Cover
Cover - shares | 3 Months Ended | |
Sep. 24, 2022 | Oct. 31, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 24, 2022 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --06-30 | |
Entity File Number | 000-56199 | |
Entity Registrant Name | MEDMEN ENTERPRISES INC. | |
Entity Central Index Key | 0001776932 | |
Entity Tax Identification Number | 98-1431779 | |
Entity Incorporation, State or Country Code | A1 | |
Entity Address, Address Line One | 8740 S Sepulveda Blvd | |
Entity Address, Address Line Two | Suite 105 | |
Entity Address, City or Town | Los Angeles | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 90045 | |
City Area Code | (424) | |
Local Phone Number | 330-2082 | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 1,301,683,764 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 24, 2022 | Jun. 25, 2022 |
Current Assets: | ||
Cash and Cash Equivalents | $ 21,097,057 | $ 10,795,999 |
Accounts Receivable and Prepaid Expenses | 5,376,069 | 7,539,767 |
Inventory | 9,117,809 | 10,010,731 |
Assets Held for Sale | 44,185,218 | 123,158,751 |
Receivable for Assets Held for Sale | 11,500,000 | |
Other Assets | 7,403,829 | 9,990,992 |
Total Current Assets | 98,679,982 | 161,496,240 |
Operating Lease Right-of-Use Assets | 44,461,062 | 47,649,270 |
Property and Equipment, Net | 59,965,935 | 64,107,792 |
Intangible Assets, Net | 34,057,051 | 35,746,114 |
Goodwill | 9,810,049 | 9,810,049 |
Other Non-Current Assets | 4,157,513 | 4,414,219 |
TOTAL ASSETS | 251,131,592 | 323,223,684 |
Current Liabilities: | ||
Accounts Payable and Accrued Liabilities | 35,355,136 | 38,905,818 |
Income Taxes Payable | 64,710,033 | 58,646,291 |
Other Liabilities | 17,121,093 | 16,704,283 |
Derivative Liabilities | 7,555,153 | 6,749,563 |
Current Portion of Operating Lease Liabilities | 12,199,351 | 10,925,128 |
Current Portion of Finance Lease Liabilities | 4,150,484 | 4,061,273 |
Current Portion of Notes Payable | 66,294,249 | 97,003,922 |
Liabilities Held for Sale | 26,195,800 | 86,595,102 |
Total Current Liabilities | 233,581,299 | 319,591,380 |
Operating Lease Liabilities | 47,280,217 | 50,917,244 |
Finance Lease Liabilities | 26,905,824 | 26,553,287 |
Other Non-Current Liabilities | 2,987,812 | 3,082,277 |
Deferred Tax Liability | 40,295,319 | 35,213,671 |
Senior Secured Convertible Credit Facility | 138,746,070 | 132,005,663 |
Notes Payable | 74,898,640 | 74,372,898 |
TOTAL LIABILITIES | 564,695,181 | 641,736,420 |
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, 1,301,683,764 and 1,301,423,950 shares issued and outstanding as of September 24, 2022 and June 26, 2022, respectively) | ||
Additional Paid-In Capital | 1,058,145,437 | 1,057,228,873 |
Accumulated Deficit | (897,613,980) | (901,758,875) |
Total Equity Attributable to Shareholders of MedMen Enterprises Inc. | 160,531,457 | 155,469,998 |
Non-Controlling Interest | (474,095,046) | (473,982,734) |
TOTAL SHAREHOLDERS’ EQUITY | (313,563,589) | (318,512,736) |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ 251,131,592 | $ 323,223,684 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 24, 2022 | Jun. 25, 2022 |
Class of Warrant or Right [Line Items] | ||
Preferred Stock, Par Value | $ 0 | $ 0 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Subordinate Voting Shares [Member] | ||
Class of Warrant or Right [Line Items] | ||
Subordinate voting, shares issued | 1,301,683,764 | 1,301,423,950 |
Subordinate voting, shares outstanding | 1,301,683,764 | 1,301,423,950 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Sep. 24, 2022 | Sep. 25, 2021 | |
Income Statement [Abstract] | ||
Revenue | $ 30,044,048 | $ 36,735,904 |
Cost of Goods Sold | 15,187,672 | 19,349,990 |
Gross Profit | 14,856,376 | 17,385,914 |
Operating Expenses: | ||
General and Administrative | 17,846,117 | 32,649,234 |
Sales and Marketing | 443,790 | 593,224 |
Depreciation and Amortization | 3,946,523 | 5,823,617 |
Realized and Unrealized Changes in Fair Value of Contingent Consideration | (863,856) | |
Impairment Expense | 1,663,911 | 435,241 |
Other Operating (Income) Expense | (2,555,118) | 2,199,028 |
Total Operating Expenses | 20,481,367 | 41,700,344 |
Loss from Operations | (5,624,991) | (24,314,430) |
Non-Operating (Income) Expenses: | ||
Interest Expense | 10,052,691 | 8,171,764 |
Interest Income | (33) | (23,008) |
Accretion of Debt Discount and Loan Origination Fees | 1,581,967 | 6,347,471 |
Change in Fair Value of Derivatives | 805,590 | (2,105,415) |
Gain on Extinguishment of Debt | (10,233,610) | |
Total Non-Operating Expenses | 12,440,215 | 2,157,202 |
Loss from Continuing Operations Before Provision for Income Taxes | (18,065,206) | (26,471,632) |
Provision for Income Tax Expense | (2,193,542) | (19,691,908) |
Net Loss from Continuing Operations | (20,258,748) | (46,163,540) |
Net Income (Loss) from Discontinued Operations, Net of Taxes | 24,306,649 | (14,446,491) |
Net Income (Loss) | 4,047,901 | (60,610,031) |
Net Loss Attributable to Non-Controlling Interest | (112,312) | (5,280,003) |
Net Income (Loss) Attributable to Shareholders of MedMen Enterprises Inc. | $ 4,160,213 | $ (55,330,028) |
Earnings (Loss) Per Share - Basic and Diluted: | ||
From Continuing Operations Attributable to Shareholders of MedMen Enterprises Inc. | $ (0.02) | $ (0.04) |
From Discontinued Operations Attributable to Shareholders of MedMen Enterprises Inc. | $ 0.02 | $ (0.02) |
Weighted-Average Shares Outstanding - Basic and Diluted | 1,301,659,701 | 942,696,052 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) | Subordinate Voting [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total Equity Attributable To Shareholders Of Medmen [Member] | Noncontrolling Interest [Member] | Total |
Beginning balance, value at Jun. 27, 2021 | $ 908,992,686 | $ (717,232,706) | $ 191,759,980 | $ (445,393,599) | $ (253,633,619) | |
Beginning balance, shares at Jun. 27, 2021 | 726,866,374 | |||||
Net Loss | (55,330,028) | (55,330,028) | (5,280,003) | (60,610,031) | ||
Controlling Interest Equity Transactions | ||||||
Shares Issued for Cash, Net of Fees | 73,393,745 | 73,393,745 | 73,393,745 | |||
Shares Issued for Cash, Net of Fees, Shares | 406,249,973 | |||||
Shares Issued to Settle Debt and Accrued Interest | 4,030,000 | 4,030,000 | 4,030,000 | |||
Shares Issued to Settle Debt and Accrued Interest, Shares | 20,833,333 | |||||
Shares Issued to Settle Accounts Payable and Liabilities | 700,000 | 700,000 | 700,000 | |||
Shares Issued to Settle Accounts Payable and Liabilities, Shares | 4,182,730 | |||||
Equity Component of Debt - New and Amended | 41,388,048 | 41,388,048 | 41,388,048 | |||
Redemption of MedMen Corp Redeemable Shares | 1,121,441 | 374,701 | 1,496,142 | (1,496,142) | ||
Redemption of MedMen Corp Redeemable Shares, Shares | 4,054,278 | |||||
Shares Issued for Vested Restricted Stock Units and Cashless Exercise of Options | ||||||
Shares Issued for Vested Restricted Stock Units and Cashless Exercise of Options, Shares | 8,473,868 | |||||
Shares Issued for Exercise of Warrants | 1,273,679 | 1,273,679 | 1,273,679 | |||
Shares Issued for Exercise of Warrants, Shares | 8,807,605 | |||||
Shares Issued for Conversion of Debt | 2,371,100 | 2,371,100 | 2,371,100 | |||
Shares Issued for Conversion of Debt, Shares | 16,014,665 | |||||
Stock Grants for Compensation | 1,421,400 | 1,421,400 | 1,421,400 | |||
Stock Grants for Compensation, Shares | 1,455,415 | |||||
Deferred Tax Impact On Conversion Feature | (13,057,730) | (13,057,730) | (13,057,730) | |||
Share-Based Compensation | 1,682,677 | 1,682,677 | 1,682,677 | |||
Ending balance, value at Sep. 25, 2021 | 1,023,317,046 | (772,188,033) | 251,129,013 | (452,169,744) | (201,040,731) | |
Ending balance, shares at Sep. 25, 2021 | 1,196,938,241 | |||||
Beginning balance, value at Jun. 26, 2022 | 1,057,228,873 | (901,758,875) | 155,469,998 | (473,982,734) | (318,512,736) | |
Beginning balance, shares at Jun. 26, 2022 | 1,301,423,950 | |||||
Net Income (Loss) | 4,160,213 | 4,160,213 | (112,312) | 4,047,901 | ||
Controlling Interest Equity Transactions | ||||||
Partner Contributions | 37,561 | 37,561 | 37,561 | |||
Redemption of MedMen Corp Redeemable Shares | 15,318 | (15,318) | ||||
Redemption of MedMen Corp Redeemable Shares, Shares | 259,814 | |||||
Share-Based Compensation | 863,685 | 863,685 | 863,685 | |||
Ending balance, value at Sep. 24, 2022 | $ 1,058,145,437 | $ (897,613,980) | $ 160,531,457 | $ (474,095,046) | $ (313,563,589) | |
Ending balance, shares at Sep. 24, 2022 | 1,301,683,764 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Sep. 24, 2022 | Sep. 25, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net Loss from Continuing Operations | $ (20,258,748) | $ (46,163,540) |
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities: | ||
Deferred Tax Expense | (4,497,141) | |
Depreciation and Amortization | 3,971,473 | 6,256,917 |
Non-Cash Operating Lease Costs | 3,453,863 | 4,442,077 |
Accretion of Debt Discount and Loan Origination Fees | 1,581,970 | 6,347,471 |
Loss on Disposals of Assets | 205,595 | |
Gain on Lease Terminations | (1,587,670) | |
Accretion of Deferred Gain on Sale of Property | (141,657) | (141,657) |
Impairment of Assets | 1,663,911 | 435,241 |
Realized and Unrealized Changes in Fair Value of Contingent Consideration | 863,856 | |
Change in Fair Value of Derivative Liabilities | 805,590 | (2,105,415) |
Gain on Extinguishment of Debt | (10,233,610) | |
Share-Based Compensation | 863,685 | 3,104,077 |
Interest Capitalized to Senior Secured Convertible Debt and Notes Payable | 6,416,426 | 7,837,693 |
Interest Capitalized to Finance Lease Liabilities | 444,232 | 377,885 |
Changes in Operating Assets and Liabilities: | ||
Accounts Receivable and Prepaid Expenses | 2,163,698 | 617,325 |
Inventory | 892,922 | (1,710,735) |
Other Current Assets | 2,587,163 | 282,230 |
Other Assets | 256,706 | |
Accounts Payable and Accrued Liabilities | (1,746,175) | 4,827,997 |
Interest Payments on Finance Leases | (1,804,507) | (1,784,541) |
Cash Payments - Operating Lease Liabilities | (1,026,792) | (3,478,891) |
Income Taxes Payable | 11,145,390 | 21,707,961 |
Other Current Liabilities | (447,046) | (2,413,113) |
Other Non-Current Liabilities | 47,192 | |
NET CASH PROVIDED BY (USED IN) CONTINUED OPERATING ACTIVITIES | 10,351,077 | (16,291,769) |
Net Cash Used in Discontinued Operating Activities | (19,961,041) | (6,684,431) |
NET CASH USED IN OPERATING ACTIVITIES | (9,609,964) | (22,976,200) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of Property and Equipment | (391,730) | |
Additions to Intangible Assets | (24,056) | (461,456) |
Proceeds from the Sale of Assets Held for Sale | 51,500,000 | |
Restricted Cash | 730 | |
NET CASH PROVIDED BY (USED IN) CONTINUED INVESTING ACTIVITIES | 51,475,944 | (852,456) |
Net Cash Used in Discontinued Investing Activities | (2,764,417) | |
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | 51,475,944 | (3,616,873) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Issuance of Subordinate Voting Shares for Cash | 95,000,000 | |
Payment of Stock Issuance Costs Relating to Private Placement | (5,352,505) | |
Exercise of Warrants for Cash | 1,273,679 | |
Payment of Debt Issuance Costs Relating to Senior Secured Convertible Credit Facility | (2,608,964) | |
Proceeds from Issuance of Notes Payable | 5,000,000 | |
Principal Repayments of Notes Payable | (31,599,999) | (75,605) |
Principal Repayments of Finance Lease Liability | (2,484) | (959) |
Distributions - Non-Controlling Interest | 37,561 | |
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES | (31,564,922) | 93,235,646 |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 10,301,058 | 66,642,573 |
Cash Included in Assets Held for Sale | (275,178) | |
Cash and Cash Equivalents, Beginning of Period | 10,795,999 | 11,575,138 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 21,097,057 | 77,942,533 |
SUPPLEMENTAL DISCLOSURE FOR CASH FLOW INFORMATION | ||
Cash Paid for Interest | 1,260,562 | 2,336,120 |
Non-Cash Investing and Financing Activities: | ||
Net Assets Transferred to Held for Sale | 4,476,993 | |
Redemption of MedMen Corp Redeemable Shares | 1,496,142 | |
Derivative Liability Incurred on Convertible Facility and Equity Financing | 30,500,000 | |
Conversion of Convertible Debentures | 2,371,100 | |
Shares Issued to Settle Debt and Lender Fees | 4,030,000 | |
Shares Issued to Settle Accounts Payable and Liabilities | 700,000 | |
Equity Component of Debt - New and Amended | 41,388,047 | |
Deferred Tax Impact on Conversion Feature | $ 13,057,730 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 3 Months Ended |
Sep. 24, 2022 | |
Accounting Policies [Abstract] | |
NATURE OF OPERATIONS | 1. NATURE OF OPERATIONS MedMen Enterprises Inc. and its subsidiaries over which the company has control (collectively, “MedMen”, the “Company”, “we” or “us”) is a premier cannabis retailer based in the U.S. with an operational footprint in California, Nevada, Illinois, Arizona, Massachusetts, and New York. MedMen offers a robust selection of high-quality products, including MedMen-owned brands – MedMen Red and LuxLyte – through its premium retail stores, proprietary delivery service, as well as curbside and in-store pick up. MedMen Buds provides exclusive access to promotions, product drops and content. As of September 24, 2022, the Company owns 23 store locations across California (13), Nevada (3), Illinois (1), Arizona (1), Massachusetts (1), and New York (4). The Company continues to market its assets in New York and thus classifies all assets and liabilities and profit or loss allocable to its operations in the state of New York as discontinued operations. In August 2022, the Company completed the sale of its operations in the state of Florida of which all assets and liabilities and profit or loss allocable to Florida are classified as discontinued operations until the day of sale, or August 22, 2022. As of September 24, 2022, the remaining post-acquisition assets and liabilities and profit or loss allocable to Florida have been reclassified as continuing operations. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Sep. 24, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Preparation The accompanying Condensed Consolidated Financial Statements have been prepared on a going concern basis in accordance with generally accepted accounting principles in the United States of America (“GAAP”), which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business, and in accordance with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for interim financial information. The Condensed Consolidated Financial Statements include the accounts of MedMen Enterprises, its subsidiaries and variable interest entities (“VIEs”) where the Company is considered the primary beneficiary, if any, after elimination of intercompany accounts and transactions. Investments in entities in which the Company has significant influence, but less than a controlling financial interest, are accounted for using the equity method. In the opinion of management, all adjustments considered necessary for a fair presentation of the consolidated financial position of the Company as of and for the interim periods presented have been included. The accompanying Condensed Consolidated Financial Statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from uncertainty related to our ability to continue as a going concern. The accompanying Condensed Consolidated Financial Statements do not include all of the information required for full annual financial statements. Accordingly, certain information, footnotes and disclosures normally included in the annual financial statements have been condensed or omitted in accordance with SEC rules for interim financial information. The financial data presented herein should be read in conjunction with the audited Consolidated Financial Statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended June 25, 2022, as filed with the Securities and Exchange Commission on September 9, 2022 (the “2022 Form 10-K”). Going Concern As of September 24, 2022, the Company had cash and cash equivalents of $ 21.1 million and working capital deficit of $ 134.9 million. The Company has incurred net losses from continuing operations of $ 20.3 million and $ 46.2 million for the three months ended September 24, 2022 and September 25, 2021, respectively. The conditions described above raise substantial doubt with respect to the Company’s ability to meet its obligations for at least one year from the issuance of these Condensed Consolidated Financial Statements, and therefore, to continue as a going concern. The Company plans to continue to fund its operations through the implementation of its cost savings plan, and various strategic actions, including the successful negotiations of lower costs of occupancy with its master lease landlord and other landlords, divesture of non-core assets including but not limited to the current asset group held for sale, New York, as well continuing its on-going revenue strategy of market expansion and retail revenue growth. The Company also needs to obtain an extension or a refinancing of its debt-in-default with the secured senior lender. The annual operating plan for fiscal year 2023 estimates the Company will be able to manage ongoing operations. However, its cash needs are significant and not achievable with the current cash flow from operations. If the above strategic actions, for any reason, are inaccessible, it will have a significantly negative effect on the Company’s financial condition. Additionally, management expects to continue to manage the Company’s operating expenses and reduce its projected cash requirements through reduction of its expenses by delaying new store development, permanently or temporarily closing stores that are deemed to be performing below expectations, and/or implementing other restructuring activities. Furthermore, COVID-19 and the impact the global pandemic on the broader retail environment could also have a significant impact on the Company’s financial position, results of operations, equity and or its access to capital and future financing. COVID-19 In response to the COVID-19 pandemic, governmental authorities have enacted and implemented various recommendations and safety measures in an attempt to limit the spread and magnitude of the pandemic. During the current reporting period, aspects of the Company’s business continue to be affected by impacts of the COVID-19 pandemic, as the Company’s retail stores strive to operate within the local rules and regulations of the states and localities in which the Company operates. While the Company saw continued recovery from the impacts of the COVID 19-pandemic during the first quarter of 2023, the Company continues to closely monitor the potential impact that a resurgence of the COVID-19 virus, including as a result of the emergence of new variants and strains, could have on the Company’s operations. 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 liabilities. 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. Basis of Consolidation Subsidiaries are entities controlled by the Company. Control exists when the Company either has a controlling voting interest or is the primary beneficiary of a variable interest entity. The financial statements of subsidiaries are included in the Consolidated Financial Statements from the date that control commences until the date that control ceases. With the exception of MME Florida, LLC, which the Company disposed on August 22, 2022, the list of the Company’s subsidiaries included in the Company’s 2022 Form 10-K remain complete as of September 24, 2022. Significant Accounting Policies The significant accounting policies and critical estimates applied by the Company in these Condensed Consolidated Financial Statements are the same as those applied in the Company’s audited Consolidated Financial Statements and accompanying notes included in the Company’s 2022 Form 10-K, unless otherwise disclosed in these accompanying notes to the Condensed Consolidated Financial Statements for the interim period ended September 24, 2022. Earnings (Loss) per Share The Company calculates basic loss per share by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is determined by adjusting profit or loss attributable to common shareholders and the weighted-average number of common shares outstanding, for the effects of all dilutive potential common shares, which comprise convertible debentures, restricted stock units, warrants and stock options issued. Reclassifications Certain amounts reported in the Notes to the Condensed Consolidated Financial Statements as of June 25, 2022 have non-material corrections and reclassified in order to conform to the current reporting period presentation. These non-material corrections and reclassifications impacted leasehold improvements and furniture and fixtures in the amount of approximately $ 940,000 1,440,000 964,000 3,662,000 6,825,000 Recently Adopted Accounting Standards In May 2021, the FASB issued Accounting Standards Update (“ASU”) 2021-04, “ Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) Recently Issued Accounting Standards In March 2020, the FASB issued ASU 2020-04, “ Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting In September 2022, the FASB issued ASU 2022-04, “ Liabilities – Supplier Finance Programs (Subtopic 405-50) |
INVENTORY
INVENTORY | 3 Months Ended |
Sep. 24, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORY | 3. INVENTORY Inventory consists of the following: Schedule of inventories September 24, June 25, 2022 2022 Raw Materials $ 612,901 $ 521,777 Work-in-Process 1,142,397 671,541 Finished Goods 7,362,511 8,817,413 Total Inventory $ 9,117,809 $ 10,010,731 During the three months ended September 24, 2022 and September 25, 2021, the Company recognized impairment of nil and $ 864,314 , respectively, to write down inventory to its net realizable value. |
ASSETS HELD FOR SALE
ASSETS HELD FOR SALE | 3 Months Ended |
Sep. 24, 2022 | |
Assets Held For Sale | |
ASSETS HELD FOR SALE | 4. ASSETS HELD FOR SALE A reconciliation of our assets held for sale is as follows: Schedule of asset held for sale Discontinued (1) Other TOTAL Balance as of June 25, 2022 $ 123,128,406 $ 30,345 $ 123,158,751 Ongoing Activities (47,881,618 ) 248,324 (47,633,294 ) Proceeds from Sale (67,000,000 ) - (67,000,000 ) Gain on Sale of Assets Held for Sale 35,659,761 - 35,659,761 Balance as of September 24, 2022 $ 43,906,549 $ 278,669 $ 44,185,218 (1) See “Note 22 – Discontinued Operations” for further information. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended |
Sep. 24, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | 5. PROPERTY AND EQUIPMENT As of September 24, 2022 and June 25, 2022, property and equipment consists of the following: Schedule of property and equipment September 24, June 25, 2022 2022 Land and Buildings $ 29,933,999 $ 29,933,999 Capital Leases 5,318,516 5,315,625 Furniture and Fixtures 8,325,228 8,776,994 Leasehold Improvements 33,625,893 33,069,524 Equipment and Software 16,316,334 16,897,649 Construction in Progress 4,528,762 6,828,923 Total Property and Equipment 98,048,732 100,822,714 Less Accumulated Depreciation (38,082,797 ) (36,714,922 ) Property and Equipment, Net $ 59,965,935 $ 64,107,792 Depreciation expense related to continuing operations of $ 2,258,354 and $ 3,031,080 was recorded for the three months ended September 24, 2022 and September 25, 2021, respectively, of which $ 24,950 and $ 433,300 , respectively, is included in cost of goods sold. The amount of depreciation recognized for the capital leases during the three months ended September 24, 2022 and September 25, 2021 was $ 347,406 and $ 283,406 , respectively, see “Note 9 – Leases” Borrowing costs were not capitalized as there were no active construction projects in progress during the three months ended September 24, 2022. During the three months ended September 25, 2021, borrowing costs totaling $ 375,241 were capitalized using an average capitalization rate of 11.95 %. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 3 Months Ended |
Sep. 24, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | 6. INTANGIBLE ASSETS As of September 24, 2022 and June 25, 2022, intangible assets consist of the following: Schedule of Intangible assets September 24, June 25, 2022 2022 Dispensary Licenses $ 49,253,452 $ 49,253,452 Customer Relationships 16,409,600 16,409,600 Capitalized Software 7,413,470 7,413,470 Intellectual Property 4,016,597 4,016,597 Total Intangible Assets 77,093,119 77,093,119 Dispensary Licenses (17,477,268 ) (16,876,912 ) Customer Relationships (16,589,651 ) (15,870,284 ) Capitalized Software (4,681,748 ) (4,413,974 ) Intellectual Property (4,287,401 ) (4,185,835 ) Less Accumulated Amortization (43,036,068 ) (41,347,005 ) Intangible Assets, Net $ 34,057,051 $ 35,746,114 The Company recorded amortization expense related to continuing operations of $ 1,713,119 and $ 3,225,837 for the three months ended September 24, 2022 and September 25, 2021, respectively. |
ACCOUNTS PAYABLE AND ACCRUED LI
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | 3 Months Ended |
Sep. 24, 2022 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | 7. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES As of September 24, 2022 and June 25, 2022, accounts payable and accrued liabilities consist of the following: Schedule of accounts payable and accrued liabilities September 24, June 25, 2022 2022 Accounts Payable $ 19,078,177 $ 14,627,746 Accrued Liabilities 7,784,119 10,031,194 Accrued Inventory 3,129,868 5,868,831 Accrued Payroll 2,081,284 1,682,517 Local & State Taxes Payable 3,281,687 6,695,532 Total Accounts Payable and Accrued Liabilities $ 35,355,136 $ 38,905,818 |
DERIVATIVE LIABILITIES
DERIVATIVE LIABILITIES | 3 Months Ended |
Sep. 24, 2022 | |
Disclosure Derivative Liabilities Abstract | |
DERIVATIVE LIABILITIES | 8. DERIVATIVE LIABILITIES A reconciliation of the beginning and ending balance of derivative liabilities and change in fair value of derivative liabilities for the three months ended September 24, 2022 is as follows: Schedule of reconciliation of the beginning and ending balance of derivative liabilities and change in fair value of derivative liabilities September 24, 2022 Balance at Beginning of Period $ 6,749,563 Change in Fair Value of Derivative Liabilities 805,590 Balance at End of Period $ 7,555,153 On August 17, 2021, in connection with the amended and restated senior secured convertible credit facility (the Sixth Amendment”), the Company provided the note holders top-up and preemptive rights which were bifurcated from the related notes and classified as a derivative due to the variability of the number and price of shares issuable under these rights. See “ Note 11 – Senior Secured Convertible Credit Facility” The fair value of the top-up provision in connection with Sixth Amendment of the Convertible Facility was determined using the Black Scholes simulation model based on Level 3 inputs on the fair value hierarchy. The following assumptions were used at September 24, 2022: Schedule of assumptions to measure fair value Top-Up Average Stock Price $ 0.04 Weighted-Average Probability 50.00 % Term (in Years) 5.00 Expected Stock Price Volatility 96.68 % The following are the warrants issued related to the equity financing transactions that were accounted for as derivative liabilities: Schedule of warrant issued Number of Exercise Expiration March 2021 Private Placement (1) 50,000,000 C$ 0.50 March 27, 2024 50,000,000 (1) See “Note 12 – Shareholders’ Equity” for further information. The fair value of the March 2021 private placement warrants was measured based on Level 3 inputs on the fair value hierarchy using the Black-Scholes Option pricing model using the following variables: Schedule of assumptions to measure fair value Expected Stock Price Volatility 106.25 % Risk-Free Annual Interest Rate 2.51 % Expected Life (in Years) 0.50 Share Price $ 0.04 Exercise Price $ 0.37 |
LEASES
LEASES | 3 Months Ended |
Sep. 24, 2022 | |
Leases [Abstract] | |
LEASES | 9. LEASES The Company has various operating and finance leases for land, buildings, equipment and other assets that are used for corporate purposes as well as for the production and sale of cannabis products. These leases are subject to covenants and restrictions standard to the industry in which the Company operates. The below are the details of the lease cost and other disclosures regarding the Company’s leases for the three months ended September 24, 2022 and September 25, 2021: Schedule of lease cost Three Months Ended September 24, September 25, 2022 2021 Finance Lease Cost: Amortization of Finance Lease Right-of-Use Assets $ 347,406 $ 283,406 Interest on Lease Liabilities 1,804,507 1,784,541 Operating Lease Cost 3,453,863 6,595,652 Sublease Income (1) (1,521,693 ) - Total Lease Expenses $ 5,605,776 $ 8,663,599 Cash Paid for Amounts Included in the Measurement of Lease Liabilities: Financing Cash Flows from Finance Leases $ 2,484 $ 959 Operating Cash Flows from Operating Leases $ 1,026,792 $ 3,478,891 (1) See “Note 16 – Other Operating Income” for further information. The weighted-average remaining lease term and discount rate related to the Company’s finance and operating lease liabilities as of September 24, 2022 and June 25, 2022, is as follows: September 24, June 25, 2022 2022 Weighted-Average Remaining Lease Term (Years) - Finance Leases 47 46 Weighted-Average Remaining Lease Term (Years) - Operating Leases 7 8 Weighted-Average Discount Rate - Finance Leases 24.78 % 24.33 % Weighted-Average Discount Rate - Operating Leases 15.96 % 18.70 % Future lease payments under non-cancellable operating leases and finance leases as of September 24, 2022 are as follows: Schedule of future leases payments Fiscal Year Ending Operating Finance July 1, 2023 (remaining) $ 9,155,365 $ 4,387,279 June 29, 2024 16,183,010 10,961,495 June 28, 2025 25,224,922 14,020,131 June 27, 2026 12,675,441 7,300,368 June 26, 2027 12,716,234 7,519,379 Thereafter 20,832,425 1,054,354,990 Total Lease Payments 96,787,396 1,098,543,643 Less Interest (37,307,828 ) (1,067,487,335 ) Lease Liability Recognized $ 59,479,568 $ 31,056,308 The Company entered into a management agreement (the “Management Agreement”) with a third party to operate its cultivation facilities in California and Nevada (the “Cultivation Facilities”). On September 30, 2021, the landlord approved the third party to operate the leased facilities which effectuated the Management Agreement. The Management Agreement provides the third party an option to acquire all the assets used in the Cultivation Facilities, including the cannabis licenses and equipment, for $1 (the “Purchase Option”). The fee for the services under the Management Agreement is 100% and 30% of the California and Nevada Cultivation Facilities net revenue, respectively. The term of the Management Agreement remains in effect until the earlier of (a) the closing of any sale pursuant to the Purchase Option and (b) the expiration of the term, as applicable, of the master lease, at which time this Management Agreement shall automatically terminate without any further action of the Parties. As of September 24, 2022, the Management Agreement remains in effect as neither termination condition has occurred. During the three months ended September 24, 2022, the Company recorded sublease income under the Management Agreement. See “ Note 16 – Other Operating Income |
NOTES PAYABLE
NOTES PAYABLE | 3 Months Ended |
Sep. 24, 2022 | |
Disclosure Notes Payable Abstract | |
NOTES PAYABLE | 10. NOTES PAYABLE Refer to the 2022 Form 10-K for complete disclosure of current terms of notes payable included in the footnotes of the annual financial statements as of June 25, 2022. There were no amendments during the three months ended September 24, 2022. As of September 24, 2022 and June 25, 2022, notes payable consist of the following: Schedule of notes payable September 24, June 25, 2022 2022 Financing liability incurred on various dates between January 2019 through September 2019 with implied interest rates ranging from 0.7% to 17.0% per annum. $ 72,300,000 $ 72,300,000 Non-revolving, senior secured term notes dated between October 1, 2018 and October 30, 2020, issued to accredited investors, which mature on August 1, 2022 and July 31, 2022, and bear interest at a rate of 15.5% and 18.0% per annum. 66,819,991 97,162,001 Promissory notes dated November 7, 2018, issued to Lessor for tenant improvements as part of sales and leaseback transactions, which mature on November 7, 2028, bear interest at a rate of 10.0% per annum and require minimum monthly payments of $15,660 and $18,471. 2,057,207 2,057,207 Other 15,691 15,691 Total Notes Payable 141,192,889 171,534,899 Less Unamortized Debt Issuance Costs and Loan Origination Fees - (158,079 ) Net Amount $ 141,192,889 $ 171,376,820 Less Current Portion of Notes Payable (66,294,249 ) (97,003,922 ) Notes Payable, Net of Current Portion $ 74,898,640 $ 74,372,898 A reconciliation of the beginning and ending balances of notes payable for the three months ended September 24, 2022 is as follows: Schedule of Reconciliation of Notes payable September 24, 2022 Balance at Beginning of Period $ 171,376,820 Paid-In-Kind Interest Capitalized 1,257,988 Cash Payments (31,599,999 ) Accretion of Debt Discount Included in Discontinued Operations 158,079 Balance at End of Period 141,192,889 Less Current Portion of Notes Payable (66,294,249 ) Notes Payable, Net of Current Portion $ 74,898,640 Non-Revolving Senior Secured Term Loan Facility In February 2022, the Company executed the Sixth Modification extending the maturity date of the senior secured term loan facility (the “Facility”) with Hankey Capital and Stable Road Capital (the “Lenders”) to July 31, 2022 with respect to the Facility, and August 1, 2022 with respect to the incremental term loans (collectively, the “Term Loans”). The Sixth Modification required that the Company make a mandatory prepayment of at least $ 37,500,000 in the event the sale of certain assets and imposed covenants in regards to strategic actions the Company would have to implement if unable to pay the Term Loans by the extended stated maturity date. During the three months ended September 24, 2022, in connection with the sale of the Company’s Florida-based operations, the Company made a principal repayment of $ 31,599,999 with proceeds from the sale. An additional $8,500,000 principal repayment will be made in 2023 upon receipt of the final installment payment from the sale of the Company’s Florida-based operations. The Facility and Term Loans remain in default as of September 24, 2022 as the principal balance matured on July 31, 2022 and August 1, 2022, respectively. As of September 24, 2022, the Company is in ongoing discussions with the Lenders. |
SENIOR SECURED CONVERTIBLE CRED
SENIOR SECURED CONVERTIBLE CREDIT FACILITY | 3 Months Ended |
Sep. 24, 2022 | |
Debt Disclosure [Abstract] | |
SENIOR SECURED CONVERTIBLE CREDIT FACILITY | 11. SENIOR SECURED CONVERTIBLE CREDIT FACILITY Refer to the 2022 Form 10-K for complete disclosure of current terms of the senior secured convertible facility included in the footnotes of the annual financial statements as of June 25, 2022. There were no amendments during the three months ended September 24, 2022. As of September 24, 2022 and June 25, 2022, senior secured convertible credit facility consists of the following: Schedule of senior secured convertible credit facility September 24, June 25, Tranche 2022 2022 Senior secured convertible notes dated August 17, 2019, issued to accredited investors, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. 1A $ 23,376,684 $ 22,880,556 Senior secured convertible notes dated May 22, 2019, issued to accredited investors, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. 1B 100,679,152 98,542,422 Senior secured convertible notes dated July 12, 2019, issued to accredited investors, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. 2 32,738,817 32,043,996 Senior secured convertible notes dated November 27, 2019, issued to accredited investors, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. 3 12,677,140 12,408,091 Senior secured convertible notes dated March 27, 2020, issued to accredited investors, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. 4 14,911,453 14,594,985 Amendment fee converted to senior secured convertible notes dated October 29, 2019, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. - 23,932,224 23,424,438 Senior secured convertible notes dated April 24, 2020, issued to accredited investors, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. IA-1 3,346,889 3,275,857 Senior secured convertible notes dated September 14, 2020, issued to accredited investors, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. IA-2 6,472,344 6,334,980 Restatement fee issued in senior secured convertible notes dated March 27, 2020, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. - 10,103,343 9,888,919 Second restatement fee issued in senior secured convertible notes dated July 2, 2020, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. - 2,237,875 2,190,380 Third restatement fee issued in senior secured convertible notes dated January 11, 2021, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. - 12,587,295 12,320,154 Total Drawn on Senior Secured Convertible Credit Facility 243,063,216 237,904,778 Less Unamortized Debt Discount (104,317,146 ) (105,899,115 ) Senior Secured Convertible Credit Facility, Net $ 138,746,070 $ 132,005,663 A reconciliation of the beginning and ending balances of senior secured convertible credit facility for the three months ended September 24, 2022 is as follows: Schedule of reconciliation senior secured convertible credit facility 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 25, 2022 $ 80,178,586 $ 21,218,356 $ 8,217,079 $ 1,051,827 $ 224,585 $ 433,598 $ 842,981 $ 15,512,409 $ 2,211,711 $ 2,114,531 $ 132,005,663 Paid-In-Kind Interest Capitalized 2,632,858 694,821 269,049 316,468 71,032 137,364 267,141 507,786 214,424 47,495 5,158,438 Accretion of Debt Discount 988,849 260,580 100,902 - - - - 190,486 37,165 3,987 1,581,969 Balance as of September 24, 2022 $ 83,800,293 $ 22,173,757 $ 8,587,030 $ 1,368,295 $ 295,617 $ 570,962 $ 1,110,122 $ 16,210,681 $ 2,463,300 $ 2,166,013 $ 138,746,070 |
SHAREHOLDERS_ EQUITY
SHAREHOLDERS’ EQUITY | 3 Months Ended |
Sep. 24, 2022 | |
Equity [Abstract] | |
SHAREHOLDERS’ EQUITY | 12. SHAREHOLDERS’ EQUITY Issued and Outstanding A reconciliation of the beginning and ending issued and outstanding shares is as follows: Schedule of Shares issued and outstanding Subordinate MM CAN USA MM Enterprises USA Balance as of June 25, 2022 1,301,423,950 65,066,106 725,016 Redemption of MedMen Corp Redeemable Shares 259,814 (259,814 ) - Balance as of September 24, 2022 1,301,683,764 64,806,292 725,016 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 September 24, 2022 and June 25, 2022, the holders of the MM CAN USA Redeemable Shares represent approximately 4.74 % and 4.76 %, respectively, of the Company and holders of the MM Enterprises USA Common Units represent approximately 0.05 % of the Company. Variable Interest Entities The below information are entities the Company has concluded to be variable interest entities (“VIEs”) as the Company possesses the power to direct activities through management services agreements (“MSAs”). Through these MSAs, the Company can significantly impact the VIEs and thus holds a controlling financial interest. The following table represents the summarized financial information about the Company’s consolidated VIEs. VIEs include the balances of Venice Caregiver Foundation, Inc., LAX Fund II Group, LLC, and Natures Cure, Inc. This information represents amounts before intercompany eliminations. As of and for the three months ended September 24, 2022, the balances and activities attributable to the VIEs consist of the following: Schedule of VIE Venice Caregivers Foundation, Inc. LAX Fund II Group, LLC Natures Cure, Inc. TOTAL Current Assets $ 1,180,136 $ - $ 24,602,018 $ 25,782,154 Non-Current Assets 8,763,511 3,233,062 4,891,725 16,888,298 Total Assets $ 9,943,647 $ 3,233,062 $ 29,493,743 $ 42,670,452 Current Liabilities $ 10,477,448 $ 16,016,119 $ 8,510,967 $ 35,004,534 Non-Current Liabilities 7,004,484 2,004,062 1,342,632 10,351,178 Total Liabilities $ 17,481,932 $ 18,020,181 $ 9,853,599 $ 45,355,712 Non-Controlling Interest $ (7,538,285 ) $ (14,787,119 ) $ 19,640,163 $ (2,685,241 ) Revenues $ 1,959,080 $ - $ 3,317,299 $ 5,276,379 Net (Loss) Income Attributable to Non-Controlling Interest $ (494,845 ) $ (810,965 ) $ 885,605 $ (420,205 ) As of and for the fiscal year ended June 25, 2022, the balances of the VIEs consists of the following: Venice Caregivers Foundation, Inc. LAX Fund II Group, LLC Natures Cure, Inc. TOTAL Current Assets $ 1,735,304 $ 1,067,636 $ 23,557,168 $ 26,360,108 Non-Current Assets 10,073,880 3,379,412 4,973,459 18,426,751 Total Assets $ 11,809,184 $ 4,447,048 $ 28,530,627 $ 44,786,859 Current Liabilities $ 9,238,460 $ 16,238,249 $ 8,433,436 $ 33,910,145 Non-Current Liabilities 9,614,164 2,184,953 1,342,633 13,141,750 Total Liabilities $ 18,852,624 $ 18,423,202 $ 9,776,069 $ 47,051,895 Non-Controlling Interest $ (7,043,440 ) $ (13,976,154 ) $ 18,754,558 $ (2,265,036 ) Revenues $ 8,732,449 $ 1,857 $ 16,157,388 $ 24,891,694 Net (Loss) Income Attributable to Non-Controlling Interest $ (1,384,751 ) $ (4,868,632 ) $ 7,190,809 $ 937,426 The net change in the consolidated VIEs and other non-controlling interest are as follows for the three months ended September 24, 2022: Schedule of other non-controlling interest Venice Caregivers Foundation, Inc. LAX Fund II Group, LLC Natures Cure, Inc. Other Non- Controlling Interests TOTAL Balance as of June 25, 2022 $ (7,043,440 ) $ (13,976,154 ) $ 18,754,558 $ (471,717,698 ) $ (473,982,734 ) Net (Loss) Income (494,845 ) (810,965 ) 885,605 307,893 (112,312 ) Balance as of September 24, 2022 $ (7,538,285 ) $ (14,787,119 ) $ 19,640,163 $ (471,409,805 ) $ (474,095,046 ) Le Cirque Rouge, LP (the “OP”) is a Delaware limited partnership that holds substantially all of the real estate assets owned by the Treehouse Real Estate Investment Trust (the “REIT”), conducts the REIT’s operations and is financed by the REIT. Under Accounting Standards Codification (“ASC”) Topic 810, “ Consolidation Note 9 – Leases |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 3 Months Ended |
Sep. 24, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | 13. SHARE-BASED COMPENSATION The Company has a stock and equity incentive plan (the “Incentive Plan”) under which the Company may issue various types of equity instruments to any employee, officer, consultant, advisor or director. The types of equity instruments issuable under the Incentive Plan encompass, among other things, stock options, stock grants, and restricted stock units (together, “Awards”). Stock based compensation expenses are recorded as a component of general and administrative expenses. The maximum number of Awards that may be issued under the Incentive Plan shall be determined by the Compensation Committee or the Board of Directors in the absence of a Compensation Committee. Any shares subject to an Award under the Incentive Plan that are forfeited, cancelled, expire unexercised, are settled in cash or are used or withheld to satisfy tax withholding obligations, shall again be available for Awards under the Incentive Plan. Vesting of Awards will be determined by the Compensation Committee or Board of Directors in absence of a Compensation Committee. The exercise price for Awards (if applicable) will generally not be less than the fair market value of the Award at the time of grant and will generally expire after 5 or 10 years. A summary of share-based compensation expense for the three months ended September 24, 2022 and September 25, 2021 is as follows: Schedule of share-based compensation expense Three Months Ended September 24, September 25, 2022 2021 Stock Options $ 863,685 $ 1,216,447 Stock Grants for Compensation - 333,333 Restricted Stock Grants - 1,554,297 Total Share-Based Compensation $ 863,685 $ 3,104,077 Stock Options A reconciliation of the beginning and ending balance of stock options outstanding is as follows: Schedule of stock options Number of Weighted-Average Balance as of June 25, 2022 8,649,673 $ 1.35 Forfeited and Expired (205,354 ) $ (3.39 ) Balance as of September 24, 2022 8,444,319 $ 1.39 Stock Options Exercisable as of September 24, 2022 8,037,095 $ 1.27 Long-Term Incentive Plan (“LTIP”) Units and LLC Redeemable Units A reconciliation of the beginning and ending balances of the LTIP Units and LLC Redeemable Units issued for compensation outstanding is as follows: Schedule of LTIP Units and LLC Redeemable Units Weighted LTIP Units LLC Average Issued and Redeemable Grant Date Outstanding Units Fair Value Balance as of June 25, 2022 and September 24, 2022 19,323,878 725,016 $ 0.52 Restricted Stock Units A reconciliation of the beginning and ending balance of restricted stock units outstanding is as follows: Schedule of Restricted Stock Grants Issued and Vested (1) Weighted-Average Balance as of June 25, 2022 10,998,483 4,030,460 $ 0.20 Forfeiture of Restricted Stock (2) (1,405,788 ) - $ (0.22 ) Vesting of Restricted Stock - 1,117,081 $ 0.22 Balance as of September 24, 2022 9,592,695 5,147,541 $ 0.20 (1) Restricted stock units were issued on September 24, 2021 and vests 37.5% on the first anniversary, 12.5% on the second anniversary, 37.5% on the third anniversary, and 12.5% on the fourth anniversary of the grant date. (2) Restricted stock units were forfeited upon resignation of certain employees prior to their vesting during the three months ended September 24, 2022. Warrants A reconciliation of the beginning and ending balance of warrants outstanding is as follows: Schedule of Warrants Number of Warrants Outstanding Subordinate MM CAN USA TOTAL Weighted-Average Balance as of June 25, 2022 352,704,355 97,430,456 450,134,811 $ 0.25 Expired (2,677,535 ) - (2,677,535 ) $ (3.27 ) Balance as of September 24, 2022 350,026,820 97,430,456 447,457,276 $ 0.23 |
LOSS PER SHARE
LOSS PER SHARE | 3 Months Ended |
Sep. 24, 2022 | |
Earnings Per Share [Abstract] | |
LOSS PER SHARE | 14. LOSS PER SHARE The following is a reconciliation for the calculation of basic and diluted loss per share for the three months ended September 24, 2022 and September 25, 2021: Schedule of basic and diluted loss per share Three Months Ended September 24, September 25, 2022 2021 Net Loss from Continuing Operations Attributable to Shareholders of MedMen Enterprises, Inc. $ (20,146,436 ) $ (40,883,537 ) Net Income (Loss) from Discontinued Operations 24,306,649 (14,446,491 ) Total Net Income (Loss) $ 4,160,213 $ (55,330,028 ) Weighted-Average Shares Outstanding - Basic and Diluted 1,301,659,701 942,696,052 Earnings (Loss) Per Share - Basic and Diluted: From Continuing Operations Attributable to Shareholders of MedMen Enterprises Inc. $ (0.02 ) $ (0.04 ) From Discontinued Operations Attributable to Shareholders of MedMen Enterprises Inc. $ 0.02 $ (0.02 ) 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 | 3 Months Ended |
Sep. 24, 2022 | |
General And Administrative Expenses | |
GENERAL AND ADMINISTRATIVE EXPENSES | 15. GENERAL AND ADMINISTRATIVE EXPENSES During the three months ended September 24, 2022 and September 25, 2021, general and administrative expenses consisted of the following: Schedule of general and administrative expenses Three Months Ended September 24, September 25, 2022 2021 Salaries and Benefits $ 6,858,048 $ 9,911,488 Professional Fees 1,350,848 7,430,659 Rent 3,627,925 4,754,883 Licenses, Fees and Taxes 1,001,669 2,537,788 Share-Based Compensation 863,685 1,642,853 Deal Costs 429,272 1,637,587 Other General and Administrative 3,714,670 4,733,976 Total General and Administrative Expenses $ 17,846,117 $ 32,649,234 |
OTHER OPERATING (INCOME) EXPENS
OTHER OPERATING (INCOME) EXPENSE | 3 Months Ended |
Sep. 24, 2022 | |
Other Operating Income Expense | |
OTHER OPERATING (INCOME) EXPENSE | 16. OTHER OPERATING (INCOME) EXPENSE During the three months ended September 24, 2022 and September 25, 2021, other operating (income) expense consisted of the following: Schedule of other operating expenses Three Months Ended September 24, September 25, 2022 2021 Loss on Disposals of Assets $ 205,595 $ 15,146 Restructuring and Reorganization Expense 423,793 2,378,675 Gain on Settlement of Accounts Payable (74,637 ) (177,990 ) Gain on Lease Terminations (1,587,650 ) - Other Income (1,522,219 ) (16,803 ) Total Other Operating (Income) Expense $ (2,555,118 ) $ 2,199,028 During the three months ended September 24, 2022, the Company recorded $ 1,521,650 of sublease income related to the cultivation facilities in California and Nevada as a component of Other Operating Income in the Consolidated Statements of Operations. |
PROVISION FOR INCOME TAXES AND
PROVISION FOR INCOME TAXES AND DEFERRED INCOME TAXES | 3 Months Ended |
Sep. 24, 2022 | |
Income Tax Disclosure [Abstract] | |
PROVISION FOR INCOME TAXES AND DEFERRED INCOME TAXES | 17. PROVISION FOR INCOME TAXES AND DEFERRED INCOME TAXES The following table summarizes the Company’s income tax expense and effective tax rates for the three months ended September 24, 2022 and September 25, 2021: Schedule of income tax expense and effective tax rates Three Months Ended September 24, September 25, 2022 2021 Loss from Continuing Operations Before Provision for Income Taxes $ (18,065,206 ) $ (26,471,632 ) Income Tax Expense (2,193,542 ) (19,691,908 ) Effective Tax Rate -12 % -74 % We have historically calculated the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate (“AETR”) for the full fiscal year to “ordinary” income or loss (pre-tax income or loss excluding unusual or infrequently occurring discrete items) for the reporting period. For the three months ended September 25, 2021, we determined we could no longer reliably estimate income taxes utilizing an AETR. The AETR estimate is highly sensitive to estimates of ordinary income (loss) and permanent differences such that minor fluctuations in these estimates could result in significant fluctuations of the Company’s AETR. Accordingly, we used our actual year-to-date effective tax rate to calculate income taxes for the three months ended September 25, 2022. As the Company operates in the legal cannabis industry, the Company is subject to the limits of IRC Section 280E for U.S. federal, Illinois state, Massachusetts state and New York state income tax purposes under which the Company is only allowed to deduct expenses directly related to sales of product. This results in permanent differences between ordinary and necessary business expenses deemed non-allowable under IRC Section 280E. However, the State of California does not conform to IRC Section 280E and, accordingly, the Company deducts all operating expenses on its California Franchise Tax Returns. The Company has approximately gross $12,230,000 (tax effected $3,240,000) of Canadian non-capital losses and $6,000,000 (tax effected $1,620,000) of share issuance cost 20(1)(e) balance. The loss tax attribute has been determined to be more likely than not that the tax attribute would not yield any tax benefit. As such, the Company has recorded a full valuation allowance against the benefit. Since IRC Section 280E was not applied in the California Franchise Tax Returns, the Company has approximately $22,000,000 of gross California net operating losses which begin expiring in 2033 as of June 25, 2022. The Company has evaluated the realization of its California net operating loss tax attribute and has determined under the more likely than not standard that $217,300,000 will not be realized. The effective tax rate for the three months ended September 24, 2022 is different from the three months ended September 25, 2021, respectively, primarily due to the Company’s income and related 280E expenditures. The Company’s non-deductible expenses related to IRC Section 280E limitations have remained relatively consistent. The Company files income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions, and in Canada. The Company is generally subject to audit by taxing authorities in various U.S., state, and in foreign jurisdictions for fiscal years 2014 through the current fiscal year. As of September 24, 2022, the Company had $ 18,781,424 of unrecognized tax benefits, all of which would reduce income tax expense and the effective tax rate if recognized. During the three months ended September 24, 2022, the Company recognized a net discrete tax expense of $ 407,993 primarily related on interest of past liabilities. During the next twelve months, the Company does not estimate any material reduction in its unrecognized tax benefits. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Sep. 24, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 18. COMMITMENTS AND CONTINGENCIES Contingencies The Company’s operations are subject to a variety of local and state regulations. Failure to comply with one or more of these regulations could result in fines, restrictions on its operations, or losses of permits that could result in the Company ceasing operations. While management of the Company believes that the Company is in compliance with applicable local and state regulations as of September 24, 2022 and June 25, 2022, marijuana regulations continue to evolve and are subject to differing interpretations. As a result, the Company may be subject to regulatory fines, penalties or restrictions in the future. Claims and Litigation From time to time, the Company may be involved in litigation relating to claims arising out of operations in the normal course of business. As of September 24, 2022, 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 such, no accrual has been made in the Condensed Consolidated Financial Statements relating to claims and litigations. As of September 24, 2022, 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 March 2020, litigation was filed against the Company in the Superior Court of Arizona, Maricopa County, related to a purchase agreement for a previous acquisition. The Superior Court of Arizona, Maricopa County granted summary judgement in favor of the Company on all counts in July 2022. The Company is currently in process of recovering certain fees and costs associated with the lawsuit from the plaintiffs. The Company believes the likelihood of a loss contingency is neither probable nor estimable. As such, no amount has been accrued in these financial statements. In April 2020, a complaint was filed against the Company in Los Angeles Superior Court related to a contemplated acquisition in which the plaintiffs are seeking damages for alleged breach of contract and breach of implied covenant of good faith and fair dealing seeking declaratory relief and specific performance. The Company has filed counterclaims including for breach of contract, breach of promissory note, unjust enrichment and declaratory relief. The Company believes the likelihood of a loss contingency is remote. As such, no amount has been accrued in the 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. In response, the Company filed a counterclaim and is seeking entitlement to proceeds of the sale, net of amounts owed under the secured promissory note. The plaintiffs filed an appeal to the ruling on the entitlement of proceeds in excess of the secured promissory note which was dismissed. The additionally claims and counterclaims are currently in dispute. Any loss recoveries related to the Company’s counterclaim have not been recorded. In addition, net proceeds resulting from the sale was not recognized as a receivable as the amount is not reasonably estimable. In September 2020 and May 2020, legal disputes were filed against the Company related to the separation of former officers 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 November 2020, entities affiliated with former officers of the Company initiated arbitration against a subsidiary of the Company in Los Angeles, California asserting breach of contract, breach of the implied covenant of good faith and fair dealing, fraud, and unjust enrichment. The claimants are generally seeking damages and compensatory damages according to proof, including lost earnings and other benefits, past and future, interest on lost earnings and benefits, reasonable attorney’s fees, and such other and further relief as the court deems proper. The Company asserted counterclaims, including for breach of the same management agreements. The arbitration is currently set for hearing in December 2022. The litigation is at an early stage and 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 October 2021, a suit for premises liability and negligence seeking unspecified damages for pain and suffering, disability, mental and emotional distress, and loss of earnings was filed against the Company in Los Angeles Superior Court. The matter is in the process of being litigated. The Company believes the likelihood of loss is remote. As a result, no amount has been set up for potential damages in these financial statements. The Company is the defendant in several complaints filed by various of its landlords seeking rents and damages under leases. In 2020 a complaint was filed in Cook County Circuit Court, Illinois against the Company by a landlord claiming the Company had failed to meet its obligations to apply effort to obtain a retail cannabis license at a property and seeking rents and damages. The litigation is currently in the discovery phase. If the litigation is not settled or resolved, trial will likely take place During the fiscal year ended 2023. In July 2022, a complaint was filed against the Company in the United States District Court for the Southern District of New York by a landlord seeking damages under a lease on real estate located in Illinois. The Company is required to file an answer to the complaint by September 2022. Prior attempts to resolve the lease dispute with this landlord have failed. In June 2022, a complaint was filed against the Company by the Company’s landlord at its cultivation center in Utica, New York, related to an agreement to purchase land next to the cultivation center, which land was also owned by the landlord. Plaintiff seeks to enforce a land purchase agreement and seeks damages. In April 2022, the landlord at the Company’s dispensary location in Tampa, Florida, filed suit seeking damages under a lease, shortly after the Company announced its plans to sell its Florida business. The Company retained this lease and litigation following the sale of the Florida business and the litigation is at an early stage and the likelihood of a loss contingency is remote. As a result, no amount has been set up for potential damages in these financial statements. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Sep. 24, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 19. RELATED PARTY TRANSACTIONS The Company’s Board of Directors each receive quarterly fees of $ 200,000 of which one-third is paid in cash and two-thirds is paid in Class B Subordinate Voting Shares. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Sep. 24, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | 20. SEGMENT INFORMATION The Company currently operates in one segment, the production and sale of cannabis products, which is how the Company’s Chief Operating Decision Maker manages the business and makes operating decisions. The Company’s cultivation operations are not considered significant to the overall operations of the Company. Intercompany sales and transactions are eliminated in consolidation. |
REVENUE
REVENUE | 3 Months Ended |
Sep. 24, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | 21. REVENUE While the Company operates in one segment as disclosed in “ Note 20 – Segment Information Revenue from Contracts with Customers Schedule of Disaggregation of revenue Three Months Ended September 24, September 25, 2022 2021 California $ 19,928,985 $ 24,626,555 Nevada 2,997,469 4,079,151 Illinois 3,542,071 4,328,602 Arizona 2,794,648 3,701,596 Massachusetts 780,875 - Revenue from Continuing Operations $ 30,044,048 $ 36,735,904 Revenue from Discontinued Operations 3,629,641 7,340,099 Total Revenue $ 33,673,689 $ 44,076,003 |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 3 Months Ended |
Sep. 24, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | 22. DISCONTINUED OPERATIONS On February 28, 2022, MME Florida LLC and its parent, MM Enterprises USA, LLC, a wholly-owned subsidiary of the Company entered into an Asset Purchase Agreement (the “Agreement”) with Green Sentry Holdings, LLC, (“Buyer”) for the sale of substantially all of the Company’s Florida-based assets, including its license, dispensaries, inventory and cultivation operations, and assumption of certain liabilities. On August 22, 2022, the Company closed the transaction at the final sales price of $ 67,000,000 , which comprised of $ 63,000,000 in cash and $ 4,000,000 in liabilities to be assumed by the Buyer. The Buyer made a cash payment of $40,000,000 at closing, a cash payment of $11,500,000 on September 15, 2022 and is required to make one additional installment payment of $11,500,000 on or before March 15, 2023. During the three months ended September 24, 2022, $ 31,599,999 of the cash proceeds was used to repay the Senior Secured Term Loan Facility and the Company received net cash proceeds of $ 19,558,947 . As of September 24, 2022, the final cash payment of $ 11,500,000 remains due and payable. Accordingly, the Company recognized a gain on sale of assets of $ 31,719,833 included in Net Income from Discontinued Operations for the three months ended September 24, 2022. All profit or loss relating to the Florida operations were eliminated from the Company’s continuing operations and are shown as a single line item in the Consolidated Statements of Operations. The operating results of the discontinued operations are summarized as follows: Schedule of net operating loss of discontinued operation Three Months Ended September 24, September 25, 2022 2021 Revenue $ 3,629,641 $ 7,340,099 Cost of Goods Sold 2,103,298 5,227,553 Gross Profit 1,526,343 2,112,546 Expenses: General and Administrative 4,983,995 5,617,595 Sales and Marketing 43,311 103,803 Depreciation and Amortization 872,895 1,221,759 Impairment Expense (78,433 ) - Gain on Disposal of Assets and Other Income (35,659,761 ) (597,591 ) Total (Income) Expenses (29,837,993 ) 6,345,566 Income (Loss) from Discontinued Operations 31,364,336 (4,233,020 ) Other Expense: Interest Expense 3,761,758 4,616,829 Accretion of Debt Discount and Loan Origination Fees 158,079 3,540,908 Total Other Expense 3,919,837 8,157,737 Income (Loss) from Discontinued Operations Before Provision for Income Taxes 27,444,499 (12,390,757 ) Provision for Income Tax Benefit (Expense) (3,137,850 ) (2,055,734 ) Net Income (Loss) from Discontinued Operations $ 24,306,649 $ (14,446,491 ) The carrying amounts of assets and liabilities in the disposal group are summarized as follows: Schedule of assets included in discontinued operation September 24, June 25, 2022 2022 Carrying Amounts of the Assets Included in Discontinued Operations: Cash and Cash Equivalents $ 355,378 $ 1,124,076 Restricted Cash 5,280 5,280 Accounts Receivable and Prepaid Expenses 95,048 334,621 Inventory 2,915,345 6,866,833 TOTAL CURRENT ASSETS (1) Property and Equipment, Net 9,713,565 41,273,597 Operating Lease Right-of-Use Assets 19,780,991 31,543,058 Intangible Assets, Net 10,582,559 40,799,146 Other Assets 458,383 1,181,795 TOTAL ASSETS OF THE DISPOSAL GROUP CLASSIFIED AS HELD FOR SALE $ 43,906,549 $ 123,128,406 Carrying Amounts of the Liabilities Included in Discontinued Operations: Accounts Payable and Accrued Liabilities $ 2,640,664 $ 6,295,745 Income Taxes Payable (27,904 ) 1,671,380 Other Current Liabilities - 89,069 Current Portion of Operating Lease Liabilities 2,605,317 4,209,512 Current Portion of Finance Lease Liabilities - 174,000 TOTAL CURRENT LIABILITIES (1) Operating Lease Liabilities, Net of Current Portion 19,067,840 56,410,071 Deferred Tax Liabilities 6,250,511 6,097,597 Notes Payable - 11,100,000 TOTAL NON-CURRENT LIABILITIES (1) TOTAL LIABILITIES OF THE DISPOSAL GROUP CLASSIFIED AS HELD FOR SALE $ 30,536,428 $ 86,047,374 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Sep. 24, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 23. SUBSEQUENT EVENTS The Company has evaluated subsequent events through the date these Condensed Consolidated Financial Statements were issued and has concluded that no subsequent events have occurred that would require recognition in the Condensed Consolidated Financial Statements or disclosure in the Notes to the Condensed Consolidated Financial Statements. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Sep. 24, 2022 | |
Accounting Policies [Abstract] | |
Basis of Preparation | Basis of Preparation The accompanying Condensed Consolidated Financial Statements have been prepared on a going concern basis in accordance with generally accepted accounting principles in the United States of America (“GAAP”), which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business, and in accordance with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for interim financial information. The Condensed Consolidated Financial Statements include the accounts of MedMen Enterprises, its subsidiaries and variable interest entities (“VIEs”) where the Company is considered the primary beneficiary, if any, after elimination of intercompany accounts and transactions. Investments in entities in which the Company has significant influence, but less than a controlling financial interest, are accounted for using the equity method. In the opinion of management, all adjustments considered necessary for a fair presentation of the consolidated financial position of the Company as of and for the interim periods presented have been included. The accompanying Condensed Consolidated Financial Statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from uncertainty related to our ability to continue as a going concern. The accompanying Condensed Consolidated Financial Statements do not include all of the information required for full annual financial statements. Accordingly, certain information, footnotes and disclosures normally included in the annual financial statements have been condensed or omitted in accordance with SEC rules for interim financial information. The financial data presented herein should be read in conjunction with the audited Consolidated Financial Statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended June 25, 2022, as filed with the Securities and Exchange Commission on September 9, 2022 (the “2022 Form 10-K”). |
Going Concern | Going Concern As of September 24, 2022, the Company had cash and cash equivalents of $ 21.1 million and working capital deficit of $ 134.9 million. The Company has incurred net losses from continuing operations of $ 20.3 million and $ 46.2 million for the three months ended September 24, 2022 and September 25, 2021, respectively. The conditions described above raise substantial doubt with respect to the Company’s ability to meet its obligations for at least one year from the issuance of these Condensed Consolidated Financial Statements, and therefore, to continue as a going concern. The Company plans to continue to fund its operations through the implementation of its cost savings plan, and various strategic actions, including the successful negotiations of lower costs of occupancy with its master lease landlord and other landlords, divesture of non-core assets including but not limited to the current asset group held for sale, New York, as well continuing its on-going revenue strategy of market expansion and retail revenue growth. The Company also needs to obtain an extension or a refinancing of its debt-in-default with the secured senior lender. The annual operating plan for fiscal year 2023 estimates the Company will be able to manage ongoing operations. However, its cash needs are significant and not achievable with the current cash flow from operations. If the above strategic actions, for any reason, are inaccessible, it will have a significantly negative effect on the Company’s financial condition. Additionally, management expects to continue to manage the Company’s operating expenses and reduce its projected cash requirements through reduction of its expenses by delaying new store development, permanently or temporarily closing stores that are deemed to be performing below expectations, and/or implementing other restructuring activities. Furthermore, COVID-19 and the impact the global pandemic on the broader retail environment could also have a significant impact on the Company’s financial position, results of operations, equity and or its access to capital and future financing. |
COVID-19 | COVID-19 In response to the COVID-19 pandemic, governmental authorities have enacted and implemented various recommendations and safety measures in an attempt to limit the spread and magnitude of the pandemic. During the current reporting period, aspects of the Company’s business continue to be affected by impacts of the COVID-19 pandemic, as the Company’s retail stores strive to operate within the local rules and regulations of the states and localities in which the Company operates. While the Company saw continued recovery from the impacts of the COVID 19-pandemic during the first quarter of 2023, the Company continues to closely monitor the potential impact that a resurgence of the COVID-19 virus, including as a result of the emergence of new variants and strains, could have on the Company’s operations. 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 liabilities. 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. |
Basis of Consolidation | Basis of Consolidation Subsidiaries are entities controlled by the Company. Control exists when the Company either has a controlling voting interest or is the primary beneficiary of a variable interest entity. The financial statements of subsidiaries are included in the Consolidated Financial Statements from the date that control commences until the date that control ceases. With the exception of MME Florida, LLC, which the Company disposed on August 22, 2022, the list of the Company’s subsidiaries included in the Company’s 2022 Form 10-K remain complete as of September 24, 2022. |
Significant Accounting Policies | Significant Accounting Policies The significant accounting policies and critical estimates applied by the Company in these Condensed Consolidated Financial Statements are the same as those applied in the Company’s audited Consolidated Financial Statements and accompanying notes included in the Company’s 2022 Form 10-K, unless otherwise disclosed in these accompanying notes to the Condensed Consolidated Financial Statements for the interim period ended September 24, 2022. |
Earnings (Loss) per Share | Earnings (Loss) per Share The Company calculates basic loss per share by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is determined by adjusting profit or loss attributable to common shareholders and the weighted-average number of common shares outstanding, for the effects of all dilutive potential common shares, which comprise convertible debentures, restricted stock units, warrants and stock options issued. |
Reclassifications | Reclassifications Certain amounts reported in the Notes to the Condensed Consolidated Financial Statements as of June 25, 2022 have non-material corrections and reclassified in order to conform to the current reporting period presentation. These non-material corrections and reclassifications impacted leasehold improvements and furniture and fixtures in the amount of approximately $ 940,000 1,440,000 964,000 3,662,000 6,825,000 |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In May 2021, the FASB issued Accounting Standards Update (“ASU”) 2021-04, “ Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In March 2020, the FASB issued ASU 2020-04, “ Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting In September 2022, the FASB issued ASU 2022-04, “ Liabilities – Supplier Finance Programs (Subtopic 405-50) |
INVENTORY (Tables)
INVENTORY (Tables) | 3 Months Ended |
Sep. 24, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | Schedule of inventories September 24, June 25, 2022 2022 Raw Materials $ 612,901 $ 521,777 Work-in-Process 1,142,397 671,541 Finished Goods 7,362,511 8,817,413 Total Inventory $ 9,117,809 $ 10,010,731 |
ASSETS HELD FOR SALE (Tables)
ASSETS HELD FOR SALE (Tables) | 3 Months Ended |
Sep. 24, 2022 | |
Assets Held For Sale | |
Schedule of asset held for sale | Schedule of asset held for sale Discontinued (1) Other TOTAL Balance as of June 25, 2022 $ 123,128,406 $ 30,345 $ 123,158,751 Ongoing Activities (47,881,618 ) 248,324 (47,633,294 ) Proceeds from Sale (67,000,000 ) - (67,000,000 ) Gain on Sale of Assets Held for Sale 35,659,761 - 35,659,761 Balance as of September 24, 2022 $ 43,906,549 $ 278,669 $ 44,185,218 (1) See “Note 22 – Discontinued Operations” for further information. |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended |
Sep. 24, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Schedule of property and equipment September 24, June 25, 2022 2022 Land and Buildings $ 29,933,999 $ 29,933,999 Capital Leases 5,318,516 5,315,625 Furniture and Fixtures 8,325,228 8,776,994 Leasehold Improvements 33,625,893 33,069,524 Equipment and Software 16,316,334 16,897,649 Construction in Progress 4,528,762 6,828,923 Total Property and Equipment 98,048,732 100,822,714 Less Accumulated Depreciation (38,082,797 ) (36,714,922 ) Property and Equipment, Net $ 59,965,935 $ 64,107,792 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Sep. 24, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible assets | Schedule of Intangible assets September 24, June 25, 2022 2022 Dispensary Licenses $ 49,253,452 $ 49,253,452 Customer Relationships 16,409,600 16,409,600 Capitalized Software 7,413,470 7,413,470 Intellectual Property 4,016,597 4,016,597 Total Intangible Assets 77,093,119 77,093,119 Dispensary Licenses (17,477,268 ) (16,876,912 ) Customer Relationships (16,589,651 ) (15,870,284 ) Capitalized Software (4,681,748 ) (4,413,974 ) Intellectual Property (4,287,401 ) (4,185,835 ) Less Accumulated Amortization (43,036,068 ) (41,347,005 ) Intangible Assets, Net $ 34,057,051 $ 35,746,114 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Tables) | 3 Months Ended |
Sep. 24, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of accounts payable and accrued liabilities | Schedule of accounts payable and accrued liabilities September 24, June 25, 2022 2022 Accounts Payable $ 19,078,177 $ 14,627,746 Accrued Liabilities 7,784,119 10,031,194 Accrued Inventory 3,129,868 5,868,831 Accrued Payroll 2,081,284 1,682,517 Local & State Taxes Payable 3,281,687 6,695,532 Total Accounts Payable and Accrued Liabilities $ 35,355,136 $ 38,905,818 |
DERIVATIVE LIABILITIES (Tables)
DERIVATIVE LIABILITIES (Tables) | 3 Months Ended |
Sep. 24, 2022 | |
Disclosure Derivative Liabilities Abstract | |
Schedule of reconciliation of the beginning and ending balance of derivative liabilities and change in fair value of derivative liabilities | Schedule of reconciliation of the beginning and ending balance of derivative liabilities and change in fair value of derivative liabilities September 24, 2022 Balance at Beginning of Period $ 6,749,563 Change in Fair Value of Derivative Liabilities 805,590 Balance at End of Period $ 7,555,153 |
Schedule of assumptions to measure fair value | Schedule of assumptions to measure fair value Top-Up Average Stock Price $ 0.04 Weighted-Average Probability 50.00 % Term (in Years) 5.00 Expected Stock Price Volatility 96.68 % |
Schedule of warrant issued | Schedule of warrant issued Number of Exercise Expiration March 2021 Private Placement (1) 50,000,000 C$ 0.50 March 27, 2024 50,000,000 (1) See “Note 12 – Shareholders’ Equity” for further information. |
Schedule of assumptions to measure fair value | Schedule of assumptions to measure fair value Expected Stock Price Volatility 106.25 % Risk-Free Annual Interest Rate 2.51 % Expected Life (in Years) 0.50 Share Price $ 0.04 Exercise Price $ 0.37 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Sep. 24, 2022 | |
Leases [Abstract] | |
Schedule of lease cost | Schedule of lease cost Three Months Ended September 24, September 25, 2022 2021 Finance Lease Cost: Amortization of Finance Lease Right-of-Use Assets $ 347,406 $ 283,406 Interest on Lease Liabilities 1,804,507 1,784,541 Operating Lease Cost 3,453,863 6,595,652 Sublease Income (1) (1,521,693 ) - Total Lease Expenses $ 5,605,776 $ 8,663,599 Cash Paid for Amounts Included in the Measurement of Lease Liabilities: Financing Cash Flows from Finance Leases $ 2,484 $ 959 Operating Cash Flows from Operating Leases $ 1,026,792 $ 3,478,891 (1) See “Note 16 – Other Operating Income” for further information. The weighted-average remaining lease term and discount rate related to the Company’s finance and operating lease liabilities as of September 24, 2022 and June 25, 2022, is as follows: September 24, June 25, 2022 2022 Weighted-Average Remaining Lease Term (Years) - Finance Leases 47 46 Weighted-Average Remaining Lease Term (Years) - Operating Leases 7 8 Weighted-Average Discount Rate - Finance Leases 24.78 % 24.33 % Weighted-Average Discount Rate - Operating Leases 15.96 % 18.70 % |
Schedule of future leases payments | Schedule of future leases payments Fiscal Year Ending Operating Finance July 1, 2023 (remaining) $ 9,155,365 $ 4,387,279 June 29, 2024 16,183,010 10,961,495 June 28, 2025 25,224,922 14,020,131 June 27, 2026 12,675,441 7,300,368 June 26, 2027 12,716,234 7,519,379 Thereafter 20,832,425 1,054,354,990 Total Lease Payments 96,787,396 1,098,543,643 Less Interest (37,307,828 ) (1,067,487,335 ) Lease Liability Recognized $ 59,479,568 $ 31,056,308 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 3 Months Ended |
Sep. 24, 2022 | |
Disclosure Notes Payable Abstract | |
Schedule of notes payable | Schedule of notes payable September 24, June 25, 2022 2022 Financing liability incurred on various dates between January 2019 through September 2019 with implied interest rates ranging from 0.7% to 17.0% per annum. $ 72,300,000 $ 72,300,000 Non-revolving, senior secured term notes dated between October 1, 2018 and October 30, 2020, issued to accredited investors, which mature on August 1, 2022 and July 31, 2022, and bear interest at a rate of 15.5% and 18.0% per annum. 66,819,991 97,162,001 Promissory notes dated November 7, 2018, issued to Lessor for tenant improvements as part of sales and leaseback transactions, which mature on November 7, 2028, bear interest at a rate of 10.0% per annum and require minimum monthly payments of $15,660 and $18,471. 2,057,207 2,057,207 Other 15,691 15,691 Total Notes Payable 141,192,889 171,534,899 Less Unamortized Debt Issuance Costs and Loan Origination Fees - (158,079 ) Net Amount $ 141,192,889 $ 171,376,820 Less Current Portion of Notes Payable (66,294,249 ) (97,003,922 ) Notes Payable, Net of Current Portion $ 74,898,640 $ 74,372,898 |
Schedule of Reconciliation of Notes payable | Schedule of Reconciliation of Notes payable September 24, 2022 Balance at Beginning of Period $ 171,376,820 Paid-In-Kind Interest Capitalized 1,257,988 Cash Payments (31,599,999 ) Accretion of Debt Discount Included in Discontinued Operations 158,079 Balance at End of Period 141,192,889 Less Current Portion of Notes Payable (66,294,249 ) Notes Payable, Net of Current Portion $ 74,898,640 |
SENIOR SECURED CONVERTIBLE CR_2
SENIOR SECURED CONVERTIBLE CREDIT FACILITY (Tables) | 3 Months Ended |
Sep. 24, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of senior secured convertible credit facility | Schedule of senior secured convertible credit facility September 24, June 25, Tranche 2022 2022 Senior secured convertible notes dated August 17, 2019, issued to accredited investors, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. 1A $ 23,376,684 $ 22,880,556 Senior secured convertible notes dated May 22, 2019, issued to accredited investors, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. 1B 100,679,152 98,542,422 Senior secured convertible notes dated July 12, 2019, issued to accredited investors, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. 2 32,738,817 32,043,996 Senior secured convertible notes dated November 27, 2019, issued to accredited investors, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. 3 12,677,140 12,408,091 Senior secured convertible notes dated March 27, 2020, issued to accredited investors, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. 4 14,911,453 14,594,985 Amendment fee converted to senior secured convertible notes dated October 29, 2019, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. - 23,932,224 23,424,438 Senior secured convertible notes dated April 24, 2020, issued to accredited investors, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. IA-1 3,346,889 3,275,857 Senior secured convertible notes dated September 14, 2020, issued to accredited investors, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. IA-2 6,472,344 6,334,980 Restatement fee issued in senior secured convertible notes dated March 27, 2020, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. - 10,103,343 9,888,919 Second restatement fee issued in senior secured convertible notes dated July 2, 2020, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. - 2,237,875 2,190,380 Third restatement fee issued in senior secured convertible notes dated January 11, 2021, which mature on August 17, 2028 and bear interest at LIBOR plus 6.0% per annum. - 12,587,295 12,320,154 Total Drawn on Senior Secured Convertible Credit Facility 243,063,216 237,904,778 Less Unamortized Debt Discount (104,317,146 ) (105,899,115 ) Senior Secured Convertible Credit Facility, Net $ 138,746,070 $ 132,005,663 |
SHAREHOLDERS_ EQUITY (Tables)
SHAREHOLDERS’ EQUITY (Tables) | 3 Months Ended |
Sep. 24, 2022 | |
Equity [Abstract] | |
Schedule of Shares issued and outstanding | Schedule of Shares issued and outstanding Subordinate MM CAN USA MM Enterprises USA Balance as of June 25, 2022 1,301,423,950 65,066,106 725,016 Redemption of MedMen Corp Redeemable Shares 259,814 (259,814 ) - Balance as of September 24, 2022 1,301,683,764 64,806,292 725,016 |
Schedule of VIE | Schedule of VIE Venice Caregivers Foundation, Inc. LAX Fund II Group, LLC Natures Cure, Inc. TOTAL Current Assets $ 1,180,136 $ - $ 24,602,018 $ 25,782,154 Non-Current Assets 8,763,511 3,233,062 4,891,725 16,888,298 Total Assets $ 9,943,647 $ 3,233,062 $ 29,493,743 $ 42,670,452 Current Liabilities $ 10,477,448 $ 16,016,119 $ 8,510,967 $ 35,004,534 Non-Current Liabilities 7,004,484 2,004,062 1,342,632 10,351,178 Total Liabilities $ 17,481,932 $ 18,020,181 $ 9,853,599 $ 45,355,712 Non-Controlling Interest $ (7,538,285 ) $ (14,787,119 ) $ 19,640,163 $ (2,685,241 ) Revenues $ 1,959,080 $ - $ 3,317,299 $ 5,276,379 Net (Loss) Income Attributable to Non-Controlling Interest $ (494,845 ) $ (810,965 ) $ 885,605 $ (420,205 ) As of and for the fiscal year ended June 25, 2022, the balances of the VIEs consists of the following: Venice Caregivers Foundation, Inc. LAX Fund II Group, LLC Natures Cure, Inc. TOTAL Current Assets $ 1,735,304 $ 1,067,636 $ 23,557,168 $ 26,360,108 Non-Current Assets 10,073,880 3,379,412 4,973,459 18,426,751 Total Assets $ 11,809,184 $ 4,447,048 $ 28,530,627 $ 44,786,859 Current Liabilities $ 9,238,460 $ 16,238,249 $ 8,433,436 $ 33,910,145 Non-Current Liabilities 9,614,164 2,184,953 1,342,633 13,141,750 Total Liabilities $ 18,852,624 $ 18,423,202 $ 9,776,069 $ 47,051,895 Non-Controlling Interest $ (7,043,440 ) $ (13,976,154 ) $ 18,754,558 $ (2,265,036 ) Revenues $ 8,732,449 $ 1,857 $ 16,157,388 $ 24,891,694 Net (Loss) Income Attributable to Non-Controlling Interest $ (1,384,751 ) $ (4,868,632 ) $ 7,190,809 $ 937,426 |
Schedule of other non-controlling interest | Schedule of other non-controlling interest Venice Caregivers Foundation, Inc. LAX Fund II Group, LLC Natures Cure, Inc. Other Non- Controlling Interests TOTAL Balance as of June 25, 2022 $ (7,043,440 ) $ (13,976,154 ) $ 18,754,558 $ (471,717,698 ) $ (473,982,734 ) Net (Loss) Income (494,845 ) (810,965 ) 885,605 307,893 (112,312 ) Balance as of September 24, 2022 $ (7,538,285 ) $ (14,787,119 ) $ 19,640,163 $ (471,409,805 ) $ (474,095,046 ) |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 3 Months Ended |
Sep. 24, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of share-based compensation expense | Schedule of share-based compensation expense Three Months Ended September 24, September 25, 2022 2021 Stock Options $ 863,685 $ 1,216,447 Stock Grants for Compensation - 333,333 Restricted Stock Grants - 1,554,297 Total Share-Based Compensation $ 863,685 $ 3,104,077 |
Schedule of stock options | Schedule of stock options Number of Weighted-Average Balance as of June 25, 2022 8,649,673 $ 1.35 Forfeited and Expired (205,354 ) $ (3.39 ) Balance as of September 24, 2022 8,444,319 $ 1.39 Stock Options Exercisable as of September 24, 2022 8,037,095 $ 1.27 |
Schedule of LTIP Units and LLC Redeemable Units | Schedule of LTIP Units and LLC Redeemable Units Weighted LTIP Units LLC Average Issued and Redeemable Grant Date Outstanding Units Fair Value Balance as of June 25, 2022 and September 24, 2022 19,323,878 725,016 $ 0.52 |
Schedule of Restricted Stock Grants | Schedule of Restricted Stock Grants Issued and Vested (1) Weighted-Average Balance as of June 25, 2022 10,998,483 4,030,460 $ 0.20 Forfeiture of Restricted Stock (2) (1,405,788 ) - $ (0.22 ) Vesting of Restricted Stock - 1,117,081 $ 0.22 Balance as of September 24, 2022 9,592,695 5,147,541 $ 0.20 (1) Restricted stock units were issued on September 24, 2021 and vests 37.5% on the first anniversary, 12.5% on the second anniversary, 37.5% on the third anniversary, and 12.5% on the fourth anniversary of the grant date. (2) Restricted stock units were forfeited upon resignation of certain employees prior to their vesting during the three months ended September 24, 2022. |
Schedule of Warrants | Schedule of Warrants Number of Warrants Outstanding Subordinate MM CAN USA TOTAL Weighted-Average Balance as of June 25, 2022 352,704,355 97,430,456 450,134,811 $ 0.25 Expired (2,677,535 ) - (2,677,535 ) $ (3.27 ) Balance as of September 24, 2022 350,026,820 97,430,456 447,457,276 $ 0.23 |
LOSS PER SHARE (Tables)
LOSS PER SHARE (Tables) | 3 Months Ended |
Sep. 24, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted loss per share | Schedule of basic and diluted loss per share Three Months Ended September 24, September 25, 2022 2021 Net Loss from Continuing Operations Attributable to Shareholders of MedMen Enterprises, Inc. $ (20,146,436 ) $ (40,883,537 ) Net Income (Loss) from Discontinued Operations 24,306,649 (14,446,491 ) Total Net Income (Loss) $ 4,160,213 $ (55,330,028 ) Weighted-Average Shares Outstanding - Basic and Diluted 1,301,659,701 942,696,052 Earnings (Loss) Per Share - Basic and Diluted: From Continuing Operations Attributable to Shareholders of MedMen Enterprises Inc. $ (0.02 ) $ (0.04 ) From Discontinued Operations Attributable to Shareholders of MedMen Enterprises Inc. $ 0.02 $ (0.02 ) |
GENERAL AND ADMINISTRATIVE EX_2
GENERAL AND ADMINISTRATIVE EXPENSES (Tables) | 3 Months Ended |
Sep. 24, 2022 | |
General And Administrative Expenses | |
Schedule of general and administrative expenses | Schedule of general and administrative expenses Three Months Ended September 24, September 25, 2022 2021 Salaries and Benefits $ 6,858,048 $ 9,911,488 Professional Fees 1,350,848 7,430,659 Rent 3,627,925 4,754,883 Licenses, Fees and Taxes 1,001,669 2,537,788 Share-Based Compensation 863,685 1,642,853 Deal Costs 429,272 1,637,587 Other General and Administrative 3,714,670 4,733,976 Total General and Administrative Expenses $ 17,846,117 $ 32,649,234 |
OTHER OPERATING (INCOME) EXPE_2
OTHER OPERATING (INCOME) EXPENSE (Tables) | 3 Months Ended |
Sep. 24, 2022 | |
Other Operating Income Expense | |
Schedule of other operating expenses | Schedule of other operating expenses Three Months Ended September 24, September 25, 2022 2021 Loss on Disposals of Assets $ 205,595 $ 15,146 Restructuring and Reorganization Expense 423,793 2,378,675 Gain on Settlement of Accounts Payable (74,637 ) (177,990 ) Gain on Lease Terminations (1,587,650 ) - Other Income (1,522,219 ) (16,803 ) Total Other Operating (Income) Expense $ (2,555,118 ) $ 2,199,028 |
PROVISION FOR INCOME TAXES AN_2
PROVISION FOR INCOME TAXES AND DEFERRED INCOME TAXES (Tables) | 3 Months Ended |
Sep. 24, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of income tax expense and effective tax rates | Schedule of income tax expense and effective tax rates Three Months Ended September 24, September 25, 2022 2021 Loss from Continuing Operations Before Provision for Income Taxes $ (18,065,206 ) $ (26,471,632 ) Income Tax Expense (2,193,542 ) (19,691,908 ) Effective Tax Rate -12 % -74 % |
REVENUE (Tables)
REVENUE (Tables) | 3 Months Ended |
Sep. 24, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of revenue | Schedule of Disaggregation of revenue Three Months Ended September 24, September 25, 2022 2021 California $ 19,928,985 $ 24,626,555 Nevada 2,997,469 4,079,151 Illinois 3,542,071 4,328,602 Arizona 2,794,648 3,701,596 Massachusetts 780,875 - Revenue from Continuing Operations $ 30,044,048 $ 36,735,904 Revenue from Discontinued Operations 3,629,641 7,340,099 Total Revenue $ 33,673,689 $ 44,076,003 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 3 Months Ended |
Sep. 24, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of net operating loss of discontinued operation | Schedule of net operating loss of discontinued operation Three Months Ended September 24, September 25, 2022 2021 Revenue $ 3,629,641 $ 7,340,099 Cost of Goods Sold 2,103,298 5,227,553 Gross Profit 1,526,343 2,112,546 Expenses: General and Administrative 4,983,995 5,617,595 Sales and Marketing 43,311 103,803 Depreciation and Amortization 872,895 1,221,759 Impairment Expense (78,433 ) - Gain on Disposal of Assets and Other Income (35,659,761 ) (597,591 ) Total (Income) Expenses (29,837,993 ) 6,345,566 Income (Loss) from Discontinued Operations 31,364,336 (4,233,020 ) Other Expense: Interest Expense 3,761,758 4,616,829 Accretion of Debt Discount and Loan Origination Fees 158,079 3,540,908 Total Other Expense 3,919,837 8,157,737 Income (Loss) from Discontinued Operations Before Provision for Income Taxes 27,444,499 (12,390,757 ) Provision for Income Tax Benefit (Expense) (3,137,850 ) (2,055,734 ) Net Income (Loss) from Discontinued Operations $ 24,306,649 $ (14,446,491 ) |
Schedule of assets included in discontinued operation | Schedule of assets included in discontinued operation September 24, June 25, 2022 2022 Carrying Amounts of the Assets Included in Discontinued Operations: Cash and Cash Equivalents $ 355,378 $ 1,124,076 Restricted Cash 5,280 5,280 Accounts Receivable and Prepaid Expenses 95,048 334,621 Inventory 2,915,345 6,866,833 TOTAL CURRENT ASSETS (1) Property and Equipment, Net 9,713,565 41,273,597 Operating Lease Right-of-Use Assets 19,780,991 31,543,058 Intangible Assets, Net 10,582,559 40,799,146 Other Assets 458,383 1,181,795 TOTAL ASSETS OF THE DISPOSAL GROUP CLASSIFIED AS HELD FOR SALE $ 43,906,549 $ 123,128,406 Carrying Amounts of the Liabilities Included in Discontinued Operations: Accounts Payable and Accrued Liabilities $ 2,640,664 $ 6,295,745 Income Taxes Payable (27,904 ) 1,671,380 Other Current Liabilities - 89,069 Current Portion of Operating Lease Liabilities 2,605,317 4,209,512 Current Portion of Finance Lease Liabilities - 174,000 TOTAL CURRENT LIABILITIES (1) Operating Lease Liabilities, Net of Current Portion 19,067,840 56,410,071 Deferred Tax Liabilities 6,250,511 6,097,597 Notes Payable - 11,100,000 TOTAL NON-CURRENT LIABILITIES (1) TOTAL LIABILITIES OF THE DISPOSAL GROUP CLASSIFIED AS HELD FOR SALE $ 30,536,428 $ 86,047,374 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | |
Jun. 25, 2022 | Sep. 24, 2022 | Sep. 25, 2021 | |
Accounting Policies [Abstract] | |||
Cash and cash equivalents | $ 21,100,000 | ||
Net working capital deficit | 134,900,000 | ||
Losses from continuing operations | $ 20,300,000 | $ 46,200,000 | |
Reclassifications impacted leasehold improvements and furniture and fixtures | $ 940,000 | ||
Reclassifications impacted customer relationships and accumulated amortization | 1,440,000 | ||
Reclassifications impacted accumulated amortization | 964,000 | ||
Reclassifications impacted Non-controlling interest and accumulated deficit | 3,662,000 | ||
Reclassifications impacted Short-term and long-term operating lease liabilities | $ 6,825,000 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) | Sep. 24, 2022 | Jun. 25, 2022 |
Inventory Disclosure [Abstract] | ||
Raw Materials | $ 612,901 | $ 521,777 |
Work-in-Process | 1,142,397 | 671,541 |
Finished Goods | 7,362,511 | 8,817,413 |
Total Inventory | $ 9,117,809 | $ 10,010,731 |
INVENTORY (Details Narrative)
INVENTORY (Details Narrative) | 3 Months Ended |
Sep. 25, 2021 USD ($) | |
Inventory Disclosure [Abstract] | |
Other Asset Impairment Charges | $ 864,314 |
ASSETS HELD FOR SALE (Details)
ASSETS HELD FOR SALE (Details) | 3 Months Ended | |
Sep. 24, 2022 USD ($) | ||
Subsidiary, Sale of Stock [Line Items] | ||
Balance at Beginning of Period | $ 123,158,751 | |
Balance at End of Period | 44,185,218 | |
Discontinued Operations [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Balance at Beginning of Period | 123,128,406 | [1] |
Ongoing Activities | (47,881,618) | [1] |
Proceeds from Sale | (67,000,000) | [1] |
Gain on Sale of Assets Held for Sale | 35,659,761 | [1] |
Balance at End of Period | 43,906,549 | [1] |
Other Asset [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Balance at Beginning of Period | 30,345 | |
Ongoing Activities | 248,324 | |
Proceeds from Sale | ||
Gain on Sale of Assets Held for Sale | ||
Balance at End of Period | 278,669 | |
Total [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Balance at Beginning of Period | 123,158,751 | |
Ongoing Activities | (47,633,294) | |
Proceeds from Sale | (67,000,000) | |
Gain on Sale of Assets Held for Sale | 35,659,761 | |
Balance at End of Period | $ 44,185,218 | |
[1] See “Note 22 – Discontinued Operations” for further information. |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Sep. 24, 2022 | Jun. 25, 2022 |
Property, Plant and Equipment [Abstract] | ||
Land and Buildings | $ 29,933,999 | $ 29,933,999 |
Capital Leases | 5,318,516 | 5,315,625 |
Furniture and Fixtures | 8,325,228 | 8,776,994 |
Leasehold Improvements | 33,625,893 | 33,069,524 |
Equipment and Software | 16,316,334 | 16,897,649 |
Construction in Progress | 4,528,762 | 6,828,923 |
Total Property and Equipment | 98,048,732 | 100,822,714 |
Less Accumulated Depreciation | (38,082,797) | (36,714,922) |
Property and Equipment, Net | $ 59,965,935 | $ 64,107,792 |
PROPERTY AND EQUIPMENT (Detai_2
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | |
Sep. 24, 2022 | Sep. 25, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Other Depreciation and Amortization | $ 2,258,354 | $ 3,031,080 |
Cost of Goods and Services Sold | 24,950 | 433,300 |
Depreciation recognized for capital leases | 347,406 | $ 283,406 |
Borrowing costs | $ 375,241 | |
Average capitalization rate | 11.95% |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) | Sep. 24, 2022 | Jun. 25, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Total Intangible Assets | $ 77,093,119 | $ 77,093,119 |
Less Accumulated Amortization | (43,036,068) | (41,347,005) |
Intangible Assets, Net | 34,057,051 | 35,746,114 |
Capitalized Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total Intangible Assets | 7,413,470 | 7,413,470 |
Less Accumulated Amortization | (4,681,748) | (4,413,974) |
Customer Relationship [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total Intangible Assets | 16,409,600 | 16,409,600 |
Less Accumulated Amortization | (16,589,651) | (15,870,284) |
Intellectual Property [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total Intangible Assets | 4,016,597 | 4,016,597 |
Less Accumulated Amortization | (4,287,401) | (4,185,835) |
Dispensary License [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total Intangible Assets | 49,253,452 | 49,253,452 |
Less Accumulated Amortization | $ (17,477,268) | $ (16,876,912) |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | |
Sep. 24, 2022 | Sep. 25, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Depreciation, Depletion and Amortization, Nonproduction | $ 1,713,119 | $ 3,225,837 |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Details) - USD ($) | Sep. 24, 2022 | Jun. 25, 2022 |
Extinguishment of Debt [Line Items] | ||
Total Accounts Payable and Accrued Liabilities | $ 35,355,136 | $ 38,905,818 |
Accounts Payable and Accrued Liabilities [Member] | ||
Extinguishment of Debt [Line Items] | ||
Accounts Payable | 19,078,177 | 14,627,746 |
Accrued Liabilities | 7,784,119 | 10,031,194 |
Accrued Inventory | 3,129,868 | 5,868,831 |
Accrued Payroll | 2,081,284 | 1,682,517 |
Local & State Taxes Payable | 3,281,687 | 6,695,532 |
Total Accounts Payable and Accrued Liabilities | $ 35,355,136 | $ 38,905,818 |
DERIVATIVE LIABILITIES (Details
DERIVATIVE LIABILITIES (Details) - USD ($) | 3 Months Ended | |
Sep. 24, 2022 | Sep. 25, 2021 | |
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||
Change in Fair Value of Derivative Liabilities | $ 805,590 | $ (2,105,415) |
Derivative Liabilities One [Member] | ||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||
Balance at Beginning of Period | 6,749,563 | |
Change in Fair Value of Derivative Liabilities | 805,590 | |
Balance at End of Period | $ 7,555,153 |
DERIVATIVE LIABILITIES (Detai_2
DERIVATIVE LIABILITIES (Details 1) | 3 Months Ended |
Sep. 24, 2022 $ / shares | |
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |
Share Price | $ 0.04 |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Term | 6 months |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 106.25% |
Top Up Provision [Member] | |
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |
Share Price | $ 0.04 |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Weighted Average Volatility Rate | 50% |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Term | 5 years |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 96.68% |
DERIVATIVE LIABILITIES (Detai_3
DERIVATIVE LIABILITIES (Details 2) | Sep. 24, 2022 shares | |
Disclosure Derivative Liabilities Abstract | ||
March 2021 Private Placement | 50,000,000 | [1] |
Total | 50,000,000 | |
[1] See “Note 12 – Shareholders’ Equity” for further information. |
DERIVATIVE LIABILITIES (Detai_4
DERIVATIVE LIABILITIES (Details 3) | 3 Months Ended |
Sep. 24, 2022 $ / shares | |
Disclosure Derivative Liabilities Abstract | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 106.25% |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 2.51% |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Term | 6 months |
Share Price | $ 0.04 |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Exercise Price | $ 0.37 |
LEASES (Details)
LEASES (Details) - USD ($) | 3 Months Ended | |||
Sep. 24, 2022 | Sep. 25, 2021 | Jun. 25, 2022 | ||
Finance Lease Cost: | ||||
Amortization of Finance Lease Right-of-Use Assets | $ 347,406 | $ 283,406 | ||
Interest on Lease Liabilities | 1,804,507 | 1,784,541 | ||
Operating Lease Cost | 3,453,863 | 6,595,652 | ||
Sublease Income | [1] | (1,521,693) | ||
Total Lease Expenses | 5,605,776 | 8,663,599 | ||
Cash Paid for Amounts Included in the Measurement of Lease Liabilities: | ||||
Financing Cash Flows from Finance Leases | 2,484 | 959 | ||
Operating Cash Flows from Operating Leases | $ 1,026,792 | $ 3,478,891 | ||
Finance Lease, Weighted Average Remaining Lease Term | 47 years | 46 years | ||
Operating Lease, Weighted Average Remaining Lease Term | 7 years | 8 years | ||
Finance Lease, Weighted Average Discount Rate, Percent | 24.78% | 24.33% | ||
Operating Lease, Weighted Average Discount Rate, Percent | 15.96% | 18.70% | ||
[1] See “Note 16 – Other Operating Income” for further information. |
LEASES (Details 1)
LEASES (Details 1) | Sep. 24, 2022 USD ($) |
Leases [Abstract] | |
July 1, 2023 (remaining) | $ 9,155,365 |
July 1, 2023 (remaining) | 4,387,279 |
June 29, 2024 | 16,183,010 |
June 29, 2024 | 10,961,495 |
June 28, 2025 | 25,224,922 |
June 28, 2025 | 14,020,131 |
June 27, 2026 | 12,675,441 |
June 27, 2026 | 7,300,368 |
June 26, 2027 | 12,716,234 |
June 26, 2027 | 7,519,379 |
Thereafter | 20,832,425 |
Thereafter | 1,054,354,990 |
Total lease payment | 96,787,396 |
Total lease payment | 1,098,543,643 |
Less Interest | (37,307,828) |
Less Interest | (1,067,487,335) |
Lease Liability Recognized | 59,479,568 |
Lease Liability Recognized | $ 31,056,308 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - USD ($) | Sep. 24, 2022 | Jun. 25, 2022 |
Short-Term Debt [Line Items] | ||
Finance liabilities | $ 4,150,484 | $ 4,061,273 |
Total notes Payables | 74,898,640 | 74,372,898 |
Convertible Notes Payable [Member] | ||
Short-Term Debt [Line Items] | ||
Finance liabilities | 72,300,000 | 72,300,000 |
Notes Payable, Current | 66,819,991 | 97,162,001 |
Promissory notes | 2,057,207 | 2,057,207 |
Other | 15,691 | 15,691 |
Total notes Payables | 141,192,889 | 171,534,899 |
Less. Unamortization Debt Issuance Cost an Loan Origination Fess | (158,079) | |
Net Amount | 141,192,889 | 171,376,820 |
Less Current Portion of Notes Payable | (66,294,249) | (97,003,922) |
Notes Payables, net of Current Portion | $ 74,898,640 | $ 74,372,898 |
NOTES PAYABLE (Details 1)
NOTES PAYABLE (Details 1) - Notes Payable [Member] | 3 Months Ended |
Sep. 24, 2022 USD ($) | |
Short-Term Debt [Line Items] | |
Balance at beginning of period | $ 171,376,820 |
Paid in kind interest Capitalized | 1,257,988 |
Cash payments | (31,599,999) |
Accretion of Debt Discount included in Discontinued Operations | 158,079 |
Balance at End of period | 141,192,889 |
Less Current portion of notes payables | (66,294,249) |
Notes payable, Net of Current portion | $ 74,898,640 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | 3 Months Ended | |
Feb. 02, 2022 | Sep. 24, 2022 | |
Disclosure Notes Payable Abstract | ||
Proceeds from Sale of Other Assets | $ 37,500,000 | |
Proceeds from (Repayments of) Debt | $ 31,599,999 |
SENIOR SECURED CONVERTIBLE CR_3
SENIOR SECURED CONVERTIBLE CREDIT FACILITY (Details) - USD ($) | Sep. 24, 2022 | Jun. 25, 2022 |
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||
Total Drawn On Senior Secured Convertible Credit Facility | $ 243,063,216 | $ 237,904,778 |
Less Unamortize Debt Discount | (104,317,146) | (105,899,115) |
Senior Secured Convertible Credit Facility Net | 138,746,070 | 132,005,663 |
Secured Convertible Note [Member] | ||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||
Total Drawn On Senior Secured Convertible Credit Facility | 23,376,684 | 22,880,556 |
Secured Convertible Note 1 [Member] | ||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||
Total Drawn On Senior Secured Convertible Credit Facility | 100,679,152 | 98,542,422 |
Secured Convertible Note 2 [Member] | ||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||
Total Drawn On Senior Secured Convertible Credit Facility | 32,738,817 | 32,043,996 |
Secured Convertible Note 3 [Member] | ||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||
Total Drawn On Senior Secured Convertible Credit Facility | 12,677,140 | 12,408,091 |
Secured Convertible Note 4 [Member] | ||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||
Total Drawn On Senior Secured Convertible Credit Facility | 14,911,453 | 14,594,985 |
Secured Convertible Note 5 [Member] | ||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||
Total Drawn On Senior Secured Convertible Credit Facility | 23,932,224 | 23,424,438 |
Secured Convertible Note 6 [Member] | ||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||
Total Drawn On Senior Secured Convertible Credit Facility | 3,346,889 | 3,275,857 |
Secured Convertible Note 7 [Member] | ||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||
Total Drawn On Senior Secured Convertible Credit Facility | 6,472,344 | 6,334,980 |
Secured Convertible Note 8 [Member] | ||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||
Total Drawn On Senior Secured Convertible Credit Facility | 10,103,343 | 9,888,919 |
Secured Convertible Note 9 [Member] | ||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||
Total Drawn On Senior Secured Convertible Credit Facility | 2,237,875 | 2,190,380 |
Secured Convertible Note 10 [Member] | ||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||
Total Drawn On Senior Secured Convertible Credit Facility | $ 12,587,295 | $ 12,320,154 |
SENIOR SECURED CONVERTIBLE CR_4
SENIOR SECURED CONVERTIBLE CREDIT FACILITY (Details Narrative) | 3 Months Ended |
Sep. 24, 2022 USD ($) | |
Senior Secured Convertible Total [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Balance at beginning of period | $ 132,005,663 |
Paid-In-Kind Interest Capitalized | 5,158,438 |
Accretion of Debt Discount | 1,581,969 |
Balance at end of period | 138,746,070 |
Tranche One [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Balance at beginning of period | 80,178,586 |
Paid-In-Kind Interest Capitalized | 2,632,858 |
Accretion of Debt Discount | 988,849 |
Balance at end of period | 83,800,293 |
Tranche Two [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Balance at beginning of period | 21,218,356 |
Paid-In-Kind Interest Capitalized | 694,821 |
Accretion of Debt Discount | 260,580 |
Balance at end of period | 22,173,757 |
Tranche Three [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Balance at beginning of period | 8,217,079 |
Paid-In-Kind Interest Capitalized | 269,049 |
Accretion of Debt Discount | 100,902 |
Balance at end of period | 8,587,030 |
Tranche Four [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Balance at beginning of period | 1,051,827 |
Paid-In-Kind Interest Capitalized | 316,468 |
Accretion of Debt Discount | |
Balance at end of period | 1,368,295 |
Incremental Advance One [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Balance at beginning of period | 224,585 |
Paid-In-Kind Interest Capitalized | 71,032 |
Accretion of Debt Discount | |
Balance at end of period | 295,617 |
Incremental Advance Two [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Balance at beginning of period | 433,598 |
Paid-In-Kind Interest Capitalized | 137,364 |
Accretion of Debt Discount | |
Balance at end of period | 570,962 |
Advance 3rd [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Balance at beginning of period | 842,981 |
Paid-In-Kind Interest Capitalized | 267,141 |
Accretion of Debt Discount | |
Balance at end of period | 1,110,122 |
Amendment Fee Notes [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Balance at beginning of period | 15,512,409 |
Paid-In-Kind Interest Capitalized | 507,786 |
Accretion of Debt Discount | 190,486 |
Balance at end of period | 16,210,681 |
Restatement Fee Notes [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Balance at beginning of period | 2,211,711 |
Paid-In-Kind Interest Capitalized | 214,424 |
Accretion of Debt Discount | 37,165 |
Balance at end of period | 2,463,300 |
Second Restatement Fee Notes [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Balance at beginning of period | 2,114,531 |
Paid-In-Kind Interest Capitalized | 47,495 |
Accretion of Debt Discount | 3,987 |
Balance at end of period | $ 2,166,013 |
SHAREHOLDERS' EQUITY (Details)
SHAREHOLDERS' EQUITY (Details) | 3 Months Ended |
Sep. 24, 2022 shares | |
Mm Can Usa Class B Redeemable Units [Member] | |
Class of Warrant or Right [Line Items] | |
Beginning balance, shares | 65,066,106 |
Redemption of MedMen Corp Redeemable Shares | (259,814) |
Ending balance, shares | 64,806,292 |
Mm Enterprises Usa Common Units [Member] | |
Class of Warrant or Right [Line Items] | |
Beginning balance, shares | 725,016 |
Redemption of MedMen Corp Redeemable Shares | |
Ending balance, shares | 725,016 |
Subordinate Voting Shares [Member] | |
Class of Warrant or Right [Line Items] | |
Beginning balance, shares | 1,301,423,950 |
Redemption of MedMen Corp Redeemable Shares | 259,814 |
Ending balance, shares | 1,301,683,764 |
SHAREHOLDERS' EQUITY (Details 1
SHAREHOLDERS' EQUITY (Details 1) - USD ($) | 3 Months Ended | 12 Months Ended |
Sep. 24, 2022 | Jun. 25, 2022 | |
Venice Caregivers Foundation Inc [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Current Assets | $ 1,180,136 | $ 1,735,304 |
Non-Current Assets | 8,763,511 | 10,073,880 |
Total Assets | 9,943,647 | 11,809,184 |
Current Liabilities | 10,477,448 | 9,238,460 |
Non-Current Liabilities | 7,004,484 | 9,614,164 |
Total Liabilities | 17,481,932 | 18,852,624 |
Non-Controlling Interest | (7,538,285) | (7,043,440) |
Revenues | 1,959,080 | 8,732,449 |
Net (Loss) Income Attributable to Non-Controlling Interest | (494,845) | (1,384,751) |
L A X Fund Two Group L L C [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Current Assets | 1,067,636 | |
Non-Current Assets | 3,233,062 | 3,379,412 |
Total Assets | 3,233,062 | 4,447,048 |
Current Liabilities | 16,016,119 | 16,238,249 |
Non-Current Liabilities | 2,004,062 | 2,184,953 |
Total Liabilities | 18,020,181 | 18,423,202 |
Non-Controlling Interest | (14,787,119) | (13,976,154) |
Revenues | 1,857 | |
Net (Loss) Income Attributable to Non-Controlling Interest | (810,965) | (4,868,632) |
Natures Cure Inc [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Current Assets | 24,602,018 | 23,557,168 |
Non-Current Assets | 4,891,725 | 4,973,459 |
Total Assets | 29,493,743 | 28,530,627 |
Current Liabilities | 8,510,967 | 8,433,436 |
Non-Current Liabilities | 1,342,632 | 1,342,633 |
Total Liabilities | 9,853,599 | 9,776,069 |
Non-Controlling Interest | 19,640,163 | 18,754,558 |
Revenues | 3,317,299 | 16,157,388 |
Net (Loss) Income Attributable to Non-Controlling Interest | 885,605 | 7,190,809 |
Vies Total [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Current Assets | 25,782,154 | 26,360,108 |
Non-Current Assets | 16,888,298 | 18,426,751 |
Total Assets | 42,670,452 | 44,786,859 |
Current Liabilities | 35,004,534 | 33,910,145 |
Non-Current Liabilities | 10,351,178 | 13,141,750 |
Total Liabilities | 45,355,712 | 47,051,895 |
Non-Controlling Interest | (2,685,241) | (2,265,036) |
Revenues | 5,276,379 | 24,891,694 |
Net (Loss) Income Attributable to Non-Controlling Interest | $ (420,205) | $ 937,426 |
SHAREHOLDERS' EQUITY (Details 2
SHAREHOLDERS' EQUITY (Details 2) - USD ($) | 3 Months Ended | |
Sep. 24, 2022 | Sep. 25, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Net (Loss) Income | $ 4,047,901 | $ (60,610,031) |
Venice Caregivers Foundation Inc [Member] | Non Controlling Interests [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance at beginning | (7,043,440) | |
Net (Loss) Income | (494,845) | |
Balance at ending | (7,538,285) | |
L A X Fund Two Group L L C [Member] | Non Controlling Interests [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance at beginning | (13,976,154) | |
Net (Loss) Income | (810,965) | |
Balance at ending | (14,787,119) | |
Natures Cure Inc [Member] | Non Controlling Interests [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance at beginning | 18,754,558 | |
Net (Loss) Income | 885,605 | |
Balance at ending | 19,640,163 | |
Other Non Controlling Interests [Member] | Non Controlling Interests [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance at beginning | (471,717,698) | |
Net (Loss) Income | 307,893 | |
Balance at ending | (471,409,805) | |
Total [Member] | Non Controlling Interests [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance at beginning | (473,982,734) | |
Net (Loss) Income | (112,312) | |
Balance at ending | $ (474,095,046) |
SHAREHOLDERS_ EQUITY (Details N
SHAREHOLDERS’ EQUITY (Details Narrative) | Sep. 24, 2022 | Jun. 25, 2022 |
MM CAN USA [Member] | ||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 4.74% | 4.76% |
MM Enterprises USA [Member] | ||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 0.05% |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - USD ($) | 3 Months Ended | |
Sep. 24, 2022 | Sep. 25, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Total Share-Based Compensation | $ 863,685 | $ 3,104,077 |
Equity Option [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Total Share-Based Compensation | 863,685 | 1,216,447 |
Stock Grants [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Total Share-Based Compensation | 333,333 | |
Restricted Stock Grants [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Total Share-Based Compensation | $ 1,554,297 |
SHARE-BASED COMPENSATION (Det_2
SHARE-BASED COMPENSATION (Details 1) | 3 Months Ended |
Sep. 24, 2022 $ / shares shares | |
Share-Based Payment Arrangement [Abstract] | |
Number of Stock Options, Beginning Balance | shares | 8,649,673 |
Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 1.35 |
Number of Stock Options, Forfeited | shares | (205,354) |
Weighted Average Exercise Price, Forfeited | $ / shares | $ (3.39) |
Number of Stock Options, Ending Balance | shares | 8,444,319 |
Weighted Average Exercise Price, Ending Balance | $ / shares | $ 1.39 |
Number of Stock Options, Stock Options Exercisable | shares | 8,037,095 |
Weighted Average Exercise Price, Stock Options Exercisable | $ / shares | $ 1.27 |
SHARE-BASED COMPENSATION (Det_3
SHARE-BASED COMPENSATION (Details 2) | Sep. 24, 2022 $ / shares shares |
Share-Based Payment Arrangement [Abstract] | |
LTIP Issued And Outstanding | 19,323,878 |
LLC Redeemable Units | 725,016 |
Weighted Average grant date fair Value | $ / shares | $ 0.52 |
SHARE-BASED COMPENSATION (Det_4
SHARE-BASED COMPENSATION (Details 3) | 3 Months Ended | |
Sep. 24, 2022 $ / shares shares | ||
Share-Based Payment Arrangement [Abstract] | ||
Issued And Outstanding, Beginning Balance | 10,998,483 | |
Vested, Beginning Balance | 4,030,460 | [1] |
Weighted average fair value at beginning | $ / shares | $ 0.20 | |
Issued And Outstanding, Forfeiture of Restricted Stock | (1,405,788) | [2] |
Vested, Forfeiture of Restricted Stock | [1],[2] | |
Weighted Average fair Value, Forfeiture of Restricted Stock | $ / shares | $ (0.22) | [2] |
Vesting of Restricted Stock | ||
Vested, Vesting of Restricted Stock | 1,117,081 | [1] |
WeightedAverage Fair Value, Vesting of Restricted Stock | $ / shares | $ 0.22 | |
Issued And Outstanding, Ending Balance | 9,592,695 | |
Vested, Ending Balance | 5,147,541 | [1] |
Weighted average fair value at ending | $ / shares | $ 0.20 | |
[1] Restricted stock units were issued on September 24, 2021 and vests 37.5% on the first anniversary, 12.5% on the second anniversary, 37.5% on the third anniversary, and 12.5% on the fourth anniversary of the grant date. Restricted stock units were forfeited upon resignation of certain employees prior to their vesting during the three months ended September 24, 2022. |
SHARE-BASED COMPENSATION (Det_5
SHARE-BASED COMPENSATION (Details 4) - Warrant [Member] | 3 Months Ended |
Sep. 24, 2022 $ / shares shares | |
Class of Warrant or Right [Line Items] | |
Beginning Balance | 450,134,811 |
Weighted Average Exercise Price, Beginning balance | $ / shares | $ 0.25 |
Expired | (2,677,535) |
Weighted Average Exercise Price, Expired | $ / shares | $ (3.27) |
Ending Balance | 447,457,276 |
Weighted Average Exercise Price, Ending | $ / shares | $ 0.23 |
[Subordinate Voting Shares [Member]] | |
Class of Warrant or Right [Line Items] | |
Beginning Balance | 352,704,355 |
Expired | (2,677,535) |
Ending Balance | 350,026,820 |
Mm Can Usa Class B Redeemable Units [Member] | |
Class of Warrant or Right [Line Items] | |
Beginning Balance | 97,430,456 |
Expired | |
Ending Balance | 97,430,456 |
SHARE-BASED COMPENSATION (Det_6
SHARE-BASED COMPENSATION (Details Narrative) | 3 Months Ended |
Sep. 24, 2022 | |
Minimum [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period | 5 years |
Maximum [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period | 10 years |
LOSS PER SHARE (Details)
LOSS PER SHARE (Details) - USD ($) | 3 Months Ended | |
Sep. 24, 2022 | Sep. 25, 2021 | |
Earnings Per Share [Abstract] | ||
Net Loss from Continuing Operations Attributable to Shareholders of MedMen Enterprises, Inc. | $ (20,146,436) | $ (40,883,537) |
Net Income (Loss) from Discontinued Operations | 24,306,649 | (14,446,491) |
Total Net Income (Loss) | $ 4,160,213 | $ (55,330,028) |
Weighted-Average Shares Outstanding - Basic and Diluted | 1,301,659,701 | 942,696,052 |
Earnings (Loss) Per Share - Basic and Diluted: | ||
From Continuing Operations Attributable to Shareholders of MedMen Enterprises Inc. | $ (0.02) | $ (0.04) |
From Discontinued Operations Attributable to Shareholders of MedMen Enterprises Inc. | $ 0.02 | $ (0.02) |
GENERAL AND ADMINISTRATIVE EX_3
GENERAL AND ADMINISTRATIVE EXPENSES (Details) - USD ($) | 3 Months Ended | |
Sep. 24, 2022 | Sep. 25, 2021 | |
General And Administrative Expenses | ||
Salaries and Benefits | $ 6,858,048 | $ 9,911,488 |
Professional Fees | 1,350,848 | 7,430,659 |
Rent | 3,627,925 | 4,754,883 |
Licenses, Fees and Taxes | 1,001,669 | 2,537,788 |
Share-Based Compensation | 863,685 | 1,642,853 |
Deal Costs | 429,272 | 1,637,587 |
Other General and Administrative | 3,714,670 | 4,733,976 |
Total General and Administrative Expenses | $ 17,846,117 | $ 32,649,234 |
OTHER OPERATING EXPENSE (Detail
OTHER OPERATING EXPENSE (Details) - USD ($) | 3 Months Ended | |
Sep. 24, 2022 | Sep. 25, 2021 | |
Other Operating Income Expense | ||
Loss on Disposals of Assets | $ 205,595 | $ 15,146 |
Restructuring and Reorganization Expense | 423,793 | 2,378,675 |
Gain on Settlement of Accounts Payable | (74,637) | (177,990) |
Gain on Lease Terminations | (1,587,650) | |
Other Income | (1,522,219) | (16,803) |
Total Other Operating (Income) Expense | $ (2,555,118) | $ 2,199,028 |
OTHER OPERATING (INCOME) EXPE_3
OTHER OPERATING (INCOME) EXPENSE (Details Narrative) | 3 Months Ended |
Sep. 24, 2022 USD ($) | |
Other Operating Income Expense | |
Sublease income | $ 1,521,650 |
PROVISION FOR INCOME TAXES AN_3
PROVISION FOR INCOME TAXES AND DEFERRED INCOME TAXES (Details) - USD ($) | 3 Months Ended | |
Sep. 24, 2022 | Sep. 25, 2021 | |
Income Tax Disclosure [Abstract] | ||
Loss from Continuing Operations Before Provision for Income Taxes | $ (18,065,206) | $ (26,471,632) |
Income Tax Expense | $ (2,193,542) | $ (19,691,908) |
Effective Tax Rate | (12.00%) | (74.00%) |
PROVISION FOR INCOME TAXES AN_4
PROVISION FOR INCOME TAXES AND DEFERRED INCOME TAXES (Details Narrative) | 3 Months Ended |
Sep. 24, 2022 USD ($) | |
Income Tax Disclosure [Abstract] | |
Provision for income taxes and deferred income taxes description | The Company has approximately gross $12,230,000 (tax effected $3,240,000) of Canadian non-capital losses and $6,000,000 (tax effected $1,620,000) of share issuance cost 20(1)(e) balance. The loss tax attribute has been determined to be more likely than not that the tax attribute would not yield any tax benefit. As such, the Company has recorded a full valuation allowance against the benefit. Since IRC Section 280E was not applied in the California Franchise Tax Returns, the Company has approximately $22,000,000 of gross California net operating losses which begin expiring in 2033 as of June 25, 2022. The Company has evaluated the realization of its California net operating loss tax attribute and has determined under the more likely than not standard that $217,300,000 will not be realized. |
Gross unrecognized tax benefits | $ 18,781,424 |
Net discrete tax expense | $ 407,993 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) | 3 Months Ended |
Sep. 24, 2022 USD ($) | |
Board of Directors Chairman [Member] | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
Debt Instrument, Periodic Payment | $ 200,000 |
REVENUE (Details)
REVENUE (Details) - USD ($) | 3 Months Ended | |
Sep. 24, 2022 | Sep. 25, 2021 | |
Financing Receivable, Past Due [Line Items] | ||
Total Revenue | $ 33,673,689 | $ 44,076,003 |
Revenue from Continuing Operations | 30,044,048 | 36,735,904 |
Revenue from Discontinued Operations | 3,629,641 | 7,340,099 |
CALIFORNIA | ||
Financing Receivable, Past Due [Line Items] | ||
Total Revenue | 19,928,985 | 24,626,555 |
NEVADA | ||
Financing Receivable, Past Due [Line Items] | ||
Total Revenue | 2,997,469 | 4,079,151 |
ILLINOIS | ||
Financing Receivable, Past Due [Line Items] | ||
Total Revenue | 3,542,071 | 4,328,602 |
ARIZONA | ||
Financing Receivable, Past Due [Line Items] | ||
Total Revenue | 2,794,648 | 3,701,596 |
MASSACHUSETTS | ||
Financing Receivable, Past Due [Line Items] | ||
Total Revenue | $ 780,875 |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details) - USD ($) | 3 Months Ended | |
Sep. 24, 2022 | Sep. 25, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | ||
Revenue | $ 3,629,641 | $ 7,340,099 |
Cost of Goods Sold | 2,103,298 | 5,227,553 |
Gross Profit | 1,526,343 | 2,112,546 |
Expenses: | ||
General and Administrative | 4,983,995 | 5,617,595 |
Sales and Marketing | 43,311 | 103,803 |
Depreciation and Amortization | 872,895 | 1,221,759 |
Impairment Expense | (78,433) | |
Gain on Disposal of Assets and Other Income | (35,659,761) | (597,591) |
Total (Income) Expenses | (29,837,993) | 6,345,566 |
Income (Loss) from Discontinued Operations | 31,364,336 | (4,233,020) |
Other Expense: | ||
Interest Expense | 3,761,758 | 4,616,829 |
Accretion of Debt Discount and Loan Origination Fees | 158,079 | 3,540,908 |
Total Other Expense | 3,919,837 | 8,157,737 |
Income (Loss) from Discontinued Operations Before Provision for Income Taxes | 27,444,499 | (12,390,757) |
Provision for Income Tax Benefit (Expense) | (3,137,850) | (2,055,734) |
Net Income (Loss) from Discontinued Operations | $ 24,306,649 | $ (14,446,491) |
DISCONTINUED OPERATIONS (Deta_2
DISCONTINUED OPERATIONS (Details 1) - USD ($) | Sep. 24, 2022 | Jun. 25, 2022 |
Carrying Amounts of the Assets Included in Discontinued Operations: | ||
Cash and Cash Equivalents | $ 355,378 | $ 1,124,076 |
Restricted Cash | 5,280 | 5,280 |
Accounts Receivable and Prepaid Expenses | 95,048 | 334,621 |
Inventory | 2,915,345 | 6,866,833 |
TOTAL CURRENT ASSETS (1) | ||
Property and Equipment, Net | 9,713,565 | 41,273,597 |
Operating Lease Right-of-Use Assets | 19,780,991 | 31,543,058 |
Intangible Assets, Net | 10,582,559 | 40,799,146 |
Other Assets | 458,383 | 1,181,795 |
TOTAL ASSETS OF THE DISPOSAL GROUP CLASSIFIED AS HELD FOR SALE | 43,906,549 | 123,128,406 |
Carrying Amounts of the Liabilities Included in Discontinued Operations: | ||
Accounts Payable and Accrued Liabilities | 2,640,664 | 6,295,745 |
Income Taxes Payable | (27,904) | 1,671,380 |
Other Current Liabilities | 89,069 | |
Current Portion of Operating Lease Liabilities | 2,605,317 | 4,209,512 |
Current Portion of Finance Lease Liabilities | 174,000 | |
TOTAL CURRENT LIABILITIES (1) | ||
Operating Lease Liabilities, Net of Current Portion | 19,067,840 | 56,410,071 |
Deferred Tax Liabilities | 6,250,511 | 6,097,597 |
Notes Payable | 11,100,000 | |
TOTAL NON-CURRENT LIABILITIES (1) | ||
TOTAL LIABILITIES OF THE DISPOSAL GROUP CLASSIFIED AS HELD FOR SALE | $ 30,536,428 | $ 86,047,374 |
DISCONTINUED OPERATIONS (Deta_3
DISCONTINUED OPERATIONS (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | |
Sep. 15, 2022 | Aug. 22, 2022 | Sep. 24, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |||
Sales Price | $ 67,000,000 | ||
Sales in cash | 63,000,000 | ||
Liabilities assumed by buyer | 4,000,000 | ||
Buyer cash payment description | The Buyer made a cash payment of $40,000,000 at closing, a cash payment of $11,500,000 on September 15, 2022 and is required to make one additional installment payment of $11,500,000 on or before March 15, 2023. | ||
Proceeds from Other Debt | $ 31,599,999 | ||
Proceeds from Issuance of Debt | 19,558,947 | ||
Remains due and payable | $ 11,500,000 | ||
Gain (Loss) on Disposition of Assets for Financial Service Operations | $ 31,719,833 |