 27, 2021 and June 27, 2020, other current assets consist of the following: March 27, June 27, 2021 2020 Investments $ 3,036,791 $ 3,786,791 Excise Tax Receivable - 5,254,595 Note Receivable (1) 1,670,038 - Other Current Assets 3,470,374 64,071 Total Other Current Assets $ 8,177,203 $ 9,105,457 (1) See “Note 5 – Assets Held for Sale” for further information. As of March 27, 2021 and June 27, 2020, investments included in other current assets consist of the following: The Hacienda Old Pal Other Investments TOTAL Fair Value as of June 27, 2020 $ 750,000 $ 1,970,000 $ 1,066,791 $ 3,786,791 Settlement of Liabilities (750,000 ) - - (750,000 ) Fair Value as of March 27, 2021 $ - $ 1,970,000 $ 1,066,791 $ 3,036,791 In August 2020, the Company entered into an agreement to exchange all of its investment in The Hacienda Company, LLC to settle outstanding balances totaling approximately $750,000. As of March 27, 2021, the Company’s investment balance in The Hacienda Company, LLC was nil. The Company determined that the fair value of its investment in Old Pal LLC was $1,970,000 as of March 27, 2021. The fair value of investments included in other current assets is considered a Level 3 categorization in the fair value hierarchy. Investments are measured at fair value using a market approach that is based on unobservable inputs. |
ASSETS HELD FOR SALE
ASSETS HELD FOR SALE | 9 Months Ended |
Mar. 27, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Note 5. ASSETS HELD FOR SALE | 5. ASSETS HELD FOR SALE A reconciliation of the beginning and ending balances of assets held for sale for the nine months ended March 27, 2021 is as follows: PharmaCann Assets (1) Available for Sale Subsidiaries (2) Discontinued Operations (3) TOTAL Balance at Beginning of Period $ 212,400 $ 12,066,428 $ 71,849,729 $ 84,128,557 Transferred In - 6,614,986 - 6,614,987 Gain on the Sale of Assets Held for Sale - 10,709,999 - 10,709,999 Proceeds from Sale - (24,750,298 ) - (24,750,298 ) Ongoing Activity from Discontinued Operations - (4,641,116 ) (7,845,258 ) (12,486,373 ) Balance at End of Period $ 212,400 $ - $ 64,004,471 $ 64,216,871 (1) During the year ended June 27, 2020, PharmaCann LLC, (“PharmaCann”) transferred 100% of the membership interests for MME Evanston Retail, LLC (“Evanston”), PharmaCann Virginia, LLC (“Staunton”), and PC 16280 East Twombly LLC (“Hillcrest”). As of March 27, 2021, the Company has 100% of membership interests in Staunton which holds land and a license for a vertically-integrated facility in Staunton, Virginia. The Staunton land and license were classified as assets held for sale in accordance with ASC 360, “Long-Lived Assets Classified as Held for Sale” (“ASC 360”) and are measured at the lower of its carrying amount or fair value less costs to sell (“FVLCTS”) which was determined as $212,400 and $0, respectively, as of March 27, 2021. (2) Long-lived assets classified as held for sale that do not qualify as discontinued operation and classified as held for sale. Significant classes of assets and liabilities are presented in the notes to the unaudited interim Condensed Consolidated Financial Statements in accordance with ASC 360-10, “Impairment and Disposal of Long-Lived Assets” (“ASC 360-10”). (3) See “Note 24 - Discontinued Operations” for further information. During the nine months ended March 27, 2021, the Company agreed to transfer all outstanding membership interests in MME Evanston Retail, LLC (“Evanston”), for a dispensary operation located in Evanston, Illinois, to an unaffiliated third party (“Purchaser”). The Company received an aggregate consideration of $20,000,000, of which, $10,000,000 cash was received at closing on July 1, 2020 (“Closing Date”), an additional $8,000,000 cash was received on November 17, 2020 and an additional $2,000,000 in the form of a secured promissory note payable three months following the Closing Date in exchange for all of the Company’s membership interests in Evanston. As of March 12, 2021 (“Amendment Date”), the secured promissory note was amended to waive any default arising from non-payment of principal and interest prior to the Amendment Date if Purchaser pays principal of $1,000,000 and all accrued interest of 2% per annum through the Amendment Date. Interest will accrue at 9% per annum following the Amendment Date. As of March 27, 2021, the Company received cash payment in accordance with the amended secured promissory noted. On August 10, 2020 (“Effective Date”), all operational control and risk of loss was transferred to the Purchaser and the Company had no further obligation to fund operations of Evanston through a Consulting Agreement. Management performed an assessment and determined that the Company no longer has a controlling financial interest as of the Effective Date. The transfer of the cannabis license is pending regulatory approval as of the issuance of these unaudited interim Condensed Consolidated Financial Statements and the Company will take all commercially reasonable steps to maintain all permits for Evanston to operate its business. The Company recognized a gain upon sale of membership interests of $12,415,479 for the difference between the aggregate consideration and the book value of the assets as of the disposition date, less direct costs to sell, which is recognized on the unaudited interim Condensed Consolidated Statements of Operations during the nine months ended March 27, 2021. During the nine months ended March 27, 2021, the Company decided to divest two cannabis licenses and entered into separate agreements to sell 100% of its membership interests in these two locations, located in California. On June 26, 2020, the Company entered into a non-binding term sheet for the retail location located in Seaside, California for an aggregate sales price of $1,500,000 wherein $750,000 is to be paid upon the date of close in addition to $750,000 paid in equal monthly installments over twelve months through a promissory note. The transaction closed in October 2020 and the Company transferred all outstanding membership interests in PHSL, LLC. Upon deconsolidation, the Company will not have any continuing involvement with the former subsidiary. The Company recognized a loss upon sale of membership interests of $332,747 for the difference between the aggregate consideration and the book value of the assets as of the disposition date, less direct costs to sell, which is recognized on the unaudited interim Condensed Consolidated Statements of Operations during the nine months ended March 27, 2021. In December 2020, the Company entered into a purchase agreement for the sale of its membership interests in a retail operation located in Grover Beach, California. The Company received an aggregate consideration of $3,750,000 in which $3,500,000 cash was received thirty days following the closing on March 5, 2021, an additional equity consideration equal to $250,000 was recognized as a gain upon sale of membership interests for a total gain of $255,391 for the difference between the aggregate consideration and the book value of the assets as of the disposition date, less direct costs to sell, which is recognized on the unaudited interim Condensed Consolidated Statements of Operations during the three and nine months ended March 27, 2021. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Mar. 27, 2021 | |
Property, Plant and Equipment [Abstract] | |
Note 6. PROPERTY AND EQUIPMENT | 6. PROPERTY AND EQUIPMENT As of March 27, 2021 and June 27, 2020, property and equipment consists of the following: March 27, June 27, 2021 2020 Land and Buildings $ 37,421,326 $ 37,400,378 Finance Lease Right-of-Use Assets 9,124,138 26,074,429 Furniture and Fixtures 12,428,701 12,393,369 Leasehold Improvements 59,551,369 56,026,595 Equipment and Software 25,823,935 25,379,767 Construction in Progress 28,866,937 36,833,422 Total Property and Equipment 173,216,406 194,107,960 Less Accumulated Depreciation (39,039,417 ) (30,484,865 ) Property and Equipment, Net $ 134,176,989 $ 163,623,095 Depreciation expense related to continuing operations of $3,540,369 and $12,116,847 was recorded for the three and nine months ended March 27, 2021, respectively, of which $42,452 and $383,618, respectively, is included in cost of goods sold. Depreciation expense related to continuing operations of $3,680,139 and $13,331,921 was recorded for the three and nine months ended March 28, 2020, respectively, of which $536,729 and $1,640,176, respectively, is included in cost of goods sold. The amount of depreciation recognized for the right of use assets for capital leases during the three and nine months ended March 27, 2021 was $438,557 and $835,497, respectively, see “Note 11 – Leases” During the three and nine months ended March 28, 2020, borrowing costs totaling $2,106,988 and $4,415,716, respectively, were capitalized using an average capitalization rate of 13.7% and 15.1%, respectively. Borrowing costs were not capitalized as there were no active construction projects in progress during the three and nine months ended March 27, 2021. In addition, during the three and nine months ended March 27, 2021, total labor related costs of $52,351 and $559,515, respectively, were capitalized to Construction in Progress, of which $6,992 and $155,378, respectively, was share-based compensation. In addition, during the three and nine months ended March 28, 2020, total labor related costs of $137,558 and $913,627, respectively, were capitalized to Construction in Progress, of which $19,475 and $192,130, respectively, was share-based compensation. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 9 Months Ended |
Mar. 27, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Note 7. INTANGIBLE ASSETS | 7. INTANGIBLE ASSETS As of March 27, 2021 and June 27, 2020, intangible assets consist of the following: March 27, June 27, 2021 2020 Dispensary Licenses $ 118,881,616 $ 125,565,281 Customer Relationships 15,927,600 15,927,600 Management Agreement 7,594,937 7,594,937 Capitalized Software 9,343,352 9,255,026 Intellectual Property 6,276,955 8,520,121 Total Intangible Assets 158,024,460 166,862,965 Dispensary Licenses (20,685,860 ) (15,860,670 ) Customer Relationships (14,210,226 ) (6,261,515 ) Management Agreement (715,761 ) (565,972 ) Capitalized Software (4,071,756 ) (2,273,432 ) Intellectual Property (3,006,772 ) (5,496,231 ) Less Accumulated Amortization (42,690,375 ) (30,457,820 ) Intangible Assets, Net $ 115,334,085 $ 136,405,145 The Company recorded amortization expense related to continuing operations of $4,452,573 and $13,104,322 for the three and nine months ended March 27, 2021, respectively. The Company recorded amortization expense related to continuing operations of $4,333,212 and $10,660,164 for the three and nine months ended March 28, 2020, respectively. During the three months ended March 27, 2021, the Company recorded impairment on an intellectual property asset in the amount of $1,573,563. During the three and nine months ended March 27, 2021, $24,832 and $62,951, respectively, of share-based compensation was capitalized to capitalized software. During the three and nine months ended March 28, 2020, $41,293 and $313,535, respectively, of share-based compensation was capitalized to capitalized software. |
OTHER ASSETS
OTHER ASSETS | 9 Months Ended |
Mar. 27, 2021 | |
Other Income and Expenses [Abstract] | |
Note 8. OTHER ASSETS | 8. OTHER ASSETS As of March 27, 2021 and June 27, 2020, other assets consist of the following: March 27, June 27, 2021 2020 Long-Term Security Deposits for Leases $ 4,817,042 $ 8,177,871 Loans and Other Long-Term Deposits 7,808,326 7,568,738 Other Assets 5,593 53,648 Total Other Assets $ 12,630,961 $ 15,800,257 |
ACCOUNTS PAYABLE AND ACCRUED LI
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | 9 Months Ended |
Mar. 27, 2021 | |
Payables and Accruals [Abstract] | |
Note 9. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | 9. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES As of March 27, 2021 and June 27, 2020, accounts payable and accrued liabilities consist of the following: March 27, June 27, 2021 2020 Accounts Payable $ 32,203,779 $ 54,916,904 Accrued Liabilities 14,889,269 10,404,629 Other Accrued Liabilities 10,994,206 10,103,628 Total Accounts Payable and Accrued Liabilities $ 58,087,254 # $ 75,425,161 |
OTHER CURRENT LIABILITIES
OTHER CURRENT LIABILITIES | 9 Months Ended |
Mar. 27, 2021 | |
Retirement Benefits [Abstract] | |
Note 10. OTHER CURRENT LIABILITIES | 10. OTHER CURRENT LIABILITIES As of March 27, 2021 and June 27, 2020, other current liabilities consist of the following: March 27, June 27, 2021 2020 Accrued Interest Payable $ 790,906 $ 9,051,650 Contingent Consideration 87,893 8,951,801 Derivatives 5,707,715 546,076 Other Current Liabilities 14,135,611 1,728,854 Total Other Current Liabilities $ 20,722,125 $ 20,278,381 Contingent Consideration Contingent consideration recorded relates to a business acquisition during the year ended June 27, 2020. The contingent consideration related to the acquisition of One Love Beach Club is based upon fair value of the additional shares required to be paid upon the expiration of the lock-up and is based upon the fair market value of the Company’s trading stock and is considered a Level 1 categorization in the fair value hierarchy. Contingent consideration classified as a liability and measured at fair value in accordance with ASC 480, “Distinguishing Liabilities from Equity” Derivative Liabilities During the three months ended March 27, 2021, the Company issued the 50,000,000 warrants related to a private placement. The exercise price of the warrants is denominated in Canadian dollars. See “ Note 14 - Shareholders’ Equity – Private Placement “Derivatives and Hedging” The following are the warrants issued related to the financing transactions that were accounted for as derivative liabilities: Number of Warrants September Bought Deal Equity Financing 7,840,909 December Bought Deal Equity Financing 13,640,000 March 2021 Private Placement 50,000,000 (1) (2) 71,480,909 (1) During the three months ended March 27, 2021, the Company issued 50,000,000 warrants for Subordinate Voting Shares with an exercise price of C$0.50 per warrant and an expiration date of March 27, 2024. The exercise price of the warrants was denominated in a price other than the Company’s functional currency. In accordance with ASC 815, a share warrant denominated in a price other than the functional currency of the Company fails to meet the definition of equity. Accordingly, such a contract or instrument would be accounted for as derivative liabilities and measured at fair value with changes in fair value recognized in the unaudited interim Condensed Consolidated Statements of Operations at each period-end. (2) See “Note 14 - Shareholders’ Equity – Private Placement” for further information. A reconciliation of the beginning and ending balance of derivative liabilities and change in fair value of derivative liabilities for the nine months ended March 27, 2021 is as follows: March 27, 2021 Balance at Beginning of Period $ 546,076 Initial Recognition of Derivative Liabilities 7,228,134 Change in Fair Value of Derivative Liabilities (2,066,495 ) Balance at End of Period $ 5,707,715 The fair value of the September and December bought deal warrants was measured based on Level 1 inputs on the fair value hierarchy since there are quoted prices in active markets for these warrants. The Company used the closing price of the publicly-traded warrants to estimate fair value of the derivative liability as of March 27, 2021 for those warrants. 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 90.01 % Risk-Free Annual Interest Rate 0.06 % Expected Life 1.00 Share Price 0.33 Exercise Price 0.40 |
LEASES
LEASES | 9 Months Ended |
Mar. 27, 2021 | |
Leases [Abstract] | |
Note 11. LEASES | 11. LEASES In accordance with ASU 2016-02 “Leases”, the Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets and accrued obligations under operating lease (current and non-current) liabilities in the unaudited interim Condensed Consolidated Balance Sheets. Finance lease ROU assets are included in property and equipment, net and accrued obligations under finance lease (current and noncurrent) liabilities in the unaudited interim Condensed Consolidated Balance Sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets are classified as a finance lease or an operating lease. The Company classifies a lease as an operating lease when it does not meet any of the criteria of a finance lease as set forth by ASU 2016-02. ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Most operating leases contain renewal options that provide for rent increases based on prevailing market conditions. The Company has lease extension terms at its properties that have either been extended or are likely to be extended. The terms used to calculate the ROU assets for these properties include the renewal options that the Company is reasonably certain to exercise. The below are the details of the lease cost and other disclosures regarding the Company’s leases for the three and nine months ended March 27, 2021 and March 28, 2020: Three Months Ended Nine Months Ended March 27, March 28, March 27, March 28, 2021 2020 2021 2020 Finance Lease Cost: Amortization of Finance Lease Right-of-Use Assets $ 438,557 $ 586,376 $ 835,497 $ 3,203,300 Interest on Lease Liabilities 2,077,724 1,635,017 4,061,842 4,617,716 Operating Lease Cost 7,512,753 6,377,596 20,935,916 19,076,003 Total Lease Expenses $ 10,029,034 $ 8,598,989 $ 25,833,255 $ 26,897,019 2021 2020 2021 2020 Gain on Sale and Leaseback Transactions, Net $ - $ - $ - $ (704,207 ) Cash Paid for Amounts Included in the Measurement of Lease Liabilities: Financing Cash Flows from Finance Leases $ - $ 509,844 $ - $ 807,432 Operating Cash Flows from Operating Leases $ 1,712,630 $ 1,625,567 $ 15,611,252 $ 16,892,734 Non-Cash Additions to Right-of-Use Assets and Lease Liabilities: Recognition of Right-of-Use Assets for Finance Leases $ - $ - $ - $ 45,614,041 Recognition of Right-of-Use Assets for Operating Leases $ - $ 8,131,728 $ - $ 144,602,158 The weighted-average remaining lease term and discount rate related to the Company’s finance lease liabilities as of March 27, 2021 were 48 years and 17.77%, respectively. The weighted-average remaining lease term and discount rate related to the Company’s operating lease liabilities as of March 27, 2021 were 5 years and 10.25%, respectively. The Company’s lease discount rates are generally based on estimates of its incremental borrowing rate, as the discount rates implicit in the Company’s leases cannot be readily determined. Future lease payments under non-cancellable operating leases and finance leases as of March 27, 2021 are as follows: Fiscal Year Ending Operating Leases Finance Leases June 26, 2021 $ 5,504,585 $ 1,302,684 June 25, 2022 22,989,719 5,324,591 June 24, 2023 23,241,907 5,484,327 June 29, 2024 27,249,872 9,860,306 June 28, 2025 21,096,035 6,522,077 Thereafter 102,173,727 1,076,074,995 Total Lease Payments 202,255,845 1,104,568,980 Less Interest (96,771,980 ) (1,075,923,388 ) Present Value of Lease Liability $ 105,483,865 $ 28,645,592 Finance leases noted above contain required security deposits, refer to “Note 8 – Other Assets” Lease Deferral Arrangements During the nine months ended March 27, 2021, the Company modified its existing lease arrangements with the Treehouse Real Estate Investment Trust (the “REIT”) in which the REIT agreed to defer a portion of total current monthly base rent on certain cultivation facilities and ground leases for the 36-month period between July 1, 2020 and July 1, 2023 for a total of fourteen properties. Amendments for eight of the properties were accounted for as lease modifications in accordance with ASC 842, “ Leases Debt Note 12 – Notes Payable |
NOTES PAYABLE
NOTES PAYABLE | 9 Months Ended |
Mar. 27, 2021 | |
Debt Disclosure [Abstract] | |
Note 12. NOTES PAYABLE | 12. NOTES PAYABLE As of March 27, 2021 and June 27, 2020, notes payable consist of the following: March 27, June 27, 2021 2020 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. $ 83,400,000 $ 83,576,661 Non-revolving, senior secured term notes dated between October 1, 2018 and October 30, 2020, issued to accredited investors, which mature on January 31, 2022, and bear interest at a rate of 15.5% and 18.0% per annum. 104,436,180 77,675,000 Convertible debentures dated between September 16, 2020 and December 17, 2020, issued to accredited investors and qualified institutional buyers, which mature two years from issuance, and bear interest at a rate of 7.5% per annum. 5,000,000 - Promissory notes dated between January 15, 2019 through March 29, 2019, issued for deferred payments on acquisitions, which mature on varying dates from July 31, 2021 to April 1, 2022 and bear interest at rates ranging from 8.0% to 9.0% per annum. 3,762,500 16,173,250 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 10.0% per annum and require minimum monthly payments of $15,660 and $18,471. 2,233,720 2,339,564 Other 15,418 15,418 Total Notes Payable 198,847,818 179,779,893 Less Unamortized Debt Issuance Costs and Loan Origination Fees (8,832,434 ) (10,781,288 ) Net Amount $ 190,015,384 $ 168,998,605 Less Current Portion of Notes Payable (97,169,640 ) (16,188,668 ) Notes Payable, Net of Current Portion $ 92,845,744 $ 152,809,937 A reconciliation of the beginning and ending balances of notes payable for the nine months ended March 27, 2021 is as follows: Balance at Beginning of Period $ 168,998,605 Cash Additions 15,830,279 Non-Cash Addition - Debt Modification 877,439 Debt Discount Recognized on Modification (977,370 ) Extinguishment of Debt (12,173,250 ) Paid-In-Kind Interest Capitalized 15,178,462 Cash Payments (660,094 ) Equity Component of Debt- New and Amended (5,583,407 ) Cash Paid for Debt Issuance Costs 99,931 Accretion of Debt Discount included in Discontinued Operations 5,834,043 Accretion of Debt Discount 2,590,746 Balance at End of Period $ 190,015,384 Less Current Portion of Notes Payable (97,169,640 ) Notes Payable, Net of Current Portion $ 92,845,744 Amendments to Senior Secured Term Loan Facility On July 2, 2020, the Company completed the amendment of its existing term loan facility (the “Facility”) in the principal amount of $77,675,000 with funds managed by Hankey Capital and with an affiliate of Stable Road Capital (the “Lenders”) wherein the entirety of the interest at a rate of 15.5% per annum shall accrue monthly to the outstanding principal as payment-in-kind effective March 1, 2020 through July 2, 2021. Thereafter until maturity on January 31, 2022, one-half of the interest (7.75% per annum) shall be payable monthly in cash and one-half of the interest (7.75% per annum) shall be paid-in-kind. In addition, the Company may request an increase to the Facility through December 31, 2020 to be funded through incremental term loans. Certain reporting and financial covenants were added, and the minimum liquidity covenant was waived until September 30, 2020 wherein the amount of required cash balance thereafter was amended. The amendment to the Facility was not deemed to be a substantial modification under ASC 470-50, “Modifications and Extinguishments” The Company incurred an amendment fee of $834,000 that was added to the outstanding principal balance. As consideration for the amendment to the Facility, the Company issued approximately 20,227,863 warrants exercisable at $0.34 per share until July 2, 2025. The Company also cancelled 20,227,863 existing warrants held by the lenders exercisable at $0.60 per share until December 31, 2022. The warrants may be exercised at the election of their holders on a cashless basis. The warrants issued in connection with the term loan facility met the scope exception under ASC 815 and are classified as equity instruments. The change in fair value of the warrants was recorded as a debt discount in connection with the Facility. As a result of the modification, the Company recorded an additional debt discount of $906,436 related to the change in terms of the warrants. See “Note 15 – Share-Based Compensation” On September 16, 2020, the Company entered into further amendments wherein the amount of funds available under the Facility was increased by $12,000,000, of which $5,700,000 was fully committed by the lenders through October 31, 2020. The additional amounts are funded through incremental term loans at an interest rate of 18.0% per annum wherein 12.0% shall be paid in cash monthly in arrears and 6.0% shall accrue monthly as payment-in-kind. In connection with each incremental draw under the amended Facility, the Company shall issue warrants equal to 200% of the incremental term loan amount, divided by the greater of (a) $0.20 per share and (b) 115% multiplied by the volume-weighted average trading price (“VWAP”) of the shares for the five consecutive trading days ending on the trading day immediately prior to the applicable funding date of the second tranche, which shall be the exercise price of the issued warrant. Such warrants are subject to a down round feature wherein the exercise price would be decreased in the event of the exercise of a down-round price reset of select warrants under the senior secured convertible credit facility with Gotham Green Partners (“GGP”). Refer to “ Note 13 – Senior Secured Convertible Credit Facility On September 16, 2020, the Company closed on an incremental term loan of $3,000,000 under the amended Facility and issued 30,000,000 warrants with an exercise price of $0.20 per share until September 16, 2025. On October 30, 2020, the Company closed on an incremental term loan of $7,705,279 under the amended Facility and issued 77,052,790 warrants with an exercise price of $0.20 per share until September 14, 2025. The warrants may be exercised at the election of their holders on a cashless basis and are classified as equity instruments. See “Note 15 – Share-Based Compensation” On September 16, 2020 and September 28, 2020, the down round feature on the warrants issued in connection with the incremental term loan of $3,000,000 on September 16, 2020 was triggered wherein the exercise price was adjusted to $0.17 and $0.15 per share, respectively. The value of the effect of the down round feature was determined to be $405,480 and recognized as an increase in additional paid-in capital. Amendment to Promissory Note On February 25, 2021, the Company completed the second amendment of its existing promissory note in the principal amount of $3,500,000 issued in connection with the acquisition of Viktoriya’s Medical Supplies LLC d/b/a Buddy’s Cannabis wherein the maturity date was amended to the earlier of April 1, 2022 or in the event of default. In conjunction with the amendment to promissory note, the Company issued Subordinate Voting Shares in the aggregate amount of $2,000,000 to the lender. The balance of the promissory note will bear interest at a rate of 9.0% per annum and be paid monthly commencing on May 1, 2021 until the amended maturity date. The second amendment to the existing promissory note was deemed to be a substantial modification under ASC 470-50 and a loss on extinguishment of $2,410,504 was recorded in the unaudited interim Condensed Consolidated Statements of Operations for the three and nine months ended March 27, 2021. Acquisition Promissory Note During the three months ended March 27, 2021, as a result of the legal proceedings and decisions by the applicable governing bodies, the Company derecognized an acquisition promissory note and its accrued interest in the aggregate amount of $13,375,430 and recorded a gain on disposal of assets for the same amount which is recorded as a component of net (income) loss from discontinued operations for the three and nine months ended March 27, 2021. Refer to the May 2020 litigation disclosed in “ Note 21 – Commitments and Contingences Unsecured Convertible Facility On September 16, 2020, the Company entered into an unsecured convertible debenture facility for total available proceeds of $10,000,000 wherein the convertible debentures shall have a conversion price equal to the closing price on the trading day immediately prior to the closing date, a maturity date of 24 months from the date of issuance and will bear interest at a rate of 7.5% per annum payable semi-annually in cash. The unsecured facility is callable in additional tranches in the amount of $1,000,000 each, up to a maximum of $10,000,000 under all tranches. The timing of additional tranches can be accelerated based on certain conditions. The Company has the right to prepay, in whole or in part, the outstanding principal amount and accrued interest prior to maturity, upon payment of 7.5% of the principal amount being repaid, less the amount of interest paid during the year of prepayment. The debentures provide for the automatic conversion into Subordinate Voting Shares in the event that the VWAP is greater than $0.25 on the CSE for 45 consecutive trading days, at a conversion price per Subordinate Voting Share equal to $0.17. On September 16, 2020, the Company closed on an initial $1,000,000 of the facility with a conversion price of $0.17 per Subordinate Voting Share. In connection with the initial tranche, the Company issued 3,293,413 warrants with an exercise price of $0.21 per share. On September 28, 2020, the Company closed on a second tranche of $1,000,000 under its existing unsecured convertible facility with a conversion price of $0.15 per Subordinate Voting Share. In connection with the second tranche, the Company issued 3,777,475 warrants with an exercise price of $0.17 per Subordinate Voting Share. On November 20, 2020, the Company closed on a third tranche of $1,000,000 under the facility with a conversion price of $0.15 per Subordinate Voting Share. In connection with the third tranche, the Company issued 3,592,425 warrants with an exercise price of $0.17 per share. On December 17, 2020, the Company closed on a fourth tranche of $1,000,000 under the facility with a conversion price of $0.15 per Subordinate Voting Share. In connection with the fourth tranche, the Company issued 3,597,100 warrants with an exercise price of $0.18 per share. On January 29, 2021, the Company closed on a fifth tranche of $1,000,000 under its existing unsecured convertible facility with a conversion price of $0.16 per Subordinate Voting Share. In connection with the fifth tranche, the Company issued 3,355,000 warrants with an exercise price of $0.19 per share. Under ASC 815, the conversion option and warrants were recorded as an equity instrument. As of March 27, 2021, the relative fair value of the warrants with a value of $799,949 has been recorded to equity. On February 10, 2021, the Company entered into an agreement with Wicklow Capital, a related party, to issue additional warrants for Subordinate Voting Shares within 12 months based on the borrowed amount of the unsecured convertible facility tranches. These warrants will consist of 644,068, 761,205, 775,510, 741,260, and 693,575 warrants with an exercise price of $0.21, $0.18, $0.17, $0.18, and $0.19, respectively. The commitment to issue warrants related to the existing unsecured convertible facility was deemed to be a substantial modification of the facility under ASC 470-50 and a loss on extinguishment of $4,010,022 was recorded in the unaudited interim Condensed Consolidated Statements of Operations for the three and nine months ended March 27, 2021. Financing Liability In connection with the Company’s failed sale and leaseback transactions described in “Note 11 – Leases” |
SENIOR SECURED CONVERTIBLE CRED
SENIOR SECURED CONVERTIBLE CREDIT FACILITY | 9 Months Ended |
Mar. 27, 2021 | |
Risks and Uncertainties [Abstract] | |
Note 13. SENIOR SECURED CONVERTIBLE CREDIT FACILITY | 13. SENIOR SECURED CONVERTIBLE CREDIT FACILITY As of March 27, 2021 and June 27, 2020, senior secured convertible credit facility consists of the following: March 27, June 27, Tranche 2021 2020 Senior secured convertible notes dated April 23, 2019, issued to accredited investors, which mature on April 23, 2022 and bear interest at LIBOR plus 6.0% per annum. 1A $ 20,674,403 $ 21,660,583 Senior secured convertible notes dated May 22, 2019, issued to accredited investors, which mature on April 23, 2022 and bear interest at LIBOR plus 6.0% per annum. 1B 89,039,556 86,053,316 Senior secured convertible notes dated July 12, 2019, issued to accredited investors, which mature on April 23, 2022 and bear interest at LIBOR plus 6.0% per annum. 2 28,953,899 26,570,948 Senior secured convertible notes dated November 27, 2019, issued to accredited investors, which mature on April 23, 2022 and bear interest at LIBOR plus 6.0% per annum. 3 11,211,533 10,288,815 Senior secured convertible notes dated March 27, 2020, issued to accredited investors, which mature on April 23, 2022 and bear interest at LIBOR plus 6.0% per annum. 4 13,609,724 12,500,000 Amendment fee converted to senior secured convertible notes dated October 29, 2019, which mature on April 23, 2022 and bear interest at LIBOR plus 6.0% per annum. - 21,165,550 19,423,593 Senior secured convertible notes dated April 24, 2020, issued to accredited investors, which mature on April 23, 2022 and bear interest at LIBOR plus 6.0% per annum. IA-1 2,959,951 2,734,282 Senior secured convertible notes dated September 14, 2020, issued to accredited investors, which mature on April 23, 2022 and bear interest at LIBOR plus 6.0% per annum. IA-2 5,724,068 - Restatement fee issued in senior secured convertible notes dated March 27, 2020, which mature on April 23, 2022 and bear interest at LIBOR plus 6.0% per annum. - 8,513,121 8,199,863 Second restatement fee issued in senior secured convertible notes dated July 2, 2020, which mature on April 23, 2022 and bear interest at LIBOR plus 6.0% per annum. - 1,979,156 - Third restatement fee issued in senior secured convertible notes dated January 11, 2021, which mature on April 23, 2022 and bear interest at LIBOR plus 6.0% per annum. - 11,131,939 - Total Drawn on Senior Secured Convertible Credit Facility 214,962,900 187,431,400 Less Unamortized Debt Discount (57,897,490 ) (21,062,937 ) Senior Secured Convertible Credit Facility, Net $ 157,065,410 $ 166,368,463 A reconciliation of the beginning and ending balances of senior secured convertible credit facility for the nine months ended March 27, 2021 is as follows: Tranche 1 Tranche 2 Tranche 3 Tranche 4 Incremental Advance - 1 Incremental Advance - 2 3rd Advance Amendment Restatement Fee Notes 2nd Restatement Fee Notes TOTAL Balance as of June 27, 2020 $ 102,833,447 $ 25,352,687 $ 9,680,433 $ 286,691 $ 2,168,540 $ - $ - $ 18,964,600 $ 7,082,065 $ - 166,368,463 Cash Additions - - - - - 5,420,564 10,937,127 - - - 16,357,691 Repayments (8,000,000 ) - - - - - - - - - (8,000,000 ) Principal Reallocation 585,058 (3,276 ) (1,277 ) (404,451 ) (340 ) (589 ) - (2,395 ) (24,084 ) (148,646 ) - Fees Capitalized to Debt Related to - - - - - (468,564 ) (937,127 ) - - - (1,405,691 ) Paid-In-Kind Interest Capitalized 9,396,021 2,386,229 923,996 1,115,478 226,009 303,299 194,812 1,744,352 736,039 127,802 17,154,037 Net Effect on Debt from Extinguishment 4,812,996 962,750 497,175 2,167,870 (453,979 ) - - 455,792 630,758 2,000,000 11,073,362 Equity Component Debt - New (23,562,662 ) (6,147,968 ) (2,480,673 ) (2,839,499 ) (1,296,844 ) (3,239,507 ) (7,694,405 ) (4,337,438 ) (4,551,977 ) - (56,150,973 ) Cash Paid for Debt Issuance Costs - - - - - (175,000 ) (200,000 ) - - - (375,000 ) Amortization of Debt Discounts 5,394,019 1,282,359 531,455 1,057,893 414,622 726,545 565,258 971,013 1,099,158 1,198 12,043,520 Balance as of March 27, 2021 $ 91,458,879 $ 23,832,781 $ 9,151,109 $ 1,383,982 $ 1,058,008 $ 2,566,748 $ 2,865,665 $ 17,795,924 $ 4,971,959 $ 1,980,354 $ 157,065,410 On July 2, 2020, the Company amended and restated the securities purchase agreement with Gotham Green Partners (“GGP”) under the senior secured convertible credit facility (the “Convertible Facility”) (the “Fourth Amendment”) wherein the minimum liquidity covenant was waived until September 30, 2020 and resetting at $5,000,000 thereafter with incremental increases on March 31, 2021 and December 31, 2021. The payment-in-kind feature on the Convertible Facility was also extended, such that 100% of the cash interest due prior to June 2021 will be paid-in-kind and 50% of the cash interest due thereafter will be paid-in-kind. The Fourth Amendment released certain assets from its collateral to allow greater flexibility to generate proceeds through the sale of non-core assets. The Fourth Amendment allows for immediate prepayment of amounts under the Convertible Facility with a 5% prepayment penalty until 2nd anniversary of the Fourth Amendment and 3% prepayment penalty thereafter. As part of the Fourth Amendment, holders of notes under the Convertible Facility were provided down-round protection where issuances of equity interests (including securities that are convertible or exchangeable for equity interests) by the Company at less than the higher of (i) lowest conversion price under the amended and restated notes of the Convertible Facility amendment dated March 27, 2020 and (ii) the highest conversion price determined for any incremental advances, will automatically adjust the conversion/exercise price of the previous tranches and incremental tranche 4 warrants and the related replacement warrants to the price of the newly issued equity interests. Certain issuances of equity interests are exempted such as issuances to existing lenders, equity interests in contemplation at the time of Fourth Amendment and equity interests issued to employees, consultants, directors, advisors or other third parties, in exchange for goods and services or compensation. Pursuant to ASU 2017-11, the down-round protection was not considered a derivative and will be recognized when the down-round protection adjustments are triggered. As consideration for the amendment, the conversion price for 52% of the tranches 1 through 3 and the first amendment fee notes outstanding under the Convertible Facility were amended to $0.34 per share. An amendment fee of $2,000,000 was also paid through the issuance of additional notes at a conversion price of $0.28 per share. The Fourth Amendment to the Convertible Facility was deemed to be a substantial modification under ASC 470-50 and a loss on extinguishment of $10,129,655 was recorded in the unaudited interim Condensed Consolidated Statements of Operations for the nine months ended March 27, 2021. On September 14, 2020, the Company closed on an incremental advance in the amount of $5,000,000 under its existing Convertible Facility with GGP at a conversion price of $0.20 per share. In connection with the incremental advance, the Company issued 25,000,000 warrants with an exercise price of $0.20 per share. In addition, 1,080,255 existing warrants were cancelled and replaced with 16,875,001 warrants with an exercise price of $0.20 per share. Pursuant to the terms of the GGP Facility, the conversion price for 5.0% of the existing Notes outstanding prior to Tranche 4 and Incremental Advance (including paid-in-kind interest accrued on such Notes), being 5.0% of an aggregate principal amount of $170,729,923, was amended to $0.20 per share. As consideration for the additional advance, the Company issued convertible notes as consideration for a $468,564 fee with a conversion price of $0.20 per share. On September 16, 2020 and September 28, 2020, the down round feature on the convertible notes and warrants issued in connection with Tranche 4, Incremental Advances and certain amendment fees was triggered wherein the exercise price was adjusted to $0.17 and $0.15 per share, respectively. The value of the effect of the down round feature on convertible notes and warrants was determined to be $32,744,770 and $6,723,954, respectively, for the nine months ended March 27, 2021. The effect related to convertible notes was recognized as additional debt discount and an increase in additional paid-in-capital. The effect related to warrants was recognized as a deemed distribution and an increase in additional paid-in capital. On November 1, 2020, the Company repaid $8,000,000 of borrowings under the Convertible Facility and recorded a loss $943,706 on the partial extinguishment of debt and is included in the net effect on equity component of new and amended debt in the reconciliation of the beginning and ending balances of senior secured convertible credit facility for the nine months ended March 27, 2021. On January 11, 2021, the Company amended and restated the securities purchase agreement under the Convertible Facility (the “Fifth Amendment”) wherein the minimum liquidity covenant was waived until June 30, 2021 and resetting at $7,500,000 effective on July 1, 2021 through December 31, 2021, and $15,000,000 thereafter, and waiver of the minimum liquidity covenant if the Company is current on cash interest. Furthermore, covenants with regards to non-operating leases, capital expenditures and corporate SG&A will now be tied to a board of directors approved budget. In conjunction with the Fifth Amendment, the Company received an additional advance of $10,000,000 under its existing Convertible Facility with GGP with a conversion price of $0.16 per share. The Company also issued 62,174,567 warrants exercisable for five years at a purchase price of $0.16 per share. The notes, restatement fee notes and warrants are subject to down round adjustment provisions, with certain exceptions, if the Company issues securities at a lower price. The Fifth Amendment to the Convertible Facility was not deemed to be a substantial modification under ASC 470-50 . Pursuant to the terms of the GGP Facility, the conversion price of $47,100,000 of the existing Notes outstanding prior to Tranche 4 and Incremental Advance (including paid-in-kind interest accrued on such Notes), of an aggregate principal amount of $168,100,000, was amended to $0.17 per share, of which $16,800,000 of the Notes outstanding will continue to be subject to down round adjustment provisions. In addition, the Company cancelled an aggregate of 2,160,507 warrants that were issued with such notes and, in exchange, issued 41,967,832 warrants with an exercise price of $0.16 per share. In connection with the Fifth Amendment, the Company issued convertible notes as consideration for a $937,127 fee with a conversion price of $0.16 per share. |
SHAREHOLDERS EQUITY
SHAREHOLDERS EQUITY | 9 Months Ended |
Mar. 27, 2021 | |
MEZZANINE EQUITY: | |
Note 14. SHAREHOLDERS' EQUITY | 14. SHAREHOLDERS’ EQUITY Issued and Outstanding A reconciliation of the beginning and ending issued and outstanding shares is as follows: Subordinate Voting Super MM CAN USA MM Enterprises USA Balance as of June 27, 2020 403,907,218 815,295 236,123,851 725,016 Cancellation of Super Voting Shares - (815,295 ) - - Shares Issued for Cash 57,800,000 - - - Shares Issued to Settle Accounts Payable and Liabilities 14,911,047 - - - Shares Issued for Exercise of Warrants - - 27,164,323 - Redemption of MedMen Corp Redeemable Shares 133,969,228 - (133,969,228 ) - Shares Issued for Vested Restricted Stock Units 7,173,256 - - - Shares Issued for Debt Amendment Fees 4,305,148 - - - Stock Grants for Compensation 3,703,730 - - - Balance as of March 27, 2021 625,769,627 - 129,318,946 725,016 Cancellation of Super Voting Shares Effective as of December 10, 2020, the Company cancelled the remaining 815,295 Class A Super Voting Shares that were granted via proxy to Benjamin Rose wherein no consideration was paid. The effect of the cancellation was recognized as a reduction in the mezzanine equity for the book value of $82,500 and the difference over the repurchase price of nil was recorded to additional paid-in capital. There was no effect on total shareholders’ equity as a result of this cancellation. As of March 27, 2021, there are no outstanding Class A Super Voting Shares. Private Placement Effective as of February 15, 2021, the Company executed the sale of 7,800,000 units through an investor agreement for a purchase price of $0.37 per share or aggregated total proceeds of approximately $2,866,000. Each unit consists of one Class B Subordinate Voting Share and one share purchase warrant. Each warrant permits the holder to purchase one additional Class B Subordinate Voting Share at an exercise price of $0.46 per share for a period of five years from the date of issuance. The warrants were classified within shareholders’ equity as additional-paid-in-capital in accordance with ASC 815-10, “ Derivatives and Hedging Effective as of March 18, 2021, the Company executed the sale (“Private Placement Offering”) of 50,000,000 units (“Private Placement Units”) and 50,000,000 warrants that were granted through a separate private placement for a purchase price of C$0.40 per Private Placement Unit for aggregated total proceeds of approximately C$20,000,000 (or $16,019,597 U.S. dollars). Each Private Placement Unit consisted of one Class B Subordinate Voting Share and one share purchase warrant of the Company (“Private Placement Warrant”). Each Private Placement Warrant entitles the holder to purchase one Subordinate Voting Share at an exercise price of C$0.50 for a period of 3 years following the closing of the Private Placement Offering. See “Note 10 – Other Current Liabilities” Cashless Exercise of Warrants On March 22, 2021, 40,000,000 warrants were exercised on a cashless basis for 27,164,323 MM CAN USA Class B Redeemable Shares. 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 March 27, 2021 and June 27, 2020, the holders of the MM CAN USA Redeemable Shares represent approximately 17.13% and 36.89%, respectively, of the Company and holders of the MM Enterprises USA Common Units represent approximately 0.10% and 0.11%, respectively, 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 LAX Fund II Group, LLC, Natures Cure, Inc. and Venice Caregiver Foundation, Inc. This information represents amounts before intercompany eliminations. As of and for the nine months ended March 27, 2021, the balances of the VIEs before any intercompany eliminations consists of the following: Venice Caregivers Foundation, Inc. LAX Fund II Group, LLC Natures Cure, Inc. TOTAL Current Assets $ 1,197,557 $ - $ 10,310,942 $ 11,508,499 Non-Current Assets 13,045,511 2,925,798 4,980,057 20,951,366 Total Assets $ 14,243,068 $ 2,925,798 $ 15,290,999 $ 32,459,865 Current Liabilities $ 10,836,220 $ 9,032,248 $ 3,083,532 $ 22,952,000 Non-Current Liabilities 7,827,937 2,386,061 7 10,214,005 Total Liabilities $ 18,664,157 $ 11,418,309 $ 3,083,539 $ 33,166,005 Non-Controlling Interest $ (4,421,089 ) $ (8,492,511 ) $ 12,207,460 $ (706,140 ) Revenues $ 6,457,626 $ - $ 9,911,450 $ 16,369,076 Net Income (Loss) Attributable to Non-Controlling Interest $ 1,504,096 $ (2,422,184 ) $ 5,427,833 $ 4,509,745 As of and for the year ended June 27, 2020, the balances of the VIEs consists of the following: Venice Caregivers Foundation, Inc. LAX Fund II Group, LLC Natures Cure, Inc. TOTAL Current Assets $ 1,233,188 $ 811,025 $ 6,639,231 $ 8,683,444 Non-Current Assets 16,867,824 3,259,563 5,032,428 25,159,815 Total Assets $ 18,101,012 $ 4,070,588 $ 11,671,659 $ 33,843,259 Current Liabilities $ 12,831,161 $ 7,481,953 $ 3,745,710 $ 24,058,824 Non-Current Liabilities 11,196,585 2,662,078 1,146,322 15,004,985 Total Liabilities $ 24,027,746 $ 10,144,031 $ 4,892,032 $ 39,063,809 Non-Controlling Interest $ (5,926,734 ) $ (6,073,443 ) $ 6,779,627 $ (5,220,550 ) Revenues $ 10,949,458 $ - $ 13,976,810 $ 24,926,268 Net Income (Loss) Attributable to Non-Controlling Interest $ (6,132,528 ) $ (3,777,079 ) $ 3,143,437 $ (6,766,170 ) The net change in the consolidated VIEs and other non-controlling interest are as follows for the nine months ended March 27, 2021: Venice Caregivers Foundation, Inc. LAX Fund II Group, LLC Natures Cure, Inc. Other Non- Controlling Interests TOTAL Balance as of June 27, 2020 $ (5,925,185 ) $ (6,070,327 ) $ 6,779,627 $ (331,561,812 ) $ (336,777,697 ) Net Income (Loss) 1,504,096 (2,422,184 ) 5,427,833 (30,614,859 ) (26,105,114 ) Equity Component on Debt and Debt Modification - - - 4,055,133 4,055,133 Deferred Tax Impact On Conversion Feature - - - (1,210,052 ) (1,210,052 ) Redemption of MedMen Corp Redeemable Shares - - - (75,460,832 ) (75,460,832 ) Balance as of March 27, 2021 $ (4,421,089 ) $ (8,492,511 ) $ 12,207,460 $ (434,792,422 ) $ (435,498,562 ) Le Cirque Rouge, LP (the “Operating Partnership,” or the “OP”) is a Delaware limited partnership that holds substantially all of the real estate assets owned by the REIT, conducts the REIT’s operations, and is financed by the REIT. Under ASC 810, “Consolidation” “Note 11 – Leases” |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 9 Months Ended |
Mar. 27, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Note 15. SHARE-BASED COMPENSATION | 15. 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 grants (together, “Awards”). Stock based compensation expenses are recorded as a component of general and administrative to the extent that the Company has not appointed a Compensation Committee, all rights and obligations under the Incentive Plan shall be those of the full Board of Directors. 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, canceled, 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 the absence of one. 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 10 years. A summary of share-based compensation expense for the three and nine months ended March 27, 2021 and March 28, 2020 is as follows: Three Months Ended Nine Months Ended March 27, March 28, March 27, March 28, 2021 2020 2021 2020 Stock Options $ 305,565 $ (69,571 ) $ 2,851,785 $ 2,584,933 LTIP Units - 179,014 - 1,492,073 Stock Grants for Services, Net (63,189 ) 1,151,366 58,043 3,041,012 Restricted Stock Grants - 916,842 437,386 3,727,485 Total Share-Based Compensation $ 242,376 $ 2,177,651 $ 3,347,214 $ 10,845,503 For the nine months ended March 27, 2021 and March 28, 2020, the fair value of stock options granted with a fixed exercise price was determined using the Black-Scholes option-pricing model with the following assumptions at the time of grant: Nine Months Ended March 27, March 28, 2021 2020 Weighted-Average Risk-Free Annual Interest Rate 1.05 % 1.70 % Weighted-Average Expected Annual Dividend Yield 0.0 % 0.0 % Weighted-Average Expected Stock Price Volatility 116.5 % 87.9 % Weighted-Average Expected Life in Years 7.50 7.50 Weighted-Average Estimated Forfeiture Rate 40.0 % 40.0 % Stock Options A reconciliation of the beginning and ending balance of stock options outstanding is as follows: Number of Stock Options Weighted- Balance as of June 27, 2020 8,618,204 $ 2.78 Granted 7,318,669 Forfeited (1,344,375 ) Balance as of March 27, 2021 14,592,498 $ 1.48 Stock Options Exercisable as of March 27, 2021 12,769,339 $ 1.45 The aggregate intrinsic value of options outstanding was nil at both March 27, 2021 and June 27, 2020. 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: Weighted LTIP Units LLC Average Issued and Redeemable Grant Date Outstanding Units Fair Value Balance as of June 27, 2020 and March 27, 2021 19,323,878 725,016 $ 0.52 Deferred Stock Units Effective December 10, 2019, the Company’s board of directors approved a Deferred Share Unit (“DSU”) award under the Company’s Incentive Plan. The DSU award was for units to the Company’s non-management directors. Each director will be provided the Company’s Subordinate Voting Shares based on the duration of their term as a director up to $250,000 for a year of service ending August 2020. As of March 27, 2021, and June 27, 2020, there was nil and 1,283,567 units issued and outstanding, respectively. For the three and nine months ended March 27, 2021, compensation expense related to the DSU award was nil and nil, respectively, was included in accounts payable and stock-based compensation expense on the Company’s unaudited interim Condensed Consolidated Balance Sheets. As of March 27, 2021, the corresponding Subordinate Voting Shares had been issued to the directors. A reconciliation of the beginning and ending balance of DSUs outstanding is as follows: Issued and Outstanding Weighted- Balance as of June 27, 2020 1,283,567 $ 0.38 Settled (1,283,567 ) $ (0.38 ) Balance as of March 27, 2021 - $ - Restricted Stock Grants During the nine months ended March 27, 2021, the Company granted an entitlement to 28,210,512 of restricted Subordinate Voting Shares to certain officers, directors and employees. A reconciliation of the beginning and ending balance of restricted stock grants outstanding is as follows: Issued and Outstanding Vested Weighted- Balance as of June 27, 2020 7,159,164 192,459 $ 0.68 Granted (1) 28,210,512 - $ 0.17 Forfeiture of Restricted Stock (2) (4,240,013 ) - $ (0.20 ) Redemption of Vested Stock (8,107,249 ) (8,107,249 ) $ (0.26 ) Vesting of Restricted Stock - 8,533,485 $ 0.35 Balance as of March 27, 2021 23,022,414 618,695 $ 0.28 (1) Issued on December 11, 2020 to certain officers and employees of the Company and vest 37.5%, 12.5%, 37.5%, 12.5% on the 1st, 2nd, 3rd and 4th anniversary, respectively. (2) 4,240,013 of the restricted stock grants were forfeited upon the resignation of certain employees prior to their vesting. Certain restricted stock granted has vesting which is based on market conditions. For restricted stock that have no market condition vesting, the fair value was determined using the trading value of the Subordinate Voting Shares on the date of grant. For the restricted stock that have market condition vesting, these shares were valued using a Monte Carlo simulation model taking into account the trading value of the Company’s Subordinate Voting Shares on the date of grant and into the future encompassing a wide range of possible future market conditions. During the nine months ended March 27, 2021, there were no restricted stock grants with a market vesting condition. Warrants A reconciliation of the beginning and ending balance of warrants outstanding is as follows: Number of Warrants Outstanding Weighted-Average Exercise Price Subordinate Voting Shares MedMen Corp Redeemable Shares Total Subordinate Voting Shares MedMen Corp Redeemable Shares Total Balance as of June 27, 2020 114,998,915 40,455,731 155,454,646 $ 0.75 $ 0.60 $ 0.71 Issued 229,602,951 147,508,516 377,111,467 $ 0.18 $ 0.28 $ 0.21 Exercised - (40,000,000 ) (40,000,000 ) $ - $ (0.20 ) $ (0.20 ) Cancelled (9,796,509 ) (40,455,731 ) (50,252,240 ) $ (0.50 ) $ (0.44 ) $ (0.45 ) Balance as of March 27, 2021 334,805,358 107,508,516 442,313,874 $ 0.33 $ 0.28 $ 0.32 As of March 27, 2021 and June 27, 2020, warrants outstanding for Subordinate Voting Shares have a weighted-average remaining contractual life of 3.8 years and 4.8 years, respectively. As of March 27, 2021 and June 27, 2020, warrants outstanding for MedMen Corp Redeemable Shares have a weighted-average remaining contractual life of 4.5 years and 2.5 years, respectively. The fair value of warrants exercisable for MedMen Corp Redeemable Shares was determined using the Black-Scholes option-pricing model with the following assumptions on the date of issuance: March 27, June 27 2021 2020 Weighted-Average Risk-Free Annual Interest Rate 0.13 % 2.20 % Weighted-Average Expected Annual Dividend Yield 0 % 0 % Weighted-Average Expected Stock Price Volatility 92.06 % 88.19 % Weighted-Average Expected Life of Warrants 1 year 1 year The fair value of warrants exercisable for the Company’s Subordinate Voting Shares was determined using the Black-Scholes option-pricing model with the following assumptions on the latest modification of December 17, 2020: Weighted-Average Risk-Free Annual Interest Rate 0.16 % Weighted-Average Expected Annual Dividend Yield 0 % Weighted-Average Expected Stock Price Volatility 85.39 % Weighted-Average Expected Life of Warrants 1 year Stock price volatility was estimated by using the historical volatility of the Company’s Subordinate Voting Shares and the average historical volatility of comparable companies from a representative peer group of publicly-traded cannabis companies. The expected life in years represents the period of time that warrants issued are expected to be outstanding. The risk-free rate was based on U.S. Treasury bills with a remaining term equal to the expected life of the warrants. 97,785,140 of warrants are cancelable if the Company meets certain cash flow metrics for nine consecutive months, see “Note 25 – Subsequent Events” |
LOSS PER SHARE
LOSS PER SHARE | 9 Months Ended |
Mar. 27, 2021 | |
Earnings Per Share [Abstract] | |
Note 16. LOSS PER SHARE | 16. LOSS PER SHARE The following is a reconciliation for the calculation of basic and diluted loss per share for the three and nine months ended March 27, 2021 and March 28, 2020: Three Months Ended Nine Months Ended March 27, March 28, March 27, March 28, 2021 2020 2021 2020 Net Loss from Continuing Operations Attributable to Shareholders of MedMen Enterprises, Inc. $ (21,328,677 ) $ (19,128,503 ) $ (79,310,611 ) $ (31,648,390 ) Less Deemed Dividend - Down Round Feature of Warrants - - (6,364,183 ) - Net Loss from Continuing Operations Available to Shareholders of MedMen Enterprises, Inc. $ (21,328,677 ) $ (19,128,503 ) $ (85,674,794 ) $ (31,648,390 ) Net Income (Loss) from Discontinued Operations 7,609,983 (5,843,713 ) (6,023,429 ) (58,797,102 ) Total Net Loss $ (13,718,694 ) $ (24,972,216 ) $ (91,698,223 ) $ (90,445,492 ) Weighted-Average Shares Outstanding - Basic and Diluted 541,029,620 315,384,911 482,213,951 65,930,969 Income (Loss) Per Share - Basic and Diluted: From Continuing Operations Attributable to Shareholders of MedMen Enterprises Inc. $ (0.04 ) $ (0.06 ) $ (0.18 ) $ (0.48 ) From Discontinued Operations Attributable to Shareholders of MedMen Enterprises Inc. $ 0.01 $ (0.02 ) $ (0.01 ) $ (0.89 ) Diluted loss per share is the same as basic loss per share as the issuance of shares on the exercise of convertible debentures, LTIP share units, warrants and share options is anti-dilutive. |
GENERAL AND ADMINISTRATIVE EXPE
GENERAL AND ADMINISTRATIVE EXPENSES | 9 Months Ended |
Mar. 27, 2021 | |
Research and Development [Abstract] | |
Note 17. GENERAL AND ADMINISTRATIVE EXPENSES | 17. GENERAL AND ADMINISTRATIVE EXPENSES During the three and nine months ended March 27, 2021 and March 28, 2020, general and administrative expenses consisted of the following: Three Months Ended Nine Months Ended March 27, March 28, March 27, March 28, 2021 2020 2021 2020 Salaries and Benefits $ 8,787,495 $ 16,809,025 $ 26,904,558 $ 58,876,098 Professional Fees 5,480,969 4,634,854 12,668,101 14,850,558 Rent 7,368,225 7,188,853 22,662,161 21,288,400 Licenses, Fees and Taxes 882,742 3,404,080 5,612,825 11,232,164 Other General and Administrative 6,420,260 10,921,123 21,839,251 44,526,780 Total General and Administrative Expenses $ 28,939,691 $ 42,957,935 $ 89,686,896 $ 150,774,000 |
OTHER OPERATING EXPENSE
OTHER OPERATING EXPENSE | 9 Months Ended |
Mar. 27, 2021 | |
Nonoperating Income (Expense) [Abstract] | |
Note 18. OTHER OPERATING EXPENSE | 18. OTHER OPERATING EXPENSE During the three and nine months ended March 27, 2021 and March 28, 2020, other operating expense (income) consisted of the following: Three Months Ended Nine Months Ended March 27, March 28, March 27, March 28, 2021 2020 2021 2020 Loss on Disposals of Assets $ 394,621 $ - $ 779,198 $ 226,335 Restructuring and Reorganization Expense 1,600,721 - 2,781,131 5,564,104 (Gain) Loss on Settlement of Accounts Payable (175,951 ) - 849,737 - Loss (Gain) on Lease Terminations 160,449 - (17,748,368 ) (217,127 ) Gain on Disposal of Assets Held for Sale (255,391 ) - (10,709,999 ) - Other Expense (Income) (165,919 ) 1,848,209 (769,742 ) 1,209,857 Total Other Operating Expense (Income) $ 1,558,530 $ 1,848,209 $ (24,818,043 ) $ 6,783,169 |
REALIZED AND UNREALIZED LOSS (G
REALIZED AND UNREALIZED LOSS (GAIN) ON INVESTMENTS | 9 Months Ended |
Mar. 27, 2021 | |
Restructuring and Related Activities [Abstract] | |
Note 19. REALIZED AND UNREALIZED LOSS (GAIN) ON INVESTMENTS | 19. REALIZED AND UNREALIZED GAIN ON INVESTMENTS During the three and nine months ended March 27, 2021 and March 28, 2020, realized and unrealized gain on investments consisted of the following: Three Months Ended Nine Months Ended March 27, March 28, March 27, March 28, 2021 2020 2021 2020 Gain on Changes in Fair Value of Investments - (86,124 ) - (16,600,604 ) Total Realized and Unrealized Gain on Investments $ - $ (86,124 ) $ - $ (16,600,604 ) |
PROVISION FOR INCOME TAXES AND
PROVISION FOR INCOME TAXES AND DEFERRED INCOME TAXES | 9 Months Ended |
Mar. 27, 2021 | |
Income Tax Disclosure [Abstract] | |
Note 20. PROVISION FOR INCOME TAXES AND DEFERRED INCOME TAXES | 20. 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 nine months ended March 27, 2021 and March 28, 2020: Three Months Ended Nine Months Ended March 27, March 28, March 27, March 28, 2021 2020 2021 2020 Loss from Continuing Operations Before Provision for Income Taxes $ (49,548,705 ) $ (60,651,820 ) $ (103,314,604 ) $ (196,997,174 ) Income Tax Benefit (Expense) 32,207,910 13,836,022 (2,101,121 ) 47,088,266 Effective Tax Rate 65 % 23 % 2 % 24 % Historically, the Company has computed its provision for income taxes under the discrete method which treats the year-to-date period as if it were the annual period and determines the income tax expense or benefit on that basis. For the three and nine months ended March 27, 2021, the Company has calculated its provision for income taxes during its interim reporting periods by applying an estimate of the annual effective tax rate for the full year “ordinary” income or loss for the respective reporting period. Historically, the discrete method was applied due to the reliability of the estimate the annual effective tax rate. The Company believes that, at this time, the use of the estimated annual tax rate is more appropriate under FASB Interpretation No. 18 an interpretation of APB Opinion No. 28 than the discrete method given the Company’s utilization of its forecast. 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, Florida 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. Since IRC Section 280E was not applied in the California Franchise Tax returns, the Company has approximately $76,700,000 of gross California net operating losses which begin expiring in 2038 as of June 27, 2020. 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 $2,500,000 will not be realized. The effective tax rate for the three and nine months ended March 27, 2021 varies widely from the three and nine months ended March 28, 2020, respectively, primarily due to the Company reporting increased expenses subject to IRC Section 280E relative to pre-tax book loss. The Company incurred a large amount of expenses that were not deductible due to IRC Section 280E limitations which resulted in income tax expense being incurred while there were pre-tax losses for the nine months ended March 2020. The federal statute of limitations remains open for the 2017 tax year to the present. The state income tax returns generally remain open for the 2016 tax year through the present. Net operating losses arising prior to these years are also open to examination if and when utilized. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Mar. 27, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Note 21. COMMITMENTS AND CONTINGENCIES | 21. 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 March 27, 2021 and June 27, 2020, 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. As of March 27, 2021, there were no pending or threatening lawsuits that could be reasonably assessed to have resulted in a probable loss to the Company in an amount that can be reasonably estimated. As of March 27, 2021, there are also no proceedings in which any of the Company’s directors, officers or affiliates is an adverse party to the Company or has a material interest adverse to the Company’s interest. In July 2018, a legal claim was filed against the Company related to alleged misrepresentations in respect of a financing transaction completed in May 2018. The claimant is seeking damages of approximately $2,200,000. The Company believes the likelihood of a loss contingency is remote. As a result, no amount has been set up for potential damages in these financial statements. In late January 2019, the Company’s former Chief Financial Officer (“CFO”) filed a complaint against MM Enterprises in the Superior Court of California, County of Los Angeles, seeking damages for claims relating to his employment. The Company is currently defending against this lawsuit, which seeks damages for wrongful termination, breach of contract, and breach of implied covenant of good faith. The former CFO’s employment agreement provided for the payment of severance in the event of termination without cause. The Company disputes the claims set forth in this lawsuit and believes that the outcome is neither probable nor estimable. As of March 27, 2021, $584,000 has been accrued in the Consolidated Balance Sheet. In March 2020, litigation was filed against the Company related to a purchase agreement for a previous acquisition. The Company is currently defending against this lawsuit, which seeks damages for fraudulent inducement and breach of contract. 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 May 2020, litigation was filed against the Company related to a purchase agreement and secured promissory note for a previous acquisition. The Company is currently defending against this lawsuit, which claims for breach of contract, breach of implied covenant of good faith and fair dealing, common law fraud and securities fraud. The plaintiffs are seeking damages for such claims in which the amount is currently not reasonably estimable. Therefore, pursuant to ASC 450, “ Contingencies Note 12 – Notes Payable In September 2020, a legal dispute was filed against the Company related to the separation of a former officer in which the severance issued is currently being disputed. The Company believes the likelihood of loss is remote. As a result, no amount has been set up for potential damages in these financial statements. In February 2020, a legal dispute was filed against the Company and settled in December 2020 for approximately $2,400,000. As of March 27, 2021, the remaining amount has been accrued in the Consolidated Balance Sheet. In January 2021, a cross-complaint was filed against the Company related a lien foreclosure alleging breach of contract, quantum merit and implied indemnity. The Company is actively defending the legal matter which the claimant is seeking damages of approximately $11,000,000. The litigation is at an early stage and thus the likelihood of a loss contingency is remote. As such, no amount has been accrued in these financial statements. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Mar. 27, 2021 | |
Related Party Transactions [Abstract] | |
Note 22. RELATED PARTY TRANSACTIONS | 22. RELATED PARTY TRANSACTIONS All related party balances due to the Company as of March 27, 2021 and June 27, 2020 did not have any formal contractual agreements regarding payment terms or interest. As of February 2020 and May 2020, Mr. Adam Bierman and Mr. Andrew Modlin, respectively, no longer held board or management positions and therefore as of March 27, 2021, they are not considered related parties under ASC 850, “Related Party Disclosures” Pursuant to the Side Letter executed on July 2, 2020 in conjunction with the Fourth Amendment of the Convertible Facility with GGP, Wicklow Capital and GGP have the right to approve director nominees submitted by the Company. The ability to approve the nominees to the Company’s Board of Directors meets the definition of control under ASC 850 and accordingly, Wicklow Capital is a related party of the Company. As of March 27, 2021, the Company determined GGP to be a related party as a result of GGP having significant influence over the Company. See “Note 13 – Senior Secured Convertible Credit Facility” In March 2020, the Company entered into a restructuring plan and retained interim management and advisory firm, Sierra Constellation Partners (“SCP”). As part of the engagement, Tom Lynch was appointed as Interim Chief Executive Officer and Chief Restructuring Officer, and Tim Bossidy was appointed as Interim Chief Operating Officer. Mr. Lynch is a Partner and Senior Managing Director at SCP. Mr. Bossidy is a Director at SCP. In December 2020, Mr. Lynch was elected as Chairman of the Board and Reece Fulgham, a Managing Director at SCP, was appointed as Interim Chief Financial Officer. During the nine months ended March 27, 2021, the Company had paid $2,172,709 in fees to SCP for interim management and restructuring support. During the nine months ended March 27, 2021, Mr. Lynch and Mr. Bossidy each received 124,868 stock options. 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. The Class B Subordinate Voting Shares is recorded as a restricted stock unit until settled. |
SEGMENTED INFORMATION
SEGMENTED INFORMATION | 9 Months Ended |
Mar. 27, 2021 | |
Segmented Information | |
Note 23. SEGMENTED INFORMATION | 23. SEGMENTED 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. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 9 Months Ended |
Mar. 27, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Note 24. DISCONTINUED OPERATIONS | 24. DISCONTINUED OPERATIONS During the fiscal year ended June 27, 2020, the Company contemplated the divesture of non-core assets and management entered into a plan to sell its operations in the state of Arizona. Consequently, assets and liabilities allocable to the operations within the state of Arizona were classified as a discontinued operation. The assets associated with the Arizona component have been measured at the lower of their carrying amount or FVLCTS. Revenue and expenses, gains or losses relating to the discontinuation of Arizona operations have been eliminated from profit or loss from the Company’s continuing operations and are shown as a single line item in the unaudited interim Condensed Consolidated Statements of Operations. During the fiscal year ended June 27, 2020, the Company began separate negotiations to sell its operations in the state of Arizona, including the related management entities. In October 2020, Kannaboost Technology Inc. and CSI Solutions LLC (collectively referred to as “Level Up”) was sold at auction for a total sales price of $25,150,000, of which the Company has not received the proceeds as of March 27, 2021. Refer to “ Note 21 - Commitments and Contingencies Note 21 – Commitments and Contingencies On January 29, 2018, the Company acquired all membership interests and assets in Project Compassion NY, LLC (“Project Compassion”) as a part of the formation of MM Enterprises USA through a joint venture. Through Project Compassion, the Company has one cultivation and production facility in Utica, New York, and operates four dispensaries in the state of New York that are located in Buffalo, Lake Success, Salina and Manhattan (collectively, “MedMen NY, Inc.”). During the three months ended March 27, 2021, the Company contemplated the divesture of non-core assets and management entered into a plan to sell MedMen NY, Inc. On February 25, 2021, the Company entered into a definitive investment agreement to sell a controlling interest in MedMen NY, Inc. equity of approximately 86.7% with the option to purchase the remaining equity of approximately 13.3% that the Company will retain in MedMen NY, Inc. following the sale for a total sales price of up to $73,000,000. In conjunction with the investment agreement, MedMen NY, Inc. will engage the services of the purchaser pursuant to a management agreement until regulatory approval has been obtained. The aggregate sales price consists of a cash purchase price of $35,000,000, subject to adjustments and a senior secured promissory note of $28,000,000 which shall be assigned to Hankey Capital in partial satisfaction of the outstanding debt, and within five business days after the first sale by MedMen NY, Inc. of adult-use cannabis products at one or more of its retail store locations, additional shares of MedMen NY, Inc. will be purchased for $10,000,000 in cash. The proceeds in cash will be used to repay a portion of the Hankey Capital notes payable due by the Company. Accordingly, interest expense and amortization of debt discounts and loan origination fees related to the Senior Secured Term Loan Facility totalling $4,797,506 and $2,308,388, was allocated to discontinued operations for the three months ended March 27, 2021 and 2020, respectively and $13,329,130 and $7,507,064 for the nine months ended March 27, 2021 and 2020, respectively. Refer to “Note 12 - Notes Payable” Consequently, assets and liabilities allocable to the operations within the state of New York were classified as a discontinued operation. Revenue and expenses, gains or losses relating to the discontinuation of New York operations have been eliminated from profit or loss from the Company’s continuing operations and are shown as a single line item in the unaudited interim Condensed Consolidated Statements of Operations. The assets associated with the New York component have been measured at the lower of the carrying amount or FVLCTS. The Company will continue to operate the remaining Arizona and New York operations until the ultimate sale of the components. The operating results of the discontinued operations are summarized as follows: Three Months Ended Nine Months Ended March 27, March 28, March 27, March 28, 2021 2020 2021 2020 Revenue $ 7,387,484 $ 5,865,570 $ 15,768,813 $ 18,856,242 Cost of Goods Sold 4,621,955 4,746,321 9,788,393 14,051,806 Gross Profit 2,765,529 1,119,249 5,980,420 4,804,436 Expenses: General and Administrative 3,215,889 4,471,200 9,415,436 14,853,915 Sales and Marketing 21,756 2,986 52,857 45,991 Depreciation and Amortization 1,003,276 518,691 2,528,380 2,932,558 Gain on Disposal of Assets (13,375,430 ) - (13,375,430 ) - Impairment Expense - - - 46,702,659 Total Expenses (9,134,509 ) 4,992,877 (1,378,757 ) 64,535,123 Operating Income (Loss) from Discontinued Operations 11,900,038 (3,873,628 ) 7,359,177 (59,730,687 ) Other Expense (Income): Interest Expense 2,629,476 1,985,129 7,549,165 4,066,905 Interest Income (1,545 ) - (1,545 ) - Amortization of Debt Discount and Loan Origination Fees 2,197,946 323,916 5,834,043 3,444,098 Other (Income) Expense (177,006 ) (584 ) (174,341 ) 77,494 Total Other Expense 4,648,871 2,308,461 13,207,322 7,588,497 Income (Loss) on Discontinued Operations Before Provision for Income Taxes 7,251,167 (6,182,089 ) (5,848,145 ) (67,319,184 ) Provision for Income Tax Benefit (Expense) 358,816 338,376 (175,284 ) 8,522,082 Income (Loss) on Discontinued Operations $ 7,609,983 $ (5,843,713 ) $ (6,023,429 ) $ (58,797,102 ) The carrying amounts of assets and liabilities in the disposal group are summarized as follows: March 27, June 27, 2021 2020 Carrying Amounts of the Assets Included in Discontinued Operations: Cash and Cash Equivalents $ 1,115,295 $ 1,198,390 Restricted Cash 5,280 8,844 Accounts Receivable 744,830 283,730 Prepaid Expenses 371,185 172,403 Inventory 6,252,896 6,985,120 Other Current Assets - 64,600 TOTAL CURRENT ASSETS (1) Property and Equipment, Net 15,344,556 15,213,580 Operating Lease Right-of-Use Assets 24,428,302 26,349,789 Intangible Assets, Net 14,255,791 18,936,173 Goodwill 960,691 960,692 Other Assets 525,646 1,688,316 TOTAL NON-CURRENT ASSETS (1) TOTAL ASSETS OF THE DISPOSAL GROUP CLASSIFIED AS HELD FOR SALE $ 64,004,472 $ 71,861,637 Carrying Amounts of the Liabilities Included in Discontinued Operations: Accounts Payable and Accrued Liabilities $ 4,898,172 $ 6,231,931 Income Taxes Payable 1,273,275 775,714 Other Current Liabilities 326,567 22,747 Current Portion of Operating Lease Liabilities 2,425,234 1,824,862 TOTAL CURRENT LIABILITIES (1) Operating Lease Liabilities, Net of Current Portion 25,540,209 25,417,774 Finance Lease Liabilities, Net of Current Portion 349,312 - Deferred Tax Liabilities 9,710,451 14,663,497 TOTAL NON-CURRENT LIABILITIES (1) TOTAL LIABILITIES OF THE DISPOSAL GROUP CLASSIFIED AS HELD FOR SALE $ 44,523,220 $ 48,936,525 (1) The assets and liabilities of the remaining Arizona disposal group and MedMen NY, Inc. classified as held for sale are classified as current on the unaudited interim Condensed Consolidated Balance Sheets as of March 27, 2021 because it is probable that the sale will occur and proceeds will be collected within one year. The assets and liabilities of Level Up classified as held for sale are classified as current in the amounts of $21,181,051 and $15,060,302, respectively, on the audited Consolidated Balance Sheets as of June 27, 2020. The assets and liabilities of MedMen NY, Inc. classified as held for sale are classified as current and noncurrent in the amounts of $4,440,127and $46,228,551, respectively, on the audited Consolidated Balance Sheets as of June 27, 2020. The liabilities of MedMen NY, Inc. classified as held for sale are classified as current and noncurrent in the amounts of $2,915,276 and $30,960,947, respectively, on the audited Consolidated Balance Sheets as of June 27, 2020. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Mar. 27, 2021 | |
Subsequent Events [Abstract] | |
Note 25. SUBSEQUENT EVENTS | 25. SUBSEQUENT EVENTS The Company has evaluated subsequent events through May 11, 2021, which is the date these unaudited interim Condensed Consolidated Financial Statements were issued, and has concluded that the following subsequent events have occurred that would require recognition in the unaudited interim Condensed Consolidated Financial Statements or disclosure in the notes to the unaudited interim Condensed Consolidated Financial Statements. Senior Secured Credit Facility On April 21, 2021, the Company cancelled existing warrants issued to Gotham Green Partners pursuant to the Fifth Amendment of the Senior Secured Credit Facility, see “ Note 13 – Senior Secured Credit Facility |
RECLASSIFICATIONS
RECLASSIFICATIONS | 9 Months Ended |
Mar. 27, 2021 | |
Reclassifications | |
Note 26. RECLASSIFICATIONS | 26. RECLASSIFICATIONS Certain comparative amounts have been reclassified to conform with current period presentation. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Mar. 27, 2021 | |
Accounting Policies [Abstract] | |
Basis of Preparation | Basis of Preparation The accompanying unaudited interim Condensed Consolidated Financial Statements have been prepared on a going concern basis in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). The unaudited interim 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 (consisting only of normal recurring adjustments) considered necessary for a fair presentation of the consolidated financial position of the Company as of March 27, 2021 and June 27, 2020, the consolidated results of operations for the three and nine months ended March 27, 2021 and March 28, 2020, and the consolidated statements of cash flows for the nine months ended March 27, 2021 and March 28, 2020 have been included. The accompanying unaudited interim 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, prepared in accordance with GAAP, have been condensed or omitted in accordance with SEC rules and regulations within the instruction to Form 10-Q and Article 10 of Regulation S-X. The financial data presented herein should be read in conjunction with the audited Consolidated Financial Statements and accompanying notes included in Item 13 of the registration statement on Form 10 for the fiscal year ended June 27, 2020. |
Going Concern | Going Concern As reflected in the unaudited interim Condensed Consolidated Financial Statements, the Company had an accumulated deficit and a negative net working capital (current liabilities greater than current assets) as of March 27, 2021, as well as a net loss and negative cash flow from operating activities for the reporting period then ended. These factors raise substantial doubt about the Company’s ability to continue as a going concern for at least one year from the issuance of these unaudited interim Condensed Consolidated Financial Statements. Management believes that substantial doubt of our ability to meet our obligations for the next twelve months from the date these financial statements were first made available has been alleviated due to, but not limited to, (i) capital raised between May 2021 and May 2022, (ii) restructuring plans that have already been put in place to reduce corporate-level expenses, (iii) debt amendments that have been agreed to with lenders and landlords to defer cash interest and rent payments, (iv) rationalization of capital expenditures to correlate to our new store opening strategy, (v) plans to divest non-core assets to raise non-dilutive capital and (vi) enhancements to its digital offering, including direct-to-consumer delivery and curbside pick-up in light of COVID-19. However, management cannot provide any assurances that we will be successful in accomplishing any of our plans. Management also cannot provide any assurance as to unforeseen circumstances that could occur at any time within the next twelve months or thereafter which could increase our need to raise additional capital on an immediate basis. The Company will continually monitor its capital requirements based on its capital and operational needs and the economic environment and may raise new capital as necessary. The Company’s ability to continue as a going concern will depend on its ability to raise additional equity or debt in the private or public markets, reducing operating expenses, divesting of certain non-core assets, and achieving cash flow profitability. While the Company has been successful in raising equity and debt to date, there can be no assurances that the Company will be successful in completing a financing in the future. If the Company is unable to raise additional capital whenever necessary, it may be forced to divest additional assets to raise capital and/or pay down its debt, amend its debt agreements, which could potentially have a dilutive effect on the Company’s shareholders, further reduce operating expenses and temporarily pause the opening of new store locations. Furthermore, COVID-19 and the impact the global pandemic has had and will continue to have on the broader retail environment could also have a significant impact on the Company’s financial operations. |
COVID-19 | COVID-19 The COVID-19 pandemic promoted various recommendations and safety measures from governmental authorities to try and limit the pandemic. The response of governmental authorities is having a significant impact on the private sector and individuals, including unprecedented business, employment and economic disruptions. During the current reporting period, aspects of the Company’s business continue to be affected by the COVID-19 pandemic, with the Company’s offices and retail stores operating within local rules and regulations. While the ultimate severity of the outbreak and its impact on the economic environment is uncertain, the Company is monitoring this closely. In the event that the Company were to experience widespread transmission of the virus at one or more of the Company’s store or other facilities, the Company could suffer reputational harm or other potential liability. Further, the Company’s business operations may be materially and adversely affected if a significant number of the Company’s employees are impacted by the virus. |
Emerging Growth Company | Emerging Growth Company The Company is an emerging growth company as defined in the Jumpstart Our Business Startups Act under which emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies. |
Functional Currency | Functional Currency The Company and its subsidiaries’ functional currency, as determined by management, is the United States (“U.S.”) dollar. These unaudited interim Condensed Consolidated Financial Statements are presented in U.S. dollars as this is the primary economic environment of the group. All references to “C$” refer to Canadian dollars. |
Significant Accounting Policies | Significant Accounting Policies The significant accounting policies and critical estimates applied by the Company in these unaudited interim Condensed Consolidated Financial Statements are the same as those applied in the Company’s audited Consolidated Financial Statements and accompanying notes included in Item 13 of the registration statement on Form 10 for the fiscal year ended June 27, 2020, unless otherwise disclosed in these accompanying notes to the unaudited interim Condensed Consolidated Financial Statements for the nine months ended March 27, 2021. |
Restricted Cash | Restricted Cash Restricted cash balances are those which meet the definition of cash and cash equivalents but are not available for use by the Company. As of March 27, 2021 and June 27, 2020, restricted cash was $730 and $1,029, respectively, which is used to pay for lease costs and costs incurred related to building construction in Reno, Nevada. This account is managed by a contractor and the Company is required to maintain a certain minimum balance. |
Down-Round Provisions | Down-Round Features The Company calculates down-round features under Accounting Standards Update (“ASU”) No. 2017-11 (“ASU 2017-11”), “Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features” |
Allocation of Interest to Discontinued Operations | Allocation of Interest to Discontinued Operations Under ASC 205-20 “ Discontinued Operations Note 24 – Discontinued Operations |
Loss per Share | 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 loss 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, DSU, restricted stock grants, warrants and stock options issued. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments” In January 2017, the FASB issued ASU No. 2017-04 “Intangibles— Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” In August 2018, the FASB issued ASU 2018-13, “ Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes (Topic 740)”, In January 2020, the FASB issued ASU 2020-01, “ Investments – Equity Securities (Topic 321) Investments – Equity Method and Joint Ventures (Topic 323) Derivatives and Hedging (Topic 815) In August 2020, the FASB issued ASU 2020-06, “ Debt – Debt with Conversion and Other Options (Subtopic 470-20) Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible instruments and contracts in an Entity’s Own Equity |
INVENTORY (Tables)
INVENTORY (Tables) | 9 Months Ended |
Mar. 27, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | As of March 27, 2021 and June 27, 2020, inventory consists of the following: March 27, June 27, 2021 2020 Raw Materials $ 965,641 $ 1,790,050 Work-in-Process 4,760,097 6,229,152 Finished Goods 11,321,882 10,957,776 Total Inventory $ 17,047,620 $ 18,976,978 |
OTHER CURRENT ASSETS (Tables)
OTHER CURRENT ASSETS (Tables) | 9 Months Ended |
Mar. 27, 2021 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Schedule of Other current assets | As of March 27, 2021 and June 27, 2020, other current assets consist of the following: March 27, June 27, 2021 2020 Investments $ 3,036,791 $ 3,786,791 Excise Tax Receivable - 5,254,595 Note Receivable (1) 1,670,038 - Other Current Assets 3,470,374 64,071 Total Other Current Assets $ 8,177,203 $ 9,105,457 |
Schedule of Investments | As of March 27, 2021 and June 27, 2020, investments included in other current assets consist of the following: The Hacienda Old Pal Other Investments TOTAL Fair Value as of June 27, 2020 $ 750,000 $ 1,970,000 $ 1,066,791 $ 3,786,791 Settlement of Liabilities (750,000 ) - - (750,000 ) Fair Value as of March 27, 2021 $ - $ 1,970,000 $ 1,066,791 $ 3,036,791 |
ASSETS HELD FOR SALE (Tables)
ASSETS HELD FOR SALE (Tables) | 9 Months Ended |
Mar. 27, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of asset held for sale | A reconciliation of the beginning and ending balances of assets held for sale for the nine months ended March 27, 2021 is as follows: PharmaCann Assets (1) Available for Sale Subsidiaries (2) Discontinued Operations (3) TOTAL Balance at Beginning of Period $ 212,400 $ 12,066,428 $ 71,849,729 $ 84,128,557 Transferred In - 6,614,986 - 6,614,987 Gain on the Sale of Assets Held for Sale - 10,709,999 - 10,709,999 Proceeds from Sale - (24,750,298 ) - (24,750,298 ) Ongoing Activity from Discontinued Operations - (4,641,116 ) (7,845,258 ) (12,486,373 ) Balance at End of Period $ 212,400 $ - $ 64,004,471 $ 64,216,871 (1) During the year ended June 27, 2020, PharmaCann LLC, (“PharmaCann”) transferred 100% of the membership interests for MME Evanston Retail, LLC (“Evanston”), PharmaCann Virginia, LLC (“Staunton”), and PC 16280 East Twombly LLC (“Hillcrest”). As of March 27, 2021, the Company has 100% of membership interests in Staunton which holds land and a license for a vertically-integrated facility in Staunton, Virginia. The Staunton land and license were classified as assets held for sale in accordance with ASC 360, “Long-Lived Assets Classified as Held for Sale” (“ASC 360”) and are measured at the lower of its carrying amount or fair value less costs to sell (“FVLCTS”) which was determined as $212,400 and $0, respectively, as of March 27, 2021. (2) Long-lived assets classified as held for sale that do not qualify as discontinued operation and classified as held for sale. Significant classes of assets and liabilities are presented in the notes to the unaudited interim Condensed Consolidated Financial Statements in accordance with ASC 360-10, “Impairment and Disposal of Long-Lived Assets” (“ASC 360-10”). (3) See “Note 24 - Discontinued Operations” for further information. |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Mar. 27, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | As of March 27, 2021 and June 27, 2020, property and equipment consists of the following: March 27, June 27, 2021 2020 Land and Buildings $ 37,421,326 $ 37,400,378 Finance Lease Right-of-Use Assets 9,124,138 26,074,429 Furniture and Fixtures 12,428,701 12,393,369 Leasehold Improvements 59,551,369 56,026,595 Equipment and Software 25,823,935 25,379,767 Construction in Progress 28,866,937 36,833,422 Total Property and Equipment 173,216,406 194,107,960 Less Accumulated Depreciation (39,039,417 ) (30,484,865 ) Property and Equipment, Net $ 134,176,989 $ 163,623,095 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Mar. 27, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Intangible assets | As of March 27, 2021 and June 27, 2020, intangible assets consist of the following: March 27, June 27, 2021 2020 Dispensary Licenses $ 118,881,616 $ 125,565,281 Customer Relationships 15,927,600 15,927,600 Management Agreement 7,594,937 7,594,937 Capitalized Software 9,343,352 9,255,026 Intellectual Property 6,276,955 8,520,121 Total Intangible Assets 158,024,460 166,862,965 Dispensary Licenses (20,685,860 ) (15,860,670 ) Customer Relationships (14,210,226 ) (6,261,515 ) Management Agreement (715,761 ) (565,972 ) Capitalized Software (4,071,756 ) (2,273,432 ) Intellectual Property (3,006,772 ) (5,496,231 ) Less Accumulated Amortization (42,690,375 ) (30,457,820 ) Intangible Assets, Net $ 115,334,085 $ 136,405,145 |
OTHER ASSETS (Tables)
OTHER ASSETS (Tables) | 9 Months Ended |
Mar. 27, 2021 | |
Other Income and Expenses [Abstract] | |
Schedule of other assets | As of March 27, 2021 and June 27, 2020, other assets consist of the following: March 27, June 27, 2021 2020 Long-Term Security Deposits for Leases $ 4,817,042 $ 8,177,871 Loans and Other Long-Term Deposits 7,808,326 7,568,738 Other Assets 5,593 53,648 Total Other Assets $ 12,630,961 $ 15,800,257 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED LIABILTIES (Tables) | 9 Months Ended |
Mar. 27, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of accounts payable and accrued liabilities | As of March 27, 2021 and June 27, 2020, accounts payable and accrued liabilities consist of the following: March 27, June 27, 2021 2020 Accounts Payable $ 32,203,779 $ 54,916,904 Accrued Liabilities 14,889,269 10,404,629 Other Accrued Liabilities 10,994,206 10,103,628 Total Accounts Payable and Accrued Liabilities $ 58,087,254 $ 75,425,161 |
OTHER CURRENT LIABILITIES (Tabl
OTHER CURRENT LIABILITIES (Tables) | 9 Months Ended |
Mar. 27, 2021 | |
Retirement Benefits [Abstract] | |
Schedule of other current liabilities | As of March 27, 2021 and June 27, 2020, other current liabilities consist of the following: March 27, June 27, 2021 2020 Accrued Interest Payable $ 790,906 $ 9,051,650 Contingent Consideration 87,893 8,951,801 Derivatives 5,707,715 546,076 Other Current Liabilities 14,135,611 1,728,854 Total Other Current Liabilities $ 20,722,125 $ 20,278,381 |
Schedule of fair value of derivative liabilities | A reconciliation of the beginning and ending balance of derivative liabilities and change in fair value of derivative liabilities for the nine months ended March 27, 2021 is as follows: March 27, 2021 Balance at Beginning of Period $ 546,076 Initial Recognition of Derivative Liabilities 7,228,134 Change in Fair Value of Derivative Liabilities (2,066,495 ) Balance at End of Period $ 5,707,715 |
Schedule of warrants issued related to the financing transactions | The following are the warrants issued related to the financing transactions that were accounted for as derivative liabilities: Number of Warrants September Bought Deal Equity Financing 7,840,909 December Bought Deal Equity Financing 13,640,000 March 2021 Private Placement 50,000,000 (1) (2) 71,480,909 (1) During the three months ended March 27, 2021, the Company issued 50,000,000 warrants for Subordinate Voting Shares with an exercise price of C$0.50 per warrant and an expiration date of March 27, 2024. The exercise price of the warrants was denominated in a price other than the Company’s functional currency. In accordance with ASC 815, a share warrant denominated in a price other than the functional currency of the Company fails to meet the definition of equity. Accordingly, such a contract or instrument would be accounted for as derivative liabilities and measured at fair value with changes in fair value recognized in the unaudited interim Condensed Consolidated Statements of Operations at each period-end. (2) See “Note 14 - Shareholders’ Equity – Private Placement” for further information. |
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 90.01 % Risk-Free Annual Interest Rate 0.06 % Expected Life 1.00 Share Price 0.33 Exercise Price 0.40 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Mar. 27, 2021 | |
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 and nine months ended March 27, 2021 and March 28, 2020: Three Months Ended Nine Months Ended March 27, March 28, March 27, March 28, 2021 2020 2021 2020 Finance Lease Cost: Amortization of Finance Lease Right-of-Use Assets $ 438,557 $ 586,376 $ 835,497 $ 3,203,300 Interest on Lease Liabilities 2,077,724 1,635,017 4,061,842 4,617,716 Operating Lease Cost 7,512,753 6,377,596 20,935,916 19,076,003 Total Lease Expenses $ 10,029,034 $ 8,598,989 $ 25,833,255 $ 26,897,019 2021 2020 2021 2020 Gain on Sale and Leaseback Transactions, Net $ - $ - $ - $ (704,207 ) Cash Paid for Amounts Included in the Measurement of Lease Liabilities: Financing Cash Flows from Finance Leases $ - $ 509,844 $ - $ 807,432 Operating Cash Flows from Operating Leases $ 1,712,630 $ 1,625,567 $ 15,611,252 $ 16,892,734 Non-Cash Additions to Right-of-Use Assets and Lease Liabilities: Recognition of Right-of-Use Assets for Finance Leases $ - $ - $ - $ 45,614,041 Recognition of Right-of-Use Assets for Operating Leases $ - $ 8,131,728 $ - $ 144,602,158 |
Schedule of Future lease payments | Future lease payments under non-cancellable operating leases and finance leases as of March 27, 2021 are as follows: Fiscal Year Ending Operating Leases Finance Leases June 26, 2021 $ 5,504,585 $ 1,302,684 June 25, 2022 22,989,719 5,324,591 June 24, 2023 23,241,907 5,484,327 June 29, 2024 27,249,872 9,860,306 June 28, 2025 21,096,035 6,522,077 Thereafter 102,173,727 1,076,074,995 Total Lease Payments 202,255,845 1,104,568,980 Less Interest (96,771,980 ) (1,075,923,388 ) Present Value of Lease Liability $ 105,483,865 $ 28,645,592 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 9 Months Ended |
Mar. 27, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of notes payable | As of March 27, 2021 and June 27, 2020, notes payable consist of the following: March 27, June 27, 2021 2020 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. $ 83,400,000 $ 83,576,661 Non-revolving, senior secured term notes dated between October 1, 2018 and October 30, 2020, issued to accredited investors, which mature on January 31, 2022, and bear interest at a rate of 15.5% and 18.0% per annum. 104,436,180 77,675,000 Convertible debentures dated between September 16, 2020 and December 17, 2020, issued to accredited investors and qualified institutional buyers, which mature two years from issuance, and bear interest at a rate of 7.5% per annum. 5,000,000 - Promissory notes dated between January 15, 2019 through March 29, 2019, issued for deferred payments on acquisitions, which mature on varying dates from July 31, 2021 to April 1, 2022 and bear interest at rates ranging from 8.0% to 9.0% per annum. 3,762,500 16,173,250 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 10.0% per annum and require minimum monthly payments of $15,660 and $18,471. 2,233,720 2,339,564 Other 15,418 15,418 Total Notes Payable 198,847,818 179,779,893 Less Unamortized Debt Issuance Costs and Loan Origination Fees (8,832,434 ) (10,781,288 ) Net Amount $ 190,015,384 $ 168,998,605 Less Current Portion of Notes Payable (97,169,640 ) (16,188,668 ) Notes Payable, Net of Current Portion $ 92,845,744 $ 152,809,937 |
Schedule of reconciliation notes payable | A reconciliation of the beginning and ending balances of notes payable for the nine months ended March 27, 2021 is as follows: Balance at Beginning of Period $ 168,998,605 Cash Additions 15,830,279 Non-Cash Addition - Debt Modification 877,439 Debt Discount Recognized on Modification (977,370 ) Extinguishment of Debt (12,173,250 ) Paid-In-Kind Interest Capitalized 15,178,462 Cash Payments (660,094 ) Equity Component of Debt- New and Amended (5,583,407 ) Cash Paid for Debt Issuance Costs 99,931 Accretion of Debt Discount included in Discontinued Operations 5,834,043 Accretion of Debt Discount 2,590,746 Balance at End of Period $ 190,015,384 Less Current Portion of Notes Payable (97,169,640 ) Notes Payable, Net of Current Portion $ 92,845,744 |
SENIOR SECURED CONVERTIBLE CR_2
SENIOR SECURED CONVERTIBLE CREDIT FACILITY (Tables) | 9 Months Ended |
Mar. 27, 2021 | |
Risks and Uncertainties [Abstract] | |
Schedule of senior secured convertible credit facility | As of March 27, 2021 and June 27, 2020, senior secured convertible credit facility consists of the following: March 27, June 27, Tranche 2021 2020 Senior secured convertible notes dated April 23, 2019, issued to accredited investors, which mature on April 23, 2022 and bear interest at LIBOR plus 6.0% per annum. 1A $ 20,674,403 $ 21,660,583 Senior secured convertible notes dated May 22, 2019, issued to accredited investors, which mature on April 23, 2022 and bear interest at LIBOR plus 6.0% per annum. 1B 89,039,556 86,053,316 Senior secured convertible notes dated July 12, 2019, issued to accredited investors, which mature on April 23, 2022 and bear interest at LIBOR plus 6.0% per annum. 2 28,953,899 26,570,948 Senior secured convertible notes dated November 27, 2019, issued to accredited investors, which mature on April 23, 2022 and bear interest at LIBOR plus 6.0% per annum. 3 11,211,533 10,288,815 Senior secured convertible notes dated March 27, 2020, issued to accredited investors, which mature on April 23, 2022 and bear interest at LIBOR plus 6.0% per annum. 4 13,609,724 12,500,000 Amendment fee converted to senior secured convertible notes dated October 29, 2019, which mature on April 23, 2022 and bear interest at LIBOR plus 6.0% per annum. - 21,165,550 19,423,593 Senior secured convertible notes dated April 24, 2020, issued to accredited investors, which mature on April 23, 2022 and bear interest at LIBOR plus 6.0% per annum. IA-1 2,959,951 2,734,282 Senior secured convertible notes dated September 14, 2020, issued to accredited investors, which mature on April 23, 2022 and bear interest at LIBOR plus 6.0% per annum. IA-2 5,724,068 - Restatement fee issued in senior secured convertible notes dated March 27, 2020, which mature on April 23, 2022 and bear interest at LIBOR plus 6.0% per annum. - 8,513,121 8,199,863 Second restatement fee issued in senior secured convertible notes dated July 2, 2020, which mature on April 23, 2022 and bear interest at LIBOR plus 6.0% per annum. - 1,979,156 - Third restatement fee issued in senior secured convertible notes dated January 11, 2021, which mature on April 23, 2022 and bear interest at LIBOR plus 6.0% per annum. - 11,131,939 - Total Drawn on Senior Secured Convertible Credit Facility 214,962,900 187,431,400 Less Unamortized Debt Discount (57,897,490 ) (21,062,937 ) Senior Secured Convertible Credit Facility, Net $ 157,065,410 $ 166,368,463 |
Schedule of reconciliation senior secured convertible credit facilty | A reconciliation of the beginning and ending balances of senior secured convertible credit facility for the nine months ended March 27, 2021 is as follows: Tranche 1 Tranche 2 Tranche 3 Tranche 4 Incremental Advance - 1 Incremental Advance - 2 3rd Advance Amendment Restatement Fee Notes 2nd Restatement Fee Notes TOTAL Balance as of June 27, 2020 $ 102,833,447 $ 25,352,687 $ 9,680,433 $ 286,691 $ 2,168,540 $ - $ - $ 18,964,600 $ 7,082,065 $ - 166,368,463 Cash Additions - - - - - 5,420,564 10,937,127 - - - 16,357,691 Repayments (8,000,000 ) - - - - - - - - - (8,000,000 ) Principal Reallocation 585,058 (3,276 ) (1,277 ) (404,451 ) (340 ) (589 ) - (2,395 ) (24,084 ) (148,646 ) - Fees Capitalized to Debt Related to - - - - - (468,564 ) (937,127 ) - - - (1,405,691 ) Paid-In-Kind Interest Capitalized 9,396,021 2,386,229 923,996 1,115,478 226,009 303,299 194,812 1,744,352 736,039 127,802 17,154,037 Net Effect on Debt from Extinguishment 4,812,996 962,750 497,175 2,167,870 (453,979 ) - - 455,792 630,758 2,000,000 11,073,362 Equity Component Debt - New (23,562,662 ) (6,147,968 ) (2,480,673 ) (2,839,499 ) (1,296,844 ) (3,239,507 ) (7,694,405 ) (4,337,438 ) (4,551,977 ) - (56,150,973 ) Cash Paid for Debt Issuance Costs - - - - - (175,000 ) (200,000 ) - - - (375,000 ) Amortization of Debt Discounts 5,394,019 1,282,359 531,455 1,057,893 414,622 726,545 565,258 971,013 1,099,158 1,198 12,043,520 Balance as of March 27, 2021 $ 91,458,879 $ 23,832,781 $ 9,151,109 $ 1,383,982 $ 1,058,008 $ 2,566,748 $ 2,865,665 $ 17,795,924 $ 4,971,959 $ 1,980,354 $ 157,065,410 |
SHAREHOLDERS EQUITY (Tables)
SHAREHOLDERS EQUITY (Tables) | 9 Months Ended |
Mar. 27, 2021 | |
MEZZANINE EQUITY: | |
Schedule of Shares issued and outstanding | A reconciliation of the beginning and ending issued and outstanding shares is as follows: Subordinate Voting Super MM CAN USA MM Enterprises USA Balance as of June 27, 2020 403,907,218 815,295 236,123,851 725,016 Cancellation of Super Voting Shares - (815,295 ) - - Shares Issued for Cash 57,800,000 - - - Shares Issued to Settle Accounts Payable and Liabilities 14,911,047 - - - Shares Issued for Exercise of Warrants - - 27,164,323 - Redemption of MedMen Corp Redeemable Shares 133,969,228 - (133,969,228 ) - Shares Issued for Vested Restricted Stock Units 7,173,256 - - - Shares Issued for Debt Amendment Fees 4,305,148 - - - Stock Grants for Compensation 3,703,730 - - - Balance as of March 27, 2021 625,769,627 - 129,318,946 725,016 |
Schedule of VIE | As of and for the nine months ended March 27, 2021, the balances of the VIEs before any intercompany eliminations consists of the following: Venice Caregivers Foundation, Inc. LAX Fund II Group, LLC Natures Cure, Inc. TOTAL Current Assets $ 1,197,557 $ - $ 10,310,942 $ 11,508,499 Non-Current Assets 13,045,511 2,925,798 4,980,057 20,951,366 Total Assets $ 14,243,068 $ 2,925,798 $ 15,290,999 $ 32,459,865 Current Liabilities $ 10,836,220 $ 9,032,248 $ 3,083,532 $ 22,952,000 Non-Current Liabilities 7,827,937 2,386,061 7 10,214,005 Total Liabilities $ 18,664,157 $ 11,418,309 $ 3,083,539 $ 33,166,005 Non-Controlling Interest $ (4,421,089 ) $ (8,492,511 ) $ 12,207,460 $ (706,140 ) Revenues $ 6,457,626 $ - $ 9,911,450 $ 16,369,076 Net Income (Loss) Attributable to Non-Controlling Interest $ 1,504,096 $ (2,422,184 ) $ 5,427,833 $ 4,509,745 As of and for the year ended June 27, 2020, the balances of the VIEs consists of the following: Venice Caregivers Foundation, Inc. LAX Fund II Group, LLC Natures Cure, Inc. TOTAL Current Assets $ 1,233,188 $ 811,025 $ 6,639,231 $ 8,683,444 Non-Current Assets 16,867,824 3,259,563 5,032,428 25,159,815 Total Assets $ 18,101,012 $ 4,070,588 $ 11,671,659 $ 33,843,259 Current Liabilities $ 12,831,161 $ 7,481,953 $ 3,745,710 $ 24,058,824 Non-Current Liabilities 11,196,585 2,662,078 1,146,322 15,004,985 Total Liabilities $ 24,027,746 $ 10,144,031 $ 4,892,032 $ 39,063,809 Non-Controlling Interest $ (5,926,734 ) $ (6,073,443 ) $ 6,779,627 $ (5,220,550 ) Revenues $ 10,949,458 $ - $ 13,976,810 $ 24,926,268 Net Income (Loss) Attributable to Non-Controlling Interest $ (6,132,528 ) $ (3,777,079 ) $ 3,143,437 $ (6,766,170 ) |
Schedule of other non-controlling interest | The net change in the consolidated VIEs and other non-controlling interest are as follows for the nine months ended March 27, 2021: Venice Caregivers Foundation, Inc. LAX Fund II Group, LLC Natures Cure, Inc. Other Non- Controlling Interests TOTAL Balance as of June 27, 2020 $ (5,925,185 ) $ (6,070,327 ) $ 6,779,627 $ (331,561,812 ) $ (336,777,697 ) Net Income (Loss) 1,504,096 (2,422,184 ) 5,427,833 (30,614,859 ) (26,105,114 ) Equity Component on Debt and Debt Modification - - - 4,055,133 4,055,133 Deferred Tax Impact On Conversion Feature - - - (1,210,052 ) (1,210,052 ) Redemption of MedMen Corp Redeemable Shares - - - (75,460,832 ) (75,460,832 ) Balance as of March 27, 2021 $ (4,421,089 ) $ (8,492,511 ) $ 12,207,460 $ (434,792,422 ) $ (435,498,562 ) |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 9 Months Ended |
Mar. 27, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of share-based compensation expense | A summary of share-based compensation expense for the three and nine months ended March 27, 2021 and March 28, 2020 is as follows: Three Months Ended Nine Months Ended March 27, March 28, March 27, March 28, 2021 2020 2021 2020 Stock Options $ 305,565 $ (69,571 ) $ 2,851,785 $ 2,584,933 LTIP Units - 179,014 - 1,492,073 Stock Grants for Services, Net (63,189 ) 1,151,366 58,043 3,041,012 Restricted Stock Grants - 916,842 437,386 3,727,485 Total Share-Based Compensation $ 242,376 $ 2,177,651 $ 3,347,214 $ 10,845,503 |
Schedule of Black-Scholes option-pricing model | For the nine months ended March 27, 2021 and March 28, 2020, the fair value of stock options granted with a fixed exercise price was determined using the Black-Scholes option-pricing model with the following assumptions at the time of grant: Nine Months Ended March 27, March 28, 2021 2020 Weighted-Average Risk-Free Annual Interest Rate 1.05 % 1.70 % Weighted-Average Expected Annual Dividend Yield 0.0 % 0.0 % Weighted-Average Expected Stock Price Volatility 116.5 % 87.9 % Weighted-Average Expected Life in Years 7.50 7.50 Weighted-Average Estimated Forfeiture Rate 40.0 % 40.0 % |
Schedule of stock options | A reconciliation of the beginning and ending balance of stock options outstanding is as follows: Number of Stock Options Weighted- Balance as of June 27, 2020 8,618,204 $ 2.78 Granted 7,318,669 Forfeited (1,344,375 ) Balance as of March 27, 2021 14,592,498 $ 1.48 Stock Options Exercisable as of March 27, 2021 12,769,339 $ 1.45 |
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: Weighted LTIP Units LLC Average Issued and Redeemable Grant Date Outstanding Units Fair Value Balance as of June 27, 2020 and March 27, 2021 19,323,878 725,016 $ 0.52 |
Schedule of Deferred Stock Units | A reconciliation of the beginning and ending balance of DSUs outstanding is as follows: Issued and Outstanding Weighted- Balance as of June 27, 2020 1,283,567 $ 0.38 Settled (1,283,567 ) $ (0.38 ) Balance as of March 27, 2021 - $ - |
Schedule of Restricted Stock Grants | A reconciliation of the beginning and ending balance of restricted stock grants outstanding is as follows: Issued and Outstanding Vested Weighted- Balance as of June 27, 2020 7,159,164 192,459 $ 0.68 Granted (1) 28,210,512 - $ 0.17 Forfeiture of Restricted Stock (2) (4,240,013 ) - $ (0.20 ) Redemption of Vested Stock (8,107,249 ) (8,107,249 ) $ (0.26 ) Vesting of Restricted Stock - 8,533,485 $ 0.35 Balance as of March 27, 2021 23,022,414 618,695 $ 0.28 (1) Issued on December 11, 2020 to certain officers and employees of the Company and vest 37.5%, 12.5%, 37.5%, 12.5% on the 1st, 2nd, 3rd and 4th anniversary, respectively. (2) 4,240,013 of the restricted stock grants were forfeited upon the 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 Weighted-Average Exercise Price Subordinate Voting Shares MedMen Corp Redeemable Shares Total Subordinate Voting Shares MedMen Corp Redeemable Shares Total Balance as of June 27, 2020 114,998,915 40,455,731 155,454,646 $ 0.75 $ 0.60 $ 0.71 Issued 229,602,951 147,508,516 377,111,467 $ 0.18 $ 0.28 $ 0.21 Exercised - (40,000,000 ) (40,000,000 ) $ - $ (0.20 ) $ (0.20 ) Cancelled (9,796,509 ) (40,455,731 ) (50,252,240 ) $ (0.50 ) $ (0.44 ) $ (0.45 ) Balance as of March 27, 2021 334,805,358 107,508,516 442,313,874 $ 0.33 $ 0.28 $ 0.32 |
Schedule of fair value of warrants | The fair value of warrants exercisable for MedMen Corp Redeemable Shares was determined using the Black-Scholes option-pricing model with the following assumptions on the date of issuance: March 27, June 27 2021 2020 Weighted-Average Risk-Free Annual Interest Rate 0.13 % 2.20 % Weighted-Average Expected Annual Dividend Yield 0 % 0 % Weighted-Average Expected Stock Price Volatility 92.06 % 88.19 % Weighted-Average Expected Life of Warrants 1 year 1 year The fair value of warrants exercisable for the Company’s Subordinate Voting Shares was determined using the Black-Scholes option-pricing model with the following assumptions on the latest modification of December 17, 2020: Weighted-Average Risk-Free Annual Interest Rate 0.16 % Weighted-Average Expected Annual Dividend Yield 0 % Weighted-Average Expected Stock Price Volatility 0.81 Weighted-Average Expected Life of Warrants 1 year |
LOSS PER SHARE (Tables)
LOSS PER SHARE (Tables) | 9 Months Ended |
Mar. 27, 2021 | |
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 nine months ended March 27, 2021 and March 28, 2020: Three Months Ended Nine Months Ended March 27, March 28, March 27, March 28, 2021 2020 2021 2020 Net Loss from Continuing Operations Attributable to Shareholders of MedMen Enterprises, Inc. $ (21,328,677 ) $ (19,128,503 ) $ (79,310,611 ) $ (31,648,390 ) Less Deemed Dividend - Down Round Feature of Warrants - - (6,364,183 ) - Net Loss from Continuing Operations Available to Shareholders of MedMen Enterprises, Inc. $ (21,328,677 ) $ (19,128,503 ) $ (85,674,794 ) $ (31,648,390 ) Net Income (Loss) from Discontinued Operations 7,609,983 (5,843,713 ) (6,023,429 ) (58,797,102 ) Total Net Loss $ (13,718,694 ) $ (24,972,216 ) $ (91,698,223 ) $ (90,445,492 ) Weighted-Average Shares Outstanding - Basic and Diluted 541,029,620 315,384,911 482,213,951 65,930,969 Income (Loss) Per Share - Basic and Diluted: From Continuing Operations Attributable to Shareholders of MedMen Enterprises Inc. $ (0.04 ) $ (0.06 ) $ (0.18 ) $ (0.48 ) From Discontinued Operations Attributable to Shareholders of MedMen Enterprises Inc. $ 0.01 $ (0.02 ) $ (0.01 ) $ (0.89 ) |
GENERAL AND ADMINISTRATIVE EX_2
GENERAL AND ADMINISTRATIVE EXPENSES (Tables) | 9 Months Ended |
Mar. 27, 2021 | |
Research and Development [Abstract] | |
Schedule of general and administrative expenses | During the three and nine months ended March 27, 2021 and March 28, 2020, general and administrative expenses consisted of the following: Three Months Ended Nine Months Ended March 27, March 28, March 27, March 28, 2021 2020 2021 2020 Salaries and Benefits $ 8,787,495 $ 16,809,025 $ 26,904,558 $ 58,876,098 Professional Fees 5,480,969 4,634,854 12,668,101 14,850,558 Rent 7,368,225 7,188,853 22,662,161 21,288,400 Licenses, Fees and Taxes 882,742 3,404,080 5,612,825 11,232,164 Other General and Administrative 6,420,260 10,921,123 21,839,251 44,526,780 Total General and Administrative Expenses $ 28,939,691 $ 42,957,935 $ 89,686,896 $ 150,774,000 |
OTHER OPERATING EXPENSE (Tables
OTHER OPERATING EXPENSE (Tables) | 9 Months Ended |
Mar. 27, 2021 | |
Nonoperating Income (Expense) [Abstract] | |
Schedule of other operating expenses | During the three and nine months ended March 27, 2021 and March 28, 2020, other operating expense (income) consisted of the following: Three Months Ended Nine Months Ended March 27, March 28, March 27, March 28, 2021 2020 2021 2020 Loss on Disposals of Assets $ 394,621 $ - $ 779,198 $ 226,335 Restructuring and Reorganization Expense 1,600,721 - 2,781,131 5,564,104 (Gain) Loss on Settlement of Accounts Payable (175,951 ) - 849,737 - Loss (Gain) on Lease Terminations 160,449 - (17,748,368 ) (217,127 ) Gain on Disposal of Assets Held for Sale (255,391 ) - (10,709,999 ) - Other Expense (Income) (165,919 ) 1,848,209 (769,742 ) 1,209,857 Total Other Operating Expense (Income) $ 1,558,530 $ 1,848,209 $ (24,818,043 ) $ 6,783,169 |
REALIZED AND UNREALIZED LOSS _2
REALIZED AND UNREALIZED LOSS (GAIN) ON INVESTMENTS (Tables) | 9 Months Ended |
Mar. 27, 2021 | |
Restructuring and Related Activities [Abstract] | |
Schedule of realized and unrealized loss (gain) on investments and assets held for sale | During the three and nine months ended March 27, 2021 and March 28, 2020, realized and unrealized gain on investments consisted of the following: Three Months Ended Nine Months Ended March 27, March 28, March 27, March 28, 2021 2020 2021 2020 Gain on Changes in Fair Value of Investments - (86,124 ) - (16,600,604 ) Total Realized and Unrealized Gain on Investments $ - $ (86,124 ) $ - $ (16,600,604 ) |
PROVISION FOR INCOME TAXES AN_2
PROVISION FOR INCOME TAXES AND DEFERRED INCOME TAXES (Tables) | 9 Months Ended |
Mar. 27, 2021 | |
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 nine months ended March 27, 2021 and March 28, 2020: Three Months Ended Nine Months Ended March 27, March 28, March 27, March 28, 2021 2020 2021 2020 Loss from Continuing Operations Before Provision for Income Taxes $ (49,548,705 ) $ (60,651,820 ) $ (103,314,604 ) $ (196,997,174 ) Income Tax Benefit (Expense) 32,207,910 13,836,022 (2,101,121 ) 47,088,266 Effective Tax Rate 65 % 23 % 2 % 24 % |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 9 Months Ended |
Mar. 27, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of net operating loss of discontinued operation | The Company will continue to operate the remaining Arizona and New York operations until the ultimate sale of the components. The operating results of the discontinued operations are summarized as follows: Three Months Ended Nine Months Ended March 27, March 28, March 27, March 28, 2021 2020 2021 2020 Revenue $ 7,387,484 $ 5,865,570 $ 15,768,813 $ 18,856,242 Cost of Goods Sold 4,621,955 4,746,321 9,788,393 14,051,806 Gross Profit 2,765,529 1,119,249 5,980,420 4,804,436 Expenses: General and Administrative 3,215,889 4,471,200 9,415,436 14,853,915 Sales and Marketing 21,756 2,986 52,857 45,991 Depreciation and Amortization 1,003,276 518,691 2,528,380 2,932,558 Gain on Disposal of Assets (13,375,430 ) - (13,375,430 ) - Impairment Expense - - - 46,702,659 Total Expenses (9,134,509 ) 4,992,877 (1,378,757 ) 64,535,123 Operating Income (Loss) from Discontinued Operations 11,900,038 (3,873,628 ) 7,359,177 (59,730,687 ) Other Expense (Income): Interest Expense 2,629,476 1,985,129 7,549,165 4,066,905 Interest Income (1,545 ) - (1,545 ) - Amortization of Debt Discount and Loan Origination Fees 2,197,946 323,916 5,834,043 3,444,098 Other (Income) Expense (177,006 ) (584 ) (174,341 ) 77,494 Total Other Expense 4,648,871 2,308,461 13,207,322 7,588,497 Income (Loss) on Discontinued Operations Before Provision for Income Taxes 7,251,167 (6,182,089 ) (5,848,145 ) (67,319,184 ) Provision for Income Tax Benefit (Expense) 358,816 338,376 (175,284 ) 8,522,082 Income (Loss) on Discontinued Operations $ 7,609,983 $ (5,843,713 ) $ (6,023,429 ) $ (58,797,102 ) |
Schedule of assets included in discontinued operation | The carrying amounts of assets and liabilities in the disposal group are summarized as follows: March 27, June 27, 2021 2020 Carrying Amounts of the Assets Included in Discontinued Operations: Cash and Cash Equivalents $ 1,115,295 $ 1,198,390 Restricted Cash 5,280 8,844 Accounts Receivable 744,830 283,730 Prepaid Expenses 371,185 172,403 Inventory 6,252,896 6,985,120 Other Current Assets - 64,600 TOTAL CURRENT ASSETS (1) Property and Equipment, Net 15,344,556 15,213,580 Operating Lease Right-of-Use Assets 24,428,302 26,349,789 Intangible Assets, Net 14,255,791 18,936,173 Goodwill 960,691 960,692 Other Assets 525,646 1,688,316 TOTAL NON-CURRENT ASSETS (1) TOTAL ASSETS OF THE DISPOSAL GROUP CLASSIFIED AS HELD FOR SALE $ 64,004,472 $ 71,861,637 Carrying Amounts of the Liabilities Included in Discontinued Operations: Accounts Payable and Accrued Liabilities $ 4,898,172 $ 6,231,931 Income Taxes Payable 1,273,275 775,714 Other Current Liabilities 326,567 22,747 Current Portion of Operating Lease Liabilities 2,425,234 1,824,862 TOTAL CURRENT LIABILITIES (1) Operating Lease Liabilities, Net of Current Portion 25,540,209 25,417,774 Finance Lease Liabilities, Net of Current Portion 349,312 - Deferred Tax Liabilities 9,710,451 14,663,497 TOTAL NON-CURRENT LIABILITIES (1) TOTAL LIABILITIES OF THE DISPOSAL GROUP CLASSIFIED AS HELD FOR SALE $ 44,523,220 $ 48,936,525 (1) The assets and liabilities of the remaining Arizona disposal group and MedMen NY, Inc. classified as held for sale are classified as current on the unaudited interim Condensed Consolidated Balance Sheets as of March 27, 2021 because it is probable that the sale will occur and proceeds will be collected within one year. The assets and liabilities of Level Up classified as held for sale are classified as current in the amounts of $21,181,051 and $15,060,302, respectively, on the audited Consolidated Balance Sheets as of June 27, 2020. The assets and liabilities of MedMen NY, Inc. classified as held for sale are classified as current and noncurrent in the amounts of $4,440,127and $46,228,551, respectively, on the audited Consolidated Balance Sheets as of June 27, 2020. The liabilities of MedMen NY, Inc. classified as held for sale are classified as current and noncurrent in the amounts of $2,915,276 and $30,960,947, respectively, on the audited Consolidated Balance Sheets as of June 27, 2020. |
NATURE OF OPERATIONS (Details N
NATURE OF OPERATIONS (Details Narrative) | Jan. 24, 2018shares |
MM Enterprises USA [Member] | |
Shares received | 217,184,382 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | Mar. 27, 2021 | Jun. 27, 2020 |
Accounting Policies [Abstract] | ||
Restricted cash | $ 730 | $ 1,029 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Mar. 27, 2021 | Jun. 27, 2020 |
Inventory Disclosure [Abstract] | ||
Raw Materials | $ 965,641 | $ 1,790,050 |
Work-in-Process | 4,760,097 | 6,229,152 |
Finished Goods | 11,321,882 | 10,957,776 |
Total Inventory | $ 17,047,620 | $ 18,976,978 |
INVENTORIES (Details Narrative)
INVENTORIES (Details Narrative) | 3 Months Ended |
Mar. 27, 2021USD ($) | |
Inventory Disclosure [Abstract] | |
Write down inventory | $ 1,714,000 |
OTHER CURRENT ASSETS (Details)
OTHER CURRENT ASSETS (Details) - USD ($) | Mar. 27, 2021 | Jun. 27, 2020 |
Other Current Assets | $ 8,177,203 | $ 9,105,457 |
Other Current Assets [Member] | ||
Investments | 3,036,791 | 3,786,791 |
Excise Tax Receivable | 5,254,595 | |
Notes Receivable | 1,670,038 | |
Other Current Assets | 3,470,374 | 64,071 |
Total Other Current Assets | $ 8,177,203 | $ 9,105,457 |
OTHER CURRENT ASSETS (Details 1
OTHER CURRENT ASSETS (Details 1) | 9 Months Ended |
Mar. 27, 2021USD ($) | |
Fair value beginning balance | $ 3,786,791 |
Settlement of Liabilities | (750,000) |
Fair value evening balance | 3,036,791 |
The Hacienda Company LLC [Member] | |
Fair value beginning balance | 750,000 |
Settlement of Liabilities | (750,000) |
Fair value evening balance | |
Old Pal [Member] | |
Fair value beginning balance | 1,970,000 |
Settlement of Liabilities | |
Fair value evening balance | 1,970,000 |
Other Investments [Member] | |
Fair value beginning balance | 1,066,791 |
Settlement of Liabilities | |
Fair value evening balance | $ 1,066,791 |
OTHER CURRENT ASSETS (Details N
OTHER CURRENT ASSETS (Details Narrative) | Mar. 27, 2021USD ($) |
The Hacienda Company LLC [Member] | |
Settlement of outstanding balances | $ 750,000 |
Old Pal [Member] | |
Fair Value of investment | $ 1,970,000 |
ASSETS HELD FOR SALE (Details)
ASSETS HELD FOR SALE (Details) | 9 Months Ended |
Mar. 27, 2021USD ($) | |
Balance at Beginning of Period | $ 37,900,006 |
Balance at End of Period | 64,216,871 |
Available For Sale Subsidiaries [Member] | |
Balance at Beginning of Period | 12,066,428 |
Transferred In | 6,614,986 |
Gain on the Sale of Assets Held for Sale | 10,709,999 |
Proceeds from Sale | (24,750,298) |
Ongoing Activity from Discontinued Operations | (4,641,116) |
Balance at End of Period | |
Discontinued Operations [Member] | |
Balance at Beginning of Period | 71,849,729 |
Transferred In | |
Gain on the Sale of Assets Held for Sale | |
Proceeds from Sale | |
Ongoing Activity from Discontinued Operations | (7,845,258) |
Balance at End of Period | 64,004,471 |
Total [Member] | |
Balance at Beginning of Period | 84,128,557 |
Transferred In | 6,614,987 |
Gain on the Sale of Assets Held for Sale | 10,709,999 |
Proceeds from Sale | (24,750,298) |
Ongoing Activity from Discontinued Operations | (12,486,373) |
Balance at End of Period | 64,216,871 |
Pharma Cann Assets [Member] | |
Balance at Beginning of Period | 212,400 |
Transferred In | |
Gain on the Sale of Assets Held for Sale | |
Proceeds from Sale | |
Ongoing Activity from Discontinued Operations | |
Balance at End of Period | $ 212,400 |
ASSETS HELD FOR SALE (Details N
ASSETS HELD FOR SALE (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Nov. 17, 2020 | Jun. 26, 2020 | Mar. 27, 2021 | Mar. 28, 2020 | Dec. 26, 2020 | Jun. 27, 2020 | |
Carrying Amount of the Assets Included in Assets Held for Sale | ||||||
Equity consideration | $ 18,885,912 | $ 50,193,938 | ||||
MME Evanston Retail, LLC [Member] | ||||||
Carrying Amount of the Assets Included in Assets Held for Sale | ||||||
Membership interests | 100.00% | |||||
Staunton [Member] | ||||||
Carrying Amount of the Assets Included in Assets Held for Sale | ||||||
Membership interests | 100.00% | |||||
Purchase agreement [Member] | Third party [Member] | ||||||
Carrying Amount of the Assets Included in Assets Held for Sale | ||||||
Purchase consideration for ownership interest | 3,750,000 | |||||
Purchase consideration, cash consideration | 3,500,000 | |||||
Equity consideration | 250,000 | |||||
Gain on sale of membership interests | $ 255,391 | |||||
Separate Agreements [Member] | ||||||
Carrying Amount of the Assets Included in Assets Held for Sale | ||||||
Membership interests | 100.00% | |||||
Gain on sale of membership interests | $ 332,747 | |||||
Aggregate sale price | $ 1,500,000 | |||||
Agreement Description | Non-binding term sheet for the retail location located in Seaside, California for an aggregate sales price of $1,500,000 wherein $750,000 is to be paid upon the date of close in addition to $750,000 paid in equal monthly installments over twelve months through a promissory note. The transaction closed in October 2020 and the Company transferred all outstanding membership interests in PHSL, LLC. Upon deconsolidation, the Company will not have any continuing involvement with the former subsidiary. The Company recognized a loss upon sale of membership interests of $332,747 for the difference between the aggregate consideration and the book value of the assets as of the disposition date, less direct costs to sell | |||||
July 1, 2020 [Member] | ||||||
Carrying Amount of the Assets Included in Assets Held for Sale | ||||||
Gain on sale of membership interests | $ 12,415,479 | |||||
Consideration | 20,000,000 | |||||
Cash received | 10,000,000 | |||||
Additional Cash | $ 8,000,000 | |||||
Secured promissory note | $ 2,000,000 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Mar. 27, 2021 | Jun. 27, 2020 |
Investments, Debt and Equity Securities [Abstract] | ||
Land and Buildings | $ 37,421,326 | $ 37,400,378 |
Finance Lease Right-of-Use Assets | 9,124,138 | 26,074,429 |
Furnitures and Fixtures | 12,428,701 | 12,393,369 |
Leasehold improvements | 59,551,369 | 56,026,595 |
Equipment and Software | 25,823,935 | 25,379,767 |
Construction in Progress | 28,866,937 | 36,833,422 |
Total Property and Equipment | 173,216,406 | 194,107,960 |
Less Accumulated Depreciation | (39,039,417) | (30,484,865) |
Property and Equipment, Net | $ 134,176,989 | $ 163,623,095 |
PROPERTY AND EQUIPMENT (Detai_2
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 27, 2021 | Mar. 28, 2020 | Mar. 27, 2021 | Mar. 28, 2020 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Depreciation Expense | $ 3,540,369 | $ 3,680,139 | $ 12,116,847 | $ 13,331,921 |
Cost of Good Sold | 42,452 | 536,729 | 383,618 | 1,640,176 |
Right of use assets | 438,557 | 586,376 | 835,497 | 3,203,300 |
Borrowing costs | $ 2,106,988 | $ 4,415,716 | ||
Average capitalization rate | 13.70% | 15.10% | ||
Labor related costs | 52,351 | $ 137,558 | 559,515 | $ 913,627 |
Construction in progress | $ 6,992 | $ 19,475 | $ 155,378 | $ 192,130 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) | Mar. 27, 2021 | Jun. 27, 2020 |
Total Intangible Assets | $ 158,024,460 | $ 166,862,965 |
Less Accumulated Amortization | (42,690,375) | (30,457,820) |
Intangible Assets, Net | 115,334,085 | 136,405,145 |
Dispensary License [Member] | ||
Total Intangible Assets | 118,881,616 | 125,565,281 |
Less Accumulated Amortization | (20,685,860) | (15,860,670) |
Capitalized Software [Member] | ||
Total Intangible Assets | 9,343,352 | 9,255,026 |
Less Accumulated Amortization | (4,071,756) | (2,273,432) |
Customer Relationship [Member] | ||
Total Intangible Assets | 15,927,600 | 15,927,600 |
Less Accumulated Amortization | (14,210,226) | (6,261,515) |
Intellectual Property [Member] | ||
Total Intangible Assets | 6,276,955 | 8,520,121 |
Less Accumulated Amortization | (3,006,772) | (5,496,231) |
Management Agreement [Member] | ||
Total Intangible Assets | 7,594,937 | 7,594,937 |
Less Accumulated Amortization | $ (715,761) | $ (565,972) |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 27, 2021 | Mar. 28, 2020 | Mar. 27, 2021 | Mar. 28, 2020 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Amortization expense | $ 4,452,573 | $ 4,333,212 | $ 13,104,322 | $ 10,660,164 |
Impairment on intellectual property asset | 1,573,563 | |||
Share based compensation | $ 24,832 | $ 41,293 | $ 62,951 | $ 313,535 |
OTHER ASSETS (Details)
OTHER ASSETS (Details) - USD ($) | Mar. 27, 2021 | Jun. 27, 2020 |
Other Current Assets | $ 8,177,203 | $ 9,105,457 |
Other Assets [Member] | ||
Long-Term Security Diposits for Leases | 4,817,042 | 8,177,871 |
Loans and Other Long-Term Diposits | 7,808,326 | 7,568,738 |
Other Current Assets | 5,593 | 53,648 |
Total Other Assets | $ 12,630,961 | $ 15,800,257 |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Details) - USD ($) | Mar. 27, 2021 | Jun. 27, 2020 |
Total Accounts Payable and Accrued Liabilities | $ 20,722,125 | $ 20,278,381 |
Accounts Payable and Accrued Liabilities [Member] | ||
Accounts Payable | 32,203,779 | 54,916,904 |
Accrued Liabilities | 14,889,269 | 10,404,629 |
Other Accrued Liabilities | 10,994,206 | 10,103,628 |
Total Accounts Payable and Accrued Liabilities | $ 58,087,254 | $ 75,425,161 |
OTHER CURRENT LIABILITIES (Deta
OTHER CURRENT LIABILITIES (Details) - USD ($) | Mar. 27, 2021 | Jun. 27, 2020 |
Total Accounts Payable and Accrued Liabilities | $ 20,722,125 | $ 20,278,381 |
Total Other Current Liabilities | 3,790,561 | 4,215,533 |
Other Current Liabilities and Other Non-Current Liabilities [Member] | ||
Accrued Interest Payable | 790,906 | 9,051,650 |
Contingent Consideration | 87,893 | 8,951,801 |
Derivatives | 5,707,715 | 546,076 |
Total Accounts Payable and Accrued Liabilities | 14,135,611 | 1,728,854 |
Total Other Current Liabilities | $ 20,722,125 | $ 20,278,381 |
OTHER CURRENT LIABILITIES (De_2
OTHER CURRENT LIABILITIES (Details 1) | 9 Months Ended |
Mar. 27, 2021shares | |
Number of Warrants | 71,480,909 |
Equity Financing [Member] | |
Number of Warrants | 7,840,909 |
Equity Financing [Member] | |
Number of Warrants | 13,640,000 |
Private Placement [Member] | |
Number of Warrants | 50,000,000 |
OTHER CURRENT LIABILITIES (De_3
OTHER CURRENT LIABILITIES (Details 2) - USD ($) | 9 Months Ended | |
Mar. 27, 2021 | Mar. 28, 2020 | |
Payables and Accruals [Abstract] | ||
Balance at Beginning of Period | $ 546,076 | |
Initial Recognition of Derivative Liabilities | 7,228,134 | |
Change in Fair Value of Derivative Liabilities | (2,066,495) | $ (8,041,429) |
Balance at End of Period | $ 5,707,715 |
OTHER CURRENT LIABILITIES (De_4
OTHER CURRENT LIABILITIES (Details 3) | 9 Months Ended |
Mar. 27, 2021$ / shares | |
Payables and Accruals [Abstract] | |
Expected Stock Price Volatility | 90.01% |
Risk-Free Annual Interest Rate | 6.00% |
Expected Life | 1 year |
Share Price | $ 0.33 |
Exercise Price | $ 0.4 |
LEASES (Details)
LEASES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 27, 2021 | Mar. 28, 2020 | Mar. 27, 2021 | Mar. 28, 2020 | |
Finance Lease Cost | ||||
Amortization of Finance Lease Right-of-Use Assets | $ 438,557 | $ 586,376 | $ 835,497 | $ 3,203,300 |
Interest on Lease Liabilities | 2,077,724 | 1,635,017 | 4,061,842 | 4,617,716 |
Operating Lease Cost | 7,512,753 | 6,377,596 | 20,935,916 | 19,076,003 |
Total Lease Expenses | 10,029,034 | 8,598,989 | 25,833,255 | 26,897,019 |
Gain on Sale and Leaseback Transactions, Net | (704,207) | |||
Cash Paid for Amount Includedin the Measurementof Lease Liabilities: | ||||
Financing Cash Flow from Financing Leases | 509,844 | 807,432 | ||
Operating Cash Flow from Operating Leases | 1,712,630 | 1,625,567 | 15,611,252 | 16,892,734 |
Non Cash Additional to Right-of-Use Assets and Lease Liabilities | ||||
Recognition of Right-of-Use Assets for Finance Leases | 45,614,041 | |||
Recognition of Right-of-Use Assets for Operating Leases | $ 8,131,728 | $ 144,602,158 |
LEASES (Details 1)
LEASES (Details 1) | Mar. 27, 2021USD ($) |
Operating Leases | |
June 26, 2021 | $ 5,504,585 |
June 25, 2022 | 22,989,719 |
June 24, 2023 | 23,241,907 |
June 29, 2024 | 27,249,872 |
June 28, 2025 | 21,096,035 |
Thereafter | 102,173,727 |
Total lease payment | 202,255,845 |
Less: Interest | (96,771,980) |
Present Value of Lease Liabilities | 105,483,865 |
Finance Leases | |
June 26, 2021 | 1,302,684 |
June 25, 2022 | 5,324,591 |
June 24, 2023 | 5,484,327 |
June 29, 2024 | 9,860,306 |
June 28, 2025 | 6,522,077 |
Thereafter | 1,076,074,995 |
Total lease payment | 1,104,568,980 |
Less: Interest | (1,075,923,388) |
Present Value of Lease Liabilities | $ 28,645,592 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | 9 Months Ended | |||
Mar. 27, 2021 | Oct. 30, 2020 | Sep. 16, 2020 | Jul. 02, 2020 | |
Accrued interest | 8.60% | |||
Finance lease discount rate | 17.77% | |||
Finance Weighted-average remaining lease term | 48 years | |||
Operating lease discount rate | 10.25% | |||
Operating Weighted-average remaining lease term | 5 years | |||
Warrants issued | 77,052,790 | 30,000,000 | ||
REIT [Member] | ||||
Gain on lease modification | $ 16,274,615 | |||
Warrants issued | 3,500,000 | |||
Exercisable price | $ 0.34 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - USD ($) | Mar. 27, 2021 | Jun. 27, 2020 |
Finance liabilities | $ 204,770 | $ 1,644,044 |
Total notes Payables | 92,845,744 | 152,809,937 |
Convertible Notes Payable [Member] | ||
Finance liabilities | 83,400,000 | 83,576,661 |
Non-revolving, senior secured term notes | 104,436,180 | 77,675,000 |
Convertible debentures | 5,000,000 | |
Promissory notes | 3,762,500 | 16,173,250 |
Promissory notes | 2,233,720 | 2,339,564 |
Other | 15,418 | 15,418 |
Total notes Payables | 198,847,818 | 179,779,893 |
Less. Unamortization Debt Issuance Cost an Loan Origination Fess | (8,832,434) | (10,781,288) |
Net Amount | 190,015,384 | 168,998,605 |
Less Current Portion of Notes Payable | (97,169,640) | (16,188,668) |
Notes Payables, net of Current Portion | $ 92,845,744 | $ 152,809,937 |
NOTES PAYABLE (Details 1)
NOTES PAYABLE (Details 1) - Notes Payable [Member] | 9 Months Ended |
Mar. 27, 2021USD ($) | |
Balance at beginning of period Notes payables | $ 168,998,605 |
Cash additions | 15,830,279 |
Non-cash Addition-Debt modification | 877,439 |
Debt discount Recognized on modifacation | (977,370) |
Extinguishment of Debt | (12,173,250) |
Paid in kind interest Capitalized | 15,178,462 |
Cash payments | (660,094) |
Equity Component of Debt- New and Amended | (5,583,407) |
Cash paid for debt issuance costs | 99,931 |
Accretion of Debt Discount included in Discontinued Operations | 5,834,043 |
Accreation of debt discount | 2,590,746 |
Balance at ending of period Notes payables | 190,015,384 |
Less Current portion of notes payables | (97,169,640) |
Notes payable, Net of Current portion | $ 92,845,744 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||
Dec. 17, 2020 | Nov. 20, 2020 | Oct. 30, 2020 | Sep. 16, 2020 | Mar. 27, 2021 | Mar. 28, 2020 | Mar. 27, 2021 | Mar. 28, 2020 | Sep. 29, 2020 | Jul. 02, 2020 | Jun. 27, 2020 | |
Amendment fee | $ 834,000 | ||||||||||
Warrants issued | 77,052,790 | 30,000,000 | |||||||||
Principal term Loan | $ 7,705,279 | $ 3,000,000 | $ 3,000,000 | $ 77,675,000 | |||||||
Increase in additional paid in capital | $ 405,480 | $ 892,713,747 | $ 892,713,747 | $ 791,172,613 | |||||||
Warrants adjusted price | $ 0.17 | ||||||||||
Warrants exercise price | $ 0.20 | $ 0.20 | $ 0.60 | ||||||||
Warrants exercisable, issued | 20,227,863 | ||||||||||
Warrants exercisable, per share | $ 0.34 | ||||||||||
Existing warrants, cancelled | 20,227,863 | ||||||||||
Maturity Date | Sep. 14, 2025 | Sep. 16, 2025 | Dec. 31, 2022 | ||||||||
Fair value of warrant issued | $ 799,949 | ||||||||||
Additional debt discount | $ 542,986 | 906,436 | |||||||||
Loss on extinguishment | 6,420,526 | $ 11,570,696 | 17,493,887 | $ 43,800,931 | |||||||
Gain on disposal of assets | 394,621 | 779,198 | $ 226,335 | ||||||||
Tranche 2 [Member] | |||||||||||
Warrants exercise price | $ 0.17 | ||||||||||
Warrants exercisable, issued | 3,777,475 | ||||||||||
Debt conversion price | $ 0.15 | ||||||||||
Unsecured convertible debt | $ 1,000,000 | ||||||||||
Tranche 5 [Member] | |||||||||||
Warrants issued | 77,052,790 | 5,700,000 | |||||||||
Increase in funds under facility | $ 12,000,000 | ||||||||||
Description | The additional amounts are funded through incremental term loans at an interest rate of 18.0% per annum wherein 12.0% shall be paid in cash monthly in arrears and 6.0% shall accrue monthly as payment-in-kind. In connection with each incremental draw under the amended Facility, the Company shall issue warrants equal to 200% of the incremental term loan amount, divided by the greater of (a) $0.20 per share and (b) 115% multiplied | ||||||||||
Rate of Interest | 18.00% | ||||||||||
Tranche 4 [Member] | |||||||||||
Warrants exercise price | $ 0.18 | ||||||||||
Warrants exercisable, issued | 3,597,100 | ||||||||||
Debt conversion price | $ 0.15 | ||||||||||
Unsecured convertible debt | $ 1,000,000 | ||||||||||
Tranche 3 [Member] | |||||||||||
Warrants exercise price | $ 0.17 | ||||||||||
Warrants exercisable, issued | 3,592,425 | ||||||||||
Debt conversion price | $ 0.15 | ||||||||||
Unsecured convertible debt | $ 1,000,000 | ||||||||||
Acquisition Promissory Note [Member] | |||||||||||
Gain on disposal of assets | 13,375,430 | ||||||||||
Amendment to Promissory Note [Member] | |||||||||||
Principal amount | $ 3,500,000 | $ 3,500,000 | |||||||||
Maturity Date | Apr. 1, 2022 | ||||||||||
Interest rate | 9.00% | ||||||||||
Loss on extinguishment | $ 2,410,504 | ||||||||||
Convertible Debt [Member] | |||||||||||
Warrants exercise price | $ 0.21 | ||||||||||
Warrants exercisable, issued | 3,293,413 | ||||||||||
Proceeds convertible debenture | $ 10,000,000 | ||||||||||
Interest rate | 7.50% | ||||||||||
Additional tranches amount | $ 1,000,000 | ||||||||||
Maximum tranche amount | $ 10,000,000 | ||||||||||
Interest paid | 7.50% | ||||||||||
Conversion of debt Amount | $ 1,000,000 | ||||||||||
Conversion price | $ 0.17 | ||||||||||
Voting share, greater than | $ 0.25 | ||||||||||
Hankey Capital [Member] | |||||||||||
Principal term Loan | $ 77,675,000 | ||||||||||
Description | Shall accrue monthly to the outstanding principal as payment-in-kind effective March 1, 2020 through July 2, 2021. Thereafter until maturity on January 31, 2022, one-half of the interest (7.75% per annum) shall be payable monthly in cash and one-half of the interest (7.75% per annum) shall be paid-in-kind. | ||||||||||
Rate of Interest | 15.50% | ||||||||||
Loss on extinguishment | $ 4,010,022 |
SENIOR SECURED CONVERTIBLE CR_3
SENIOR SECURED CONVERTIBLE CREDIT FACILITY (Details ) - USD ($) | Mar. 27, 2021 | Jun. 27, 2020 |
Total Drawn On Senior Secured Convertible Credit Facility | $ 214,962,900 | $ 187,431,400 |
Less Unamortize Debt Discount | (57,897,490) | (21,062,937) |
Senior Secured Convertible Credit Facility Net | 157,065,410 | 166,368,463 |
Secured Convertible Note [Member] | ||
Total Drawn On Senior Secured Convertible Credit Facility | 20,674,403 | 21,660,583 |
Secured Convertible Note 1 [Member] | ||
Total Drawn On Senior Secured Convertible Credit Facility | 89,039,556 | 86,053,316 |
Secured Convertible Note 2 [Member] | ||
Total Drawn On Senior Secured Convertible Credit Facility | 28,953,899 | 26,570,948 |
Secured Convertible Note 3 [Member] | ||
Total Drawn On Senior Secured Convertible Credit Facility | 11,211,533 | 10,288,815 |
Secured Convertible Note 4 [Member] | ||
Total Drawn On Senior Secured Convertible Credit Facility | 13,609,724 | 12,500,000 |
Secured Convertible Note 5 [Member] | ||
Total Drawn On Senior Secured Convertible Credit Facility | 21,165,550 | 19,423,593 |
Secured Convertible Note 6 [Member] | ||
Total Drawn On Senior Secured Convertible Credit Facility | 2,959,951 | 2,734,282 |
Secured Convertible Note 7 [Member] | ||
Total Drawn On Senior Secured Convertible Credit Facility | 5,724,068 | 0 |
Secured Convertible Note 8 [Member] | ||
Total Drawn On Senior Secured Convertible Credit Facility | 8,513,121 | 8,199,863 |
Secured Convertible Note 9 [Member] | ||
Total Drawn On Senior Secured Convertible Credit Facility | 1,979,156 | 0 |
Secured Convertible Note 9 [Member] | ||
Total Drawn On Senior Secured Convertible Credit Facility | $ 11,131,939 | $ 0 |
SENIOR SECURED CONVERTIBLE CR_4
SENIOR SECURED CONVERTIBLE CREDIT FACILITY (Details 1) | 9 Months Ended |
Mar. 27, 2021USD ($) | |
Senior Secured Convertible, Total [Member] | |
Balance at beginning of period Notes payables | $ 166,368,463 |
Cash additions | 16,357,691 |
Repayments | (8,000,000) |
Principal Reallocation | 0 |
Fees Capitalized to Debt Related to Debt Modifications | (1,405,691) |
Paid-In-Kind Interest Capitalized | 17,154,037 |
Net Effect on Debt from Extinguishment | 11,073,362 |
Net Effect on Equity Component of New and Amended Debt | (56,150,973) |
Cash Paid for Debt Issuance Costs | (375,000) |
Amortization of Debt Discounts | 12,043,520 |
Balance at ending of period Notes payables | 157,065,410 |
Tranche 1 [Member] | |
Balance at beginning of period Notes payables | 102,833,447 |
Cash additions | 0 |
Repayments | (8,000,000) |
Principal Reallocation | 585,058 |
Fees Capitalized to Debt Related to Debt Modifications | 0 |
Paid-In-Kind Interest Capitalized | 9,396,021 |
Net Effect on Debt from Extinguishment | 4,812,996 |
Net Effect on Equity Component of New and Amended Debt | (23,562,662) |
Cash Paid for Debt Issuance Costs | 0 |
Amortization of Debt Discounts | 5,394,019 |
Balance at ending of period Notes payables | 91,458,879 |
Tranche 2 [Member] | |
Balance at beginning of period Notes payables | 25,352,687 |
Cash additions | 0 |
Repayments | 0 |
Principal Reallocation | (3,276) |
Fees Capitalized to Debt Related to Debt Modifications | 0 |
Paid-In-Kind Interest Capitalized | 2,386,229 |
Net Effect on Debt from Extinguishment | 962,750 |
Net Effect on Equity Component of New and Amended Debt | (6,147,968) |
Cash Paid for Debt Issuance Costs | 0 |
Amortization of Debt Discounts | 1,282,359 |
Balance at ending of period Notes payables | 23,832,781 |
Tranche 3 [Member] | |
Balance at beginning of period Notes payables | 9,680,433 |
Cash additions | 0 |
Repayments | 0 |
Principal Reallocation | (1,277) |
Fees Capitalized to Debt Related to Debt Modifications | 0 |
Paid-In-Kind Interest Capitalized | 923,996 |
Net Effect on Debt from Extinguishment | 497,175 |
Net Effect on Equity Component of New and Amended Debt | (2,480,673) |
Cash Paid for Debt Issuance Costs | 0 |
Amortization of Debt Discounts | 531,455 |
Balance at ending of period Notes payables | 9,151,109 |
Tranche 4 [Member] | |
Balance at beginning of period Notes payables | 286,691 |
Cash additions | 0 |
Repayments | 0 |
Principal Reallocation | (404,451) |
Fees Capitalized to Debt Related to Debt Modifications | 0 |
Paid-In-Kind Interest Capitalized | 1,115,478 |
Net Effect on Debt from Extinguishment | 2,167,870 |
Net Effect on Equity Component of New and Amended Debt | (2,839,499) |
Cash Paid for Debt Issuance Costs | 0 |
Amortization of Debt Discounts | 1,057,893 |
Balance at ending of period Notes payables | 1,383,982 |
Incremental Advance - 1 [Member] | |
Balance at beginning of period Notes payables | 2,168,540 |
Cash additions | 0 |
Repayments | 0 |
Principal Reallocation | (340) |
Fees Capitalized to Debt Related to Debt Modifications | 0 |
Paid-In-Kind Interest Capitalized | 226,009 |
Net Effect on Debt from Extinguishment | (453,979) |
Net Effect on Equity Component of New and Amended Debt | (1,296,844) |
Cash Paid for Debt Issuance Costs | 0 |
Amortization of Debt Discounts | 414,622 |
Balance at ending of period Notes payables | 1,058,008 |
Incremental Advance - 2 [Member] | |
Balance at beginning of period Notes payables | 0 |
Cash additions | 5,420,564 |
Repayments | 0 |
Principal Reallocation | (589) |
Fees Capitalized to Debt Related to Debt Modifications | (468,564) |
Paid-In-Kind Interest Capitalized | 303,299 |
Net Effect on Debt from Extinguishment | 0 |
Net Effect on Equity Component of New and Amended Debt | (3,239,507) |
Cash Paid for Debt Issuance Costs | (175,000) |
Amortization of Debt Discounts | 726,545 |
Balance at ending of period Notes payables | 2,566,748 |
3rd Advance [Member] | |
Balance at beginning of period Notes payables | 0 |
Cash additions | 10,937,127 |
Repayments | 0 |
Principal Reallocation | 0 |
Fees Capitalized to Debt Related to Debt Modifications | (937,127) |
Paid-In-Kind Interest Capitalized | 194,812 |
Net Effect on Debt from Extinguishment | 0 |
Net Effect on Equity Component of New and Amended Debt | (7,694,405) |
Cash Paid for Debt Issuance Costs | (200,000) |
Amortization of Debt Discounts | 565,258 |
Balance at ending of period Notes payables | 2,865,665 |
Amendment Fee Notes [Member] | |
Balance at beginning of period Notes payables | 18,964,600 |
Cash additions | 0 |
Repayments | 0 |
Principal Reallocation | (2,395) |
Fees Capitalized to Debt Related to Debt Modifications | 0 |
Paid-In-Kind Interest Capitalized | 1,744,352 |
Net Effect on Debt from Extinguishment | 455,792 |
Net Effect on Equity Component of New and Amended Debt | (4,337,438) |
Cash Paid for Debt Issuance Costs | 0 |
Amortization of Debt Discounts | 971,013 |
Balance at ending of period Notes payables | 17,795,924 |
Restatement Fee Notes [Member] | |
Balance at beginning of period Notes payables | 7,082,065 |
Cash additions | 0 |
Repayments | 0 |
Principal Reallocation | (24,084) |
Fees Capitalized to Debt Related to Debt Modifications | 0 |
Paid-In-Kind Interest Capitalized | 736,039 |
Net Effect on Debt from Extinguishment | 630,758 |
Net Effect on Equity Component of New and Amended Debt | (4,551,977) |
Cash Paid for Debt Issuance Costs | 0 |
Amortization of Debt Discounts | 1,099,158 |
Balance at ending of period Notes payables | 4,971,959 |
2nd Restatement Fee Notes [Member] | |
Balance at beginning of period Notes payables | 0 |
Cash additions | 0 |
Repayments | 0 |
Principal Reallocation | (148,646) |
Fees Capitalized to Debt Related to Debt Modifications | 0 |
Paid-In-Kind Interest Capitalized | 127,802 |
Net Effect on Debt from Extinguishment | 2,000,000 |
Net Effect on Equity Component of New and Amended Debt | 0 |
Cash Paid for Debt Issuance Costs | 0 |
Amortization of Debt Discounts | 1,198 |
Balance at ending of period Notes payables | $ 1,980,354 |
SENIOR SECURED CONVERTIBLE CR_5
SENIOR SECURED CONVERTIBLE CREDIT FACILITY (Details Narrative ) - USD ($) | Sep. 14, 2020 | Sep. 16, 2020 | Mar. 27, 2021 | Sep. 26, 2020 | Mar. 28, 2020 | Mar. 27, 2021 | Mar. 28, 2020 |
conversion price | $ 0.20 | $ 0.17 | |||||
Convertible notes | $ 468,564 | $ 32,744,770 | |||||
Secured convertible notes | $ 5,000,000 | 6,723,954 | |||||
Loss on Extinguishment of Debt | $ 6,420,526 | $ 11,570,696 | 17,493,887 | $ 43,800,931 | |||
Amendment fee | 834,000 | ||||||
November 1, 2020 [Member] | |||||||
Amount of borrowing under convertible facility | 8,000,000 | 8,000,000 | |||||
Loss on Extinguishment of Debt | $ 943,706 | ||||||
GGP [Member] | |||||||
Exercise price | $ 0.20 | ||||||
conversion price | $ 0.200 | ||||||
Secured convertible notes | $ 5,000,000 | ||||||
Description of Note | The conversion price for 5.0% of the existing Notes outstanding prior to Tranche 4 and Incremental Advance (including paid-in-kind interest accrued on such Notes), being 5.0% of an aggregate principal amount of $170,729,923, was amended to $0.20 per share. | ||||||
Warrant Issued | 25,000,000 | ||||||
Cancelled Shares | 1,080,255 | ||||||
Warrants replaced | 16,875,001 | ||||||
GGP [Member] | On July 2, 2020[Member] | |||||||
conversion price | $ 0.28 | ||||||
Secured convertible notes | $ 5,000,000 | ||||||
Description of Amendments Penalty | the Convertible Facility with a 5% prepayment penalty until 2nd anniversary of the Fourth Amendment and 3% prepayment penalty thereafter. | ||||||
Amendment fee | $ 2,000,000 | ||||||
Description Of Amendments | the conversion price for 52% of the tranches 1 through 3 and the first amendment fee notes outstanding under the Convertible Facility were amended to $0.34 per share | ||||||
GGP [Member] | |||||||
Loss on Extinguishment of Debt | $ (10,129,655) |
SHAREHOLDERS EQUITY (Details)
SHAREHOLDERS EQUITY (Details) | 9 Months Ended |
Mar. 27, 2021shares | |
Subordinate Voting Shares [Member] | |
Shares issued and outstanding, Beginning of the period | 403,907,218 |
Cancellation of Super Voting Shares | |
Shares Issued for Cash | 57,800,000 |
Shares Issued to Settle Accounts Payable and Liabilities | 14,911,047 |
Shares Issued for Exercise of Warrants | |
Redemption of MedMen Corp Redemable Shares | 133,969,228 |
Shares Issued for Vested Restricted Stock Units | 7,173,256 |
Shares Issued for Debt Amendment Fees | 4,305,148 |
Stock Grant for Compensation | 3,703,730 |
Shares issued and outstanding, End of the period | 625,769,627 |
Super Voting Shares [Member] | |
Shares issued and outstanding, Beginning of the period | 815,295 |
Cancellation of Super Voting Shares | (815,295) |
Shares Issued for Cash | |
Shares Issued to Settle Accounts Payable and Liabilities | |
Shares Issued for Exercise of Warrants | |
Redemption of MedMen Corp Redemable Shares | |
Shares Issued for Vested Restricted Stock Units | |
Shares Issued for Debt Amendment Fees | |
Stock Grant for Compensation | |
Shares issued and outstanding, End of the period | |
MM CAN USA Class B Redeemable Units[Member] | |
Shares issued and outstanding, Beginning of the period | 236,123,851 |
Cancellation of Super Voting Shares | |
Shares Issued for Cash | |
Shares Issued to Settle Accounts Payable and Liabilities | |
Shares Issued for Exercise of Warrants | 27,164,323 |
Redemption of MedMen Corp Redemable Shares | (133,969,228) |
Shares Issued for Vested Restricted Stock Units | |
Shares Issued for Debt Amendment Fees | |
Stock Grant for Compensation | |
Shares issued and outstanding, End of the period | 129,318,946 |
MM Enterprises USA Common Units[Member] | |
Shares issued and outstanding, Beginning of the period | 725,016 |
Cancellation of Super Voting Shares | |
Shares Issued for Cash | |
Shares Issued to Settle Accounts Payable and Liabilities | |
Shares Issued for Exercise of Warrants | |
Redemption of MedMen Corp Redemable Shares | |
Shares Issued for Vested Restricted Stock Units | |
Shares Issued for Debt Amendment Fees | |
Stock Grant for Compensation | |
Shares issued and outstanding, End of the period | 725,016 |
SHAREHOLDERS EQUITY (Details 1)
SHAREHOLDERS EQUITY (Details 1) - USD ($) | 9 Months Ended | 12 Months Ended |
Mar. 27, 2021 | Jun. 27, 2020 | |
VIEs, Total [Member] | ||
Current Assets | $ 11,508,499 | $ 8,683,444 |
Non-Current Assets | 20,951,366 | 25,159,815 |
Total Assets | 32,459,865 | 33,843,259 |
Current Liabilities | 22,952,000 | 24,058,824 |
Non-Current Liabilities | 10,214,005 | 15,004,985 |
Total Liabilities | 33,166,005 | 39,063,809 |
Non-Controlling Interest | (706,140) | (5,220,550) |
Revenues | 16,369,076 | 24,926,268 |
Net (Loss) Income Attributable to Non-Controlling Interest | 4,509,745 | (6,766,170) |
Venice Caregivers Foundation, Inc. [Member] | ||
Current Assets | 1,197,557 | 1,233,188 |
Non-Current Assets | 13,045,511 | 16,867,824 |
Total Assets | 14,243,068 | 18,101,012 |
Current Liabilities | 10,836,220 | 12,831,161 |
Non-Current Liabilities | 7,827,937 | 11,196,585 |
Total Liabilities | 18,664,157 | 24,027,746 |
Non-Controlling Interest | (4,421,089) | (5,926,734) |
Revenues | 6,457,626 | 10,949,458 |
Net (Loss) Income Attributable to Non-Controlling Interest | 1,504,096 | (6,132,528) |
LAX Fund 2 Group, L.L.C [Member] | ||
Current Assets | 811,025 | |
Non-Current Assets | 2,925,798 | 3,259,563 |
Total Assets | 2,925,798 | 4,070,588 |
Current Liabilities | 9,032,248 | 7,481,953 |
Non-Current Liabilities | 2,386,061 | 2,662,078 |
Total Liabilities | 11,418,309 | 10,144,031 |
Non-Controlling Interest | (8,492,511) | (6,073,443) |
Revenues | ||
Net (Loss) Income Attributable to Non-Controlling Interest | (2,422,184) | (3,777,079) |
Natures Cure, Inc. [Member] | ||
Current Assets | 10,310,942 | 6,639,231 |
Non-Current Assets | 4,980,057 | 5,032,428 |
Total Assets | 15,290,999 | 11,671,659 |
Current Liabilities | 3,083,532 | 3,745,710 |
Non-Current Liabilities | 7 | 1,146,322 |
Total Liabilities | 3,083,539 | 4,892,032 |
Non-Controlling Interest | 12,207,460 | 6,779,627 |
Revenues | 9,911,450 | 13,976,810 |
Net (Loss) Income Attributable to Non-Controlling Interest | $ 5,427,833 | $ 3,143,437 |
SHAREHOLDERS EQUITY (Details 2)
SHAREHOLDERS EQUITY (Details 2) | 9 Months Ended |
Mar. 27, 2021USD ($)shares | |
Venice Caregivers Foundation, Inc. [Member] | |
Shares issued and Redeemable, Beginning of the period | $ (5,925,185) |
Net Income (Loss) | 1,504,096 |
Equity Component on Debt and Debt Modification | |
Deferred Tax Impact on Conversion Feature | |
Redemption of MedMen Crop Redeemable Shares | shares | |
Shares issued and Redemption, End of the period | $ (4,421,089) |
LAX Fund 2 Group, L.L.C [Member] | |
Shares issued and Redeemable, Beginning of the period | (6,070,327) |
Net Income (Loss) | (2,422,184) |
Equity Component on Debt and Debt Modification | |
Deferred Tax Impact on Conversion Feature | |
Redemption of MedMen Crop Redeemable Shares | shares | |
Shares issued and Redemption, End of the period | $ (8,492,511) |
Natures Cure, Inc. [Member] | |
Shares issued and Redeemable, Beginning of the period | 6,779,627 |
Net Income (Loss) | 5,427,833 |
Equity Component on Debt and Debt Modification | |
Deferred Tax Impact on Conversion Feature | |
Redemption of MedMen Crop Redeemable Shares | shares | |
Shares issued and Redemption, End of the period | $ 12,207,460 |
Other Non Controlling Interests [Member] | |
Shares issued and Redeemable, Beginning of the period | (331,561,812) |
Net Income (Loss) | (30,614,859) |
Equity Component on Debt and Debt Modification | 4,055,133 |
Deferred Tax Impact on Conversion Feature | $ (1,210,052) |
Redemption of MedMen Crop Redeemable Shares | shares | (75,460,832) |
Shares issued and Redemption, End of the period | $ (434,792,422) |
Total [Member] | |
Shares issued and Redeemable, Beginning of the period | (336,777,697) |
Net Income (Loss) | (26,105,114) |
Equity Component on Debt and Debt Modification | 4,055,133 |
Deferred Tax Impact on Conversion Feature | $ (1,210,052) |
Redemption of MedMen Crop Redeemable Shares | shares | (75,460,832) |
Shares issued and Redemption, End of the period | $ (435,498,562) |
SHAREHOLDERS EQUITY (Details Na
SHAREHOLDERS EQUITY (Details Narrative) | Mar. 27, 2021 | Jun. 27, 2020 |
MM CAN USA Class B Redeemable Units[Member] | ||
Non-controlling interest, shares issued | 17.13% | |
MM Enterprises USA Common Units [Member] | ||
Non-controlling interest, shares issued | 0.10% | 0.11% |
MM CAN USA [Member] | ||
Non-controlling interest, shares issued | 36.89% |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 27, 2021 | Mar. 28, 2020 | Mar. 27, 2021 | Mar. 28, 2020 | |
Total Share-Based Compensation | $ 242,376 | $ 2,177,651 | $ 4,164,466 | $ 10,845,503 |
Equity Option [Member] | ||||
Total Share-Based Compensation | 305,565 | (69,571) | 2,851,785 | 2,584,933 |
LTIP Units [Member] | ||||
Total Share-Based Compensation | 179,014 | 1,492,073 | ||
Stock Grants [Member] | ||||
Total Share-Based Compensation | (63,189) | 1,151,366 | 58,043 | 3,041,012 |
Restricted Stock Grants [Member] | ||||
Total Share-Based Compensation | $ 916,842 | $ 437,386 | $ 3,727,485 |
SHARE-BASED COMPENSATION (Det_2
SHARE-BASED COMPENSATION (Details 1) | 9 Months Ended | |
Mar. 27, 2021 | Mar. 28, 2020 | |
Investments, Debt and Equity Securities [Abstract] | ||
Weighted Average Risk Free Annual Interest Rate | 1.05% | 1.70% |
Weighted Average Expected Annual Dividend Yield | 0.00% | 0.00% |
Weighted Average Expected Stock Price Volatility | 116.50% | 87.90% |
Weighted-Average Expected Life in Years | 7 years 6 months | 7 years 6 months |
Weighted-Average Estimated Forfeiture Rate | 40.00% | 40.00% |
SHARE-BASED COMPENSATION (Det_3
SHARE-BASED COMPENSATION (Details 2) | 9 Months Ended |
Mar. 27, 2021$ / sharesshares | |
Investments, Debt and Equity Securities [Abstract] | |
Number of Stock Options, Beginning Balance | shares | 8,618,204 |
Number of Stock Options, Granted | shares | 7,318,669 |
Number of Stock Options, Forfeited | shares | (1,344,375) |
Number of Stock Options, Ending Balance | shares | 14,592,498 |
Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 2.78 |
Weighted Average Exercise Price, Granted | $ / shares | |
Weighted Average Exercise Price, Forfeited | $ / shares | |
Weighted Average Exercise Price, Ending Balance | $ / shares | $ 1.48 |
Number of Stock Option Exerciable | shares | 12,769,339 |
Weighted Average Exerciable Price | $ / shares | $ 1.45 |
SHARE-BASED COMPENSATION (Det_4
SHARE-BASED COMPENSATION (Details 3) | Mar. 27, 2021$ / sharesshares |
Investments, Debt and Equity Securities [Abstract] | |
LTIP Issued And Outstanding | 19,323,878 |
LIC Redeemable Units | 725,016 |
Weighted Average grant date fair Value | $ / shares | $ 0.52 |
SHARE-BASED COMPENSATION (Det_5
SHARE-BASED COMPENSATION (Details 4) | 9 Months Ended |
Mar. 27, 2021$ / sharesshares | |
Investments, Debt and Equity Securities [Abstract] | |
Issued And Outstanding Beginning Balance | shares | 1,283,567 |
Issued And Outstanding, Settled | shares | (1,283,567) |
Issued And Outstanding, Ending Balance | shares | 0 |
Weighted Average Fair Value, Begning Balance | $ / shares | $ 0.38 |
Weighted Average fair Value, Settled | $ / shares | (0.38) |
Weighted Average Fair Value, Ending Balance | $ / shares | $ 0 |
SHARE-BASED COMPENSATION (Det_6
SHARE-BASED COMPENSATION (Details 5) | 9 Months Ended |
Mar. 27, 2021$ / sharesshares | |
Investments, Debt and Equity Securities [Abstract] | |
Issued And Outstanding, Beginning Balance | 7,159,164 |
Issued And Outstanding, Granted | 28,210,512 |
Issued And Outstanding, Forfeiture of Restricted Stock | (4,240,013) |
Issued And Outstanding, Redemption of Vested Stock | (8,107,249) |
Issued And Outstanding, Vesting of Restricted Stock | |
Issued And Outstanding, Ending Balance | 23,022,414 |
Vested, Beginning Balance | 192,459 |
Vested, Granted | |
Vested, Forfeiture of Restricted Stock | |
Vested, Redemption of Vested Stock | (8,107,249) |
Vested, Vesting of Restricted Stock | 8,533,485 |
Vested, Ending Balance | 618,695 |
Weighted Average fair Value Beginning Balance | $ / shares | $ 0.68 |
Weighted Average fair Value, Granted | $ / shares | 0.17 |
Weighted Average fair Value, Forfeiture of Restricted Stock | $ / shares | (0.20) |
Weighted Average fair Value, Redemption of Vested Stock | $ / shares | (0.26) |
WeightedAverage Fair Value, Vesting of Restricted Stock | $ / shares | 0.35 |
WeightedAverage Fair Value, Ending Balance | $ / shares | $ 0.28 |
SHARE-BASED COMPENSATION (Det_7
SHARE-BASED COMPENSATION (Details 6) - Warrant [Member] | 9 Months Ended |
Mar. 27, 2021$ / sharesshares | |
Beginning Balance | shares | 155,454,646 |
Issued | shares | 377,111,467 |
Exercised | shares | (40,000,000) |
Cancelled | shares | (50,252,240) |
Ending Balance | shares | 442,313,874 |
Weighted Average Exercise Price, Beginning balance | $ / shares | $ 0.71 |
Weighted Average Exercise Price, issued | $ / shares | 0.21 |
Weighted Average Exercise Price, exercised | $ / shares | (0.20) |
Weighted Average Exercise Price, Cancelled | $ / shares | (0.45) |
Weighted Average Exercise Price, Ending | $ / shares | $ 0.32 |
[Subordinate Voting Shares [Member]] | |
Beginning Balance | shares | 114,998,915 |
Issued | shares | 229,602,951 |
Exercised | shares | |
Cancelled | shares | (9,796,509) |
Ending Balance | shares | 334,805,358 |
Weighted Average Exercise Price, Beginning balance | $ / shares | $ 0.75 |
Weighted Average Exercise Price, issued | $ / shares | 0.18 |
Weighted Average Exercise Price, exercised | $ / shares | |
Weighted Average Exercise Price, Cancelled | $ / shares | (0.50) |
Weighted Average Exercise Price, Ending | $ / shares | $ 0.33 |
MedMax Corp Redeemable Shares [Member] | |
Beginning Balance | shares | 40,455,731 |
Issued | shares | 147,508,516 |
Exercised | shares | (40,000,000) |
Cancelled | shares | (40,455,731) |
Ending Balance | shares | 107,508,516 |
Weighted Average Exercise Price, Beginning balance | $ / shares | $ 0.6 |
Weighted Average Exercise Price, issued | $ / shares | 0.28 |
Weighted Average Exercise Price, exercised | $ / shares | (0.20) |
Weighted Average Exercise Price, Cancelled | $ / shares | (0.44) |
Weighted Average Exercise Price, Ending | $ / shares | $ 0.28 |
SHARE-BASED COMPENSATION (Det_8
SHARE-BASED COMPENSATION (Details 7) | 9 Months Ended | 12 Months Ended |
Mar. 27, 2021 | Jun. 27, 2020 | |
Investments, Debt and Equity Securities [Abstract] | ||
Weighted Average Risk Free Annual Interest Rate | 0.13% | 2.20% |
Weighted Average Expected Annual Dividend Yield | 0.00% | 0.00% |
Weighted Average Expected Stock Price Volatility | 92.06% | 88.19% |
Weighted Average Expected Life OF Warrants | 1 year | 1 year |
SHARE-BASED COMPENSATION (Det_9
SHARE-BASED COMPENSATION (Details 8) | 1 Months Ended |
Dec. 17, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Weighted Average Risk Free Annual Interest Rate | 0.16% |
Weighted Average Expected Annual Dividend Yield | 0.00% |
Weighted Average Expected Stock Price Volatility | 85.39% |
Weighted Average Expected Life of Warrants | 1 year |
SHARE-BASED COMPENSATION (De_10
SHARE-BASED COMPENSATION (Details Narrative) - USD ($) | 2 Months Ended | 9 Months Ended | 12 Months Ended |
Aug. 30, 2020 | Mar. 27, 2021 | Jun. 27, 2020 | |
Exercise price Maturity date | 10 years | ||
Restricted Voting Shares | 28,210,512 | ||
Cancelable Warrants | 97,785,140 | ||
DSU [Member] | |||
Deferred stock units issued and outstanding | 0 | 1,283,567 | |
Voting Shares Service Amount | $ 250,000 | ||
Warrant One [Member] | Subordinate Voting Shares [Member] | |||
Warrants outstanding contractual life | 4 years 9 months 18 days | 3 years 9 months 18 days | |
Warrant One [Member] | MedMax Corp Redeemable Shares [Member] | |||
Warrants outstanding contractual life | 4 years 6 months | 2 years 6 months |
LOSS PER SHARE (Details)
LOSS PER SHARE (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 27, 2021 | Mar. 28, 2020 | Mar. 27, 2021 | Mar. 28, 2020 | |
Earnings Per Share [Abstract] | ||||
Net Loss from Continuing Operations Attributable to Shareholders of MedMen Enterprises, Inc. | $ (21,328,677) | $ (19,128,503) | $ (79,310,611) | $ (31,648,390) |
Less: Deemed Dividend - Down Round Feature of Warrants | (6,364,183) | |||
Net Loss from Continuing Operations Available to Shareholders of MedMen Enterprises, Inc. | (21,328,677) | (19,128,503) | (85,674,794) | (31,648,390) |
Net Income (Loss) from Discontinued Operations | 7,609,983 | (5,843,713) | (6,023,429) | (58,797,102) |
Total Net Loss | $ (13,718,694) | $ (24,972,216) | $ (91,698,223) | $ (90,445,492) |
Weighted-Average Shares Outstanding - Basic and Diluted | 541,029,620 | 315,384,911 | 482,213,951 | 65,930,969 |
Income (Loss) Per Share - Basic and Diluted: | ||||
From Continuing Operations Attributable to Shareholders of MedMen Enterprises Inc. | $ (0.04) | $ (0.06) | $ (0.18) | $ (0.48) |
From Discontinued Operations Attributable to Shareholders of MedMen Enterprises Inc. | $ 0.01 | $ (0.02) | $ (0.01) | $ (0.89) |
GENERAL AND ADMINISTRATIVE EX_3
GENERAL AND ADMINISTRATIVE EXPENSES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 27, 2021 | Mar. 28, 2020 | Mar. 27, 2021 | Mar. 28, 2020 | |
Unusual or Infrequent Items, or Both [Abstract] | ||||
Professional Fees | $ 8,787,495 | $ 16,809,025 | $ 26,904,558 | $ 58,876,098 |
Salaries and Benefits | 5,480,969 | 4,634,854 | 12,668,101 | 14,850,558 |
Rent | 7,368,225 | 7,188,853 | 22,662,161 | 21,288,400 |
Licenses, Fees and Taxes | 882,742 | 3,404,080 | 5,612,825 | 11,232,164 |
Other General and Administrative Expenses | 6,420,260 | 10,921,123 | 21,839,251 | 44,526,780 |
Total General and Administrative Expenses | $ 28,939,691 | $ 42,957,935 | $ 89,686,896 | $ 150,774,000 |
OTHER OPERATING EXPENSE (Detail
OTHER OPERATING EXPENSE (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 27, 2021 | Mar. 28, 2020 | Mar. 27, 2021 | Mar. 28, 2020 | |
Research and Development [Abstract] | ||||
Loss on Disposals of Assets | $ 394,621 | $ 779,198 | $ 226,335 | |
Restructuring and Reorganization Expense | 1,600,721 | 2,781,131 | 5,564,104 | |
(Gain) Loss on Settlement of Accounts Payable | (175,951) | 849,737 | ||
Loss (Gain) on Lease Terminations | 160,449 | (17,748,368) | (217,127) | |
Gain on Disposal of Assets Held for Sale | (255,391) | (10,709,999) | ||
Other Expense (Income) | (165,919) | 1,848,209 | (769,742) | 1,209,857 |
Total Other Operating Expense (Income) | $ 1,558,530 | $ 1,848,209 | $ (24,818,043) | $ 6,783,169 |
REALIZED AND UNREALIZED LOSS _3
REALIZED AND UNREALIZED LOSS (GAIN) ON INVESTMENTS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 27, 2021 | Mar. 28, 2020 | Mar. 27, 2021 | Mar. 28, 2020 | |
Restructuring and Related Activities [Abstract] | ||||
Gain on Changes in Fair Value of Investments | $ (86,124) | $ (16,600,604) | ||
Tota Realized and Unrealized Loss (Gain) on Investments and Assets Held for Sale | $ (86,124) | $ (16,600,604) |
PROVISION FOR INCOME TAXES AN_3
PROVISION FOR INCOME TAXES AND DEFERRED INCOME TAXES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 27, 2021 | Mar. 28, 2020 | Mar. 27, 2021 | Mar. 28, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Loss from Continuing Operations Before Provision for Income Taxes | $ (49,548,705) | $ (60,651,820) | $ (103,314,604) | $ (196,997,174) |
Income Tax Benefit (Expense) | $ 32,207,910 | $ 13,836,022 | $ (2,101,121) | $ 47,088,266 |
Effective Tax Rate | 65.00% | 23.00% | 2.00% | 24.00% |
PROVISION FOR INCOME TAXES AN_4
PROVISION FOR INCOME TAXES AND DEFERRED INCOME TAXES (Details Narrative) | 9 Months Ended |
Mar. 27, 2021USD ($) | |
Income Tax Disclosure [Abstract] | |
Net operating losses | $ 76,700,000 |
Unrealized net operating loss | $ 2,500,000 |
Operating loss expiration date | Dec. 31, 2038 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 9 Months Ended | |
Mar. 27, 2021 | Jul. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Legal claim damages | $ 2,200,000 | |
Payments for Legal Disputes Settlements | $ 2,400,000 | |
Seeking damages | 11,000,000 | |
Accrued damages | $ 584,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 9 Months Ended | |
Mar. 27, 2021 | Jul. 27, 2020 | |
Restructuring support fees paid | $ 2,172,709 | |
Fund LP II [Member] | ||
Due from related party | $ 1,820,204 | |
Due to related party | 1,093,896 | |
FundLP [Member] | ||
Due from related party | 1,289,513 | |
Due to related party | 1,986,697 | |
Other [Member] | ||
Due to other related party | $ 1,476,921 | |
Due to related party | $ 1,476,221 | |
Lynch [Member] | ||
Stock option received | 124,868 | |
Bossidy [Member] | ||
Stock option received | 124,868 |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 27, 2021 | Mar. 28, 2020 | Mar. 27, 2021 | Mar. 28, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | ||||
Revenue | $ 7,387,484 | $ 5,865,570 | $ 15,768,813 | $ 18,856,242 |
Cost of goods sold | 4,621,955 | 4,746,321 | 9,788,393 | 14,051,806 |
Gross Profit | 2,765,529 | 1,119,249 | 5,980,420 | 4,804,436 |
Expenses: | ||||
General and Administrative | 3,215,889 | 4,471,200 | 9,415,436 | 14,853,915 |
Sales and Marketing | 21,756 | 2,986 | 52,857 | 45,991 |
Depreciation and Amortization | 1,003,276 | 518,691 | 2,528,380 | 2,932,558 |
Gain on Disposal of Assets | (13,375,430) | (13,375,430) | ||
Impairment Expense | 46,702,659 | |||
Total Expenses | (9,134,509) | 4,992,877 | (1,378,757) | 64,535,123 |
Operating Income (Loss) from Discontinued Operations | 11,900,038 | (3,873,628) | 7,359,177 | (59,730,687) |
Other Expense (Income): | ||||
Interest Expense | 2,629,476 | 1,985,129 | 7,549,165 | 4,066,905 |
Interest Income | (1,545) | (1,545) | ||
Amortization of Debt Discount and Loan Origination Fees | 2,197,946 | 323,916 | 5,834,043 | 3,444,098 |
Other (Income) Expense | (177,006) | (584) | (174,341) | 77,494 |
Total Other Expense | 4,648,871 | 2,308,461 | 13,207,322 | 7,588,497 |
Income (Loss) on Discontinued Operations Before Provision for Income Taxes | 7,251,167 | (6,182,089) | (5,848,145) | (67,319,184) |
Provision for Income Tax Benefit (Expenses) | 358,816 | 338,376 | (175,284) | 8,522,082 |
Income (Loss) on Discontinued Operations | $ 7,609,983 | $ (5,843,713) | $ (6,023,429) | $ (58,797,102) |
DISCONTINUED OPERATIONS (Deta_2
DISCONTINUED OPERATIONS (Details 1) - USD ($) | Mar. 27, 2021 | Jun. 27, 2020 |
Carraying Amounts of the Assets Included in Assets Held For Sale | ||
Cash and Cash Equivalents | $ 1,115,295 | $ 1,198,390 |
Restricted Cash | 5,280 | 8,844 |
Accounts Receivable | 744,830 | 283,730 |
Prepaid Expenses | 371,185 | 172,403 |
Inventory | 6,252,896 | 6,985,120 |
Other Current Assets | 64,600 | |
Property and Equipment, Net | 15,344,556 | 15,213,580 |
Operating Lease Right-of-Use Assets | 24,428,302 | 26,349,789 |
Intangible Assets, Net | 14,255,791 | 18,936,173 |
Goodwill | 960,691 | 960,692 |
Other Assets | 525,646 | 1,688,316 |
TOTAL ASSETS OF THE DISPOSAL GROUP CLASSIFIED AS HELD FOR SALE | 64,004,472 | 71,861,637 |
Carraying Amounts of the Liabilities Included in Liabilities Held For Sale | ||
Accounts Payable and Accrued Liabilities | 4,898,172 | 6,231,931 |
Income Taxes Payable | 1,273,275 | 775,714 |
Total Accounts Payable and Accrued Liabilities | 326,567 | 22,747 |
Current Portion of Operating Lease Liabilities | 2,425,234 | 1,824,862 |
Operating Lease Liabilities, Net of Current Portion | 25,540,209 | 25,417,774 |
Finance Lease Liabilities, Net of Current Portion | 349,312 | |
Deferred Tax Liabilities | 9,710,451 | 14,663,497 |
TOTAL LIABILITIES OF THE DISPOSAL GROUP CLASSIFIED AS HELD FOR SALE | $ 44,523,220 | $ 48,936,525 |
DISCONTINUED OPERATIONS (Deta_3
DISCONTINUED OPERATIONS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 27, 2021 | Mar. 28, 2020 | Mar. 27, 2021 | Mar. 28, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | ||||
Sales price | $ 25,150,000 | |||
Loss upon sale of membership interests | 1,628,124 | |||
Interest expense and amortization of debt discounts and loan origination fees | $ 4,797,506 | $ 2,308,388 | $ 13,329,130 | $ 7,507,064 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] | 1 Months Ended |
Apr. 21, 2021$ / sharesshares | |
Warrant One [Member] | |
Exercise price | $ / shares | $ 0.26 |
Warrants Cancelled | shares | 32,451,923 |
Warrant Two [Member] | |
Exercise price | $ / shares | $ 0.26 |
Warrants Cancelled | shares | 6,490,385 |
Warrant Three [Member] | |
Exercise price | $ / shares | $ 0.20 |
Warrants Cancelled | shares | 16,875,000 |
Warrant Four [Member] | |
Exercise price | $ / shares | $ 0.16 |
Warrants Cancelled | shares | 41,967,832 |