Culver City marijuana investment outfit MedMen Opportunity Fund GP - also known as MedMen - filed paperwork with the Securities & Exchange Commission Monday showing it had raised just $60 million of an inaugural $100 million fund.
The company decided to wind down the fund in April without reaching its target because one of their initial investments was set to undergo a liquidity event, according to MedMen spokesman Daniel Yi. The investment, a $10 million stake in Canadian medical marijuana company MedReleaf Corp., turned into $33 million when MedReleaf went public last Wednesday on the Toronto Stock Exchange.
Yi said that MedMen management felt it unfair to early investors to take in new money after MedReleaf announced its initial offering plans April 28 given the large windfall. MedMen officially closed the fund May 31.
The firm’s decision to close the fund early before hitting the $100 million mark is a step back from MedMen Chief Executive Adam Bierman’s predictions last fall. He said in a September interview with the Business Journal that MedMen expected to raise the full $100 million by the end of 2016. Yi said that Bierman’s estimate was speculative and that the fund officially had a one year capital raise window from the time it announced last June.
“He might have been a bit ambitious based on how things were going at the time,” Yi said. “But the fund’s range was always up to $100 million with a (one) year period to close.”
The MedMen fund also has stakes in two pot shops - one in Venice and one in Santa Ana - and cultivation operations in Nevada and Desert Hot Springs, among other investments.
Filings with the California Secretary of State’s office show MedMen registered a second fund entity – MedMen Opportunity Fund II – in May. Yi confirmed that the firm planned a second investment vehicle, but declined to offer more details.
This post has been updated to correct the name MedMen parent company associated with the investment fund and the amount of time the fund had to raise capital.
Deals & Dealmakers reporter Henry Meier can be reached at firstname.lastname@example.org. Follow him on Twitter @henry_meier.