MedMen Enterprises Inc.

MMEN

CA58507M1077

Other Specialty Retailers

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Jan. 24	MedMen Enterprises Brief: Furthermore, Michael Serruya, Executive Chairman, who has served on the Board since August 2021, has stepped down from the Board effective today	MT
Jan. 24	MedMen Enterprises Brief: Board has appointed Richard Ormond as Chief Restructuring Officer	MT

MEDMEN ENTERPRISES : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-K)

September 24, 2021 at 04:13 pm EDT

The following discussion should be read in conjunction with, and is qualified in
its entirety by, the Consolidated Financial Statements and the accompanying
notes presented in Item 15 of this Form 10-K. Except for historical information,
the discussion in this section contains forward-looking statements that involve
risks and uncertainties. Future results could differ materially from those
discussed below for many reasons, including the risks described in "Disclosure
Regarding Forward-Looking Statements," Item 1A-"Risk Factors" and elsewhere


in
this Form 10-K.



We are a smaller reporting company, as defined in Rule 12b-2 of the Exchange
Act. Accordingly, we have omitted certain information called for by this Item 7
as permitted by applicable scaled disclosure rules.



Basis of Presentation

All references to "$" and "dollars" refer to U.S. dollars. References to C$ refer to Canadian dollars. Certain totals, subtotals and percentages throughout this MD&A may not reconcile due to rounding.





Fiscal Period


The Company's fiscal year is a 52/53-week year ending on the last Saturday in
June. In a 52-week fiscal year, each of the Company's quarterly periods will
comprise 13 weeks. The additional week in a 53-week fiscal year is added to the
fourth quarter, making such quarter consist of 14 weeks. The Company's first
53-week fiscal year will occur in fiscal year 2024. The Company's fiscal years
ended June 26, 2021 and June 27, 2020 included 52 weeks.



The following table sets forth the Company's selected consolidated financial
data for the periods, and as of the dates, indicated. The Consolidated
Statements of Operations data for the fiscal years ended June 26, 2021 and June
27, 2020 have been derived from the audited Consolidated Financial Statements of
the Company and its subsidiaries, which are included in Item 15 of this Annual
Report on Form 10-K ("Form 10-K").



The data set forth below should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
("MD&A") and the Consolidated Financial Statements and the accompanying notes
presented in Item 15 of this Form 10-K. The Company's Consolidated Financial
Statements have been prepared in accordance with U.S. Generally Accepted
Accounting Principles ("GAAP") and on a going concern basis that contemplates
continuity of operations and realization of assets and liquidation of
liabilities in the ordinary course of business.



                                               Three Months Ended                Year Ended
                                            June 26,        June 27,       June 26,       June 27,
($ in Millions)                               2021            2020           2021           2020

Revenue                                    $     42.0      $     27.3     $    145.1     $    155.3
Gross Profit                               $     19.7      $     11.0     $     67.3     $     55.4
Loss from Operations                       $    (21.7 )    $   (265.6 )   $    (67.6 )   $   (432.3 )
Total Other Expense                        $     20.0      $     13.8     $     76.0     $     65.2


Net Loss from Continuing Operations        $    (41.4 )    $   (296.8 )   $   (145.4 )   $   (456.6 )
Net Loss from Discontinued Operations      $     (4.8 )    $    (21.0 )   $    (12.2 )   $    (69.9 )
Net Loss                                   $    (46.2 )    $   (317.8 )   $   (157.6 )   $   (526.5 )
Net Loss Attributable to Non-Controlling
Interest                                   $     (7.3 )    $   (161.0 )   $    (33.5 )   $   (279.3 )
Net Loss Attributable to Shareholders of
MedMen Enterprises Inc.                    $    (38.9 )    $   (156.8 )   $

(124.1 ) $ (247.2 )



Adjusted Net Loss from Continuing
Operations (Non-GAAP)                      $    (37.4 )    $   (118.9 )   $   (139.2 )   $   (199.5 )
EBITDA from Continuing Operations
(Non-GAAP)                                 $    (13.1 )    $   (249.3 )   $    (49.1 )   $   (418.7 )
Adjusted EBITDA from Continuing
Operations (Non-GAAP)                      $     (9.7 )    $    (22.7 )   $    (46.0 )   $   (112.7 )




                                       55





Fiscal Year 2021 Highlights

Continued Strategic Partnership with Gotham Green Partners


On April 23, 2019, the Company secured a senior secured convertible credit
facility (the "Convertible Facility") to provide up to $250,000,000 in gross
proceeds, arranged by Gotham Green Partners ("GGP"). The Convertible Facility
has been accessed to date through issuances to the lenders of convertible senior
secured notes ("GGP Notes") co-issued by the Company and MM Can USA, Inc. ("MM
CAN" or "MedMen Corp."). Refer to "Note 19 - Senior Secured Convertible Credit
Facility" of the consolidated financial statements in Item 15 for further
information. As of June 26, 2021, the Company has drawn down on a total of
$165,000,000 on the Convertible Facility, of which approximately $15,000,000 was
during the current fiscal year. The principal amount of the Convertible Facility
has been and is anticipated to be used for ongoing operations, capital
expenditures and other corporate purposes.



On July 2, 2020, the Company amended and restated the securities purchase
agreement under the Convertible Facility ("Fourth Amendment") wherein the
minimum liquidity covenant was waived until September 30, 2020 and resetting at
$5,000,000 thereafter with incremental increases on March 31, 2021 and December
31, 2021. The Fourth Amendment also released certain assets from its collateral
to allow greater flexibility to generate proceeds through the sale of non-core
assets. The payment-in-kind feature was extended whereby 100% of the cash
interest due prior to June 2021 will be paid-in-kind and 50% of the cash
interest due thereafter will be paid-in-kind. The amendment allowed for
immediate prepayment with a 5% penalty until the second anniversary of the
Fourth Amendment and a 3% penalty thereafter. In addition, the Fourth Amendment
provided the holders of the GGP Notes down-round protection. Refer to "Note 19 -
Senior Secured Convertible Credit Facility" of the consolidated financial
statements in Item 15 for further information. As consideration for the Fourth
Amendment, the conversion price for 52% of Tranches 1 through 3 and certain
amendment fee notes were amended to $0.34 per share, and an amendment fee of
$2,000,000 was paid through the issuance of additional notes at a conversion
price of $0.28 per share.



On September 14, 2020, the Company had drawn down $5,000,000 through Tranche
IA-2 of the Convertible Facility. In connection with the funding of Tranche
IA-2, the Company issued 25,000,000 warrants to the lenders at an exercise price
of $0.20 per share. In addition, 1,080,255 existing warrants were cancelled and
replaced with 16,875,001 warrants with an exercise price of $0.20 per share.
Pursuant to the terms of the Convertible Facility, the conversion price for 5.0%
of the existing GGP Notes outstanding prior to Tranche 4 and the Incremental
Advance, which was 5.0% of $170,729,923, was amended to $0.20 per share. In
connection with the incremental advance, the Company issued convertible notes as
consideration for a $468,564 fee with a conversion price of $0.20 per share.



On September 16, 2020 and September 28, 2020, the down round feature on the
convertible notes and warrants issued in connection with Tranche 4, Incremental
Advances and certain amendment fees was triggered wherein the exercise price was
adjusted to $0.17 and $0.15 per share, respectively. The value of the effect of
the down round feature on convertible notes and warrants was determined to be
$32,744,770 and $6,723,954, respectively, during the fiscal year ended June


26,
2021.

On November 1, 2020, the Company repaid $8,000,000 of borrowings under the Convertible Facility.





On January 11, 2021, the Company amended and restated the Convertible Facility
(the "Fifth Amendment") pursuant to which the Company received an additional
advance of $10,000,000 evidenced by the issuance of senior secured convertible
notes (the "Notes") with a conversion price of $0.16 per Class B Subordinate
Voting Share (a "Share"). In connection with the Fifth Restatement, the Company
paid a fee to the lenders of $937,127 evidenced by the issuance of senior
secured convertible notes with a conversion price of $0.16 per Share (the
"Restatement Fee Notes"). The Company also issued to the lenders 62,174,567
share purchase warrants exercisable for five years at a purchase price of $0.16
per Share (the "Warrants"). The Notes, Restatement Fee Notes and Warrants
include down round adjustment provisions, with certain exceptions, if the
Company issues securities at a lower price.



Pursuant to the terms of the Convertible Facility, of the $168,100,000 senior
secured convertible notes outstanding prior to Tranche 4 and the Incremental
Advances thereunder (including paid-in-kind interest accrued on such notes), the
conversion price of $47,100,000 of the notes was changed to $0.17 per Share, of
which $16,800,000 of the notes will continue to be subject to down round
adjustment provisions. In addition, the Company cancelled an aggregate of
2,160,507 warrants that were issued with such notes and, in exchange, issued
41,967,832 warrants with an exercise price of $0.16 per Subordinate Voting
Share.



The Convertible Facility was also amended to, among other things, modify the
minimum liquidity covenant, which extends the period during which it is waived
from December 31, 2020 to June 30, 2021, reset the minimum liquidity threshold
to $7,500,000 effective on July 1, 2021 through December 31, 2021, and
$15,000,000 thereafter, and waiver of the minimum liquidity covenant if the
Company is current on cash interest. Furthermore, covenants with regards to
non-operating leases, capital expenditures and corporate SG&A will now be tied
to a board of directors approved budget.



                                       56





On April 21, 2021, the Company cancelled existing warrants totaling 97,785,140
warrants issued to GGP following two consecutive quarters of positive retail
cash flow for the periods ended September 26, 2020 and December 26, 2020
pursuant to the Fifth Amendment. The following warrants were immediately and
automatically cancelled in the amounts of 32,451,923, 6,490,385, 16,875,000 and
41,967,832 which were exercisable at $0.26, $0.26, $0.20 and $0.16,
respectively.



On May 11, 2021, the Company entered into an agreement letter (the "Letter")
with GGP in which the Company received reprieve from certain potential
non-compliance with certain covenants under the Fifth Amendment dated January
11, 2021, such as potential non-compliance with certain reporting and notice
requirements, pay certain liabilities when due, deliver control agreements for
certain bank accounts, obtain consent from the lenders prior to hire certain
executives, obtain consent from the lenders for certain matters and related
items. No amounts were paid by the Company for the Letter.

Secured Term Loan Amendments





In October 2018, MedMen Corp. completed a $77,675,000 senior secured term loan
(the "2018 Term Loan") with funds managed by Hankey Capital, LLC and with an
affiliate of Stable Road Capital. On January 13, 2020, the 2018 Term Loan was
amended wherein the maturity date was extended to January 31, 2022 and the
interest rate was increased to a fixed rate of 15.5% per annum, of which 12.0%
will be payable monthly in cash based on the outstanding principal and 3.5% will
accrue monthly to the principal amount of the debt as a payment-in-kind. Certain
ownership interests of the Company's subsidiaries have been pledged as security
for the obligations under the 2018 Term Loan. Additionally, the Company
guaranteed the obligations of MedMen Corp. under the 2018 Term Loan. Refer to
"Note 18 - Notes Payable" of the consolidated financial statements in Item


15
for further information.


On July 2, 2020, the Company further amended the 2018 Term Loan wherein the
interest rate of 15.5% per annum will accrue monthly to the principal amount of
the debt as a payment-in-kind effective March 1, 2020 through July 2, 2021 and
thereafter until maturity on January 31, 2022, 7.75% interest per annum will be
payable monthly in cash and 7.75% interest per annum will be paid-in-kind.
Certain reporting and financial covenants were added and amended, and the
minimum liquidity covenant was waived until September 30, 2020. The Company may
request an increase to the 2018 Term Loan through December 31, 2020 to be funded
through incremental term loans. As consideration for the amendment, the Company
cancelled 20,227,863 existing warrants exercisable at $0.60 per share held by
the lenders of the 2018 Term Loan, and MM CAN issued 20,227,863 warrants at
$0.34 per share that are exercisable until July 2, 2025. The Company also
incurred an amendment fee of $834,000 that was added to the outstanding
principal balance.



On September 16, 2020, the Company executed an amendment to the 2018 Term Loan
in which the funds available under the facility was increased by $12,000,000
available through incremental term loans (the "2020 Term Loan"), of which
$5,700,000 was fully committed by the lenders through October 31, 2020. The
additional funds accrue interest at 18.0% per annum wherein 12.0% will be paid
in cash monthly in arrears and 6.0% per annum accrues monthly as
payment-in-kind. As consideration for the amendment, the Company cancelled
20,227,863 existing warrants held by the lenders exercisable at $0.60 per share,
and MM CAN issued 20,227,863 warrants exercisable at $0.34 per share until
September 16, 2025.



On September 16, 2020, the Company closed on an incremental term loan of
$3,000,000 under the 2020 Term Loan. In connection with the incremental term
loan, MM CAN issued 30,000,000 warrants with an exercise price of $0.20 per
share until December 31, 2025. The newly issued warrants may be exercised at the
election of their holders on a cashless basis.



On September 16, 2020 and September 28, 2020, the down round feature on the
warrants issued in connection with the incremental term loan of $3,000,000 on
September 16, 2020 was triggered wherein the exercise price was adjusted to
$0.17 and $0.15 per share, respectively. The value of the effect of the down
round feature was determined to be $405,480 during the fiscal year ended June
26, 2021.



On October 30, 2020, the Company closed on an incremental term loan of
$7,705,279 under the 2020 Term Loan. In connection with the incremental term
loan, MM CAN issued 77,052,790 warrants with an exercise price of $0.20 per
share until September 14, 2025. The newly issued warrants may be exercised at
the election of their holders on a cashless basis. As of June 26, 2021, the
Company has received total gross proceeds of $10,705,279 under the 2020 Term
Loan. The principal amount of the 2020 Term Loan has been and is anticipated to
be used for ongoing operations, capital expenditures and other corporate
purposes.



                                       57


On May 11, 2021, the Company executed an amendment to the secured term loan in
which certain covenants were added and amended. Specifically, the minimum
liquidity covenant was amended to which the covenant will not apply if the
Company pays and has paid the cash portion of interest accrued under the senior
secured term loan facility when such cash interest becomes due and payable. Such
covenant will continue to be applied in the event the Company has failed to make
payments. The minimum liquidity balance was not amended. In addition,
application of payments was added wherein proceeds from the sale of the New York
disposal group shall be applied to the amended and restated Facility on July 2,
2020 in the principal amount of $83,123,291. As consideration for the amendment,
the Company incurred a modification fee of $1,000,000 which will be due on the
earliest of (a) receipt of Level-Up proceeds, (b) the date of the Investment
Agreement Ascend Wellness Holdings, LLC, and (c) the earlier of January 31,
2022. Cash fees paid to the Lender in connection with the amendment totaled
$225,035.

Unsecured Convertible Facility





On September 16, 2020, the Company entered into an unsecured convertible
debenture facility (the "Unsecured Convertible Facility") for total available
proceeds of $10,000,000 wherein the convertible debentures will have a
conversion price equal to the closing price on the trading day immediately prior
to the closing date, a maturity date of 24 months from the date of issuance and
will bear interest at a rate of 7.5% per annum payable semi-annually in cash.
The unsecured facility is callable in additional tranches in the amount of
$1,000,000 each, up to a maximum of $10,000,000 under all tranches. The timing
of additional tranches can be accelerated based on certain conditions. The
debentures provide for the automatic conversion into Subordinate Voting Shares
in the event that the VWAP is 50% above the conversion price on the CSE for 45
consecutive trading days. The principal amounts funded under the Unsecured
Convertible Facility has been and is anticipated to be used for ongoing
operations, capital expenditures and other corporate purposes.



On September 16, 2020, the Company closed on an initial $1,000,000 under the
facility with a conversion price of $0.17 per Subordinate Voting Share. In
connection with the initial tranche, the Company issued 3,293,413 warrants with
an exercise price of $0.21 per share. On September 28, 2020, the Company closed
on a second tranche of $1,000,000 under the facility with a conversion price of
$0.15 per Subordinate Voting Share. In connection with the second tranche, the
Company issued 3,777,475 warrants for an equal number of Shares with an exercise
price of $0.17 per share. On November 20, 2020, the Company closed on a third
tranche of $1,000,000 under the facility with a conversion price of $0.15 per
Subordinate Voting Share. In connection with the third tranche, the Company
issued 3,592,425 warrants for an equal number of Shares with an exercise price
of $0.17 per share. On December 17, 2020, the Company closed on a fourth tranche
of $1,000,000 under the facility with a conversion price of $0.15 per
Subordinate Voting Share. In connection with the fourth tranche, the Company
issued 3,597,100 warrants for an equal number of Shares with an exercise price
of $0.18 per share. On January 29, 2021, the Company closed on a fifth tranche
of $1,000,000 under the facility with a conversion price of $0.16 per
Subordinate Voting Share. In connection with the fifth tranche, the Company
issued 3,355,000 warrants with an exercise price of $0.19 per share. As of June
26, 2021, the Company has received total gross proceeds of $5,000,000 under the
Unsecured Convertible Facility.



On June 14, 2021, a portion of the Unsecured Convertible Facility was
automatically converted into 16,014,663 Class B Subordinate Voting Shares in the
amount of $2,371,782. In addition, 8,807,605 of the outstanding warrants issued
in connection with the facility were exercised at varying prices for gross


proceeds of $1,622,377.



Private Placements


On February 16, 2021, the Company entered into subscription agreements with
institutional investors for the sale of $2,866,000 in units at a purchase price
of $0.37 per unit. Each unit consists of one Class B Subordinate Voting Share of
the Company and one warrant. Each warrant is exercisable for a period of five
years to purchase one share at an exercise price of $0.46 per share, subject to
the terms and conditions set forth in the warrant. The proceeds have been and is
anticipated to be used for ongoing operations and general corporate purposes.



On March 18, 2021, the Company issued 50,000,000 units to an institutional
investor at a purchase price of C$0.40 per unit for an aggregate of
C$20,000,000. Each unit consisted of one Class B Subordinate Voting Share and
one share purchase warrant. Each warrant permits the holder to purchase one
share for a period of three years from the date of issuance at an exercise price
of C$0.50 per share, subject to the terms and conditions set forth in the
warrant. The proceeds have been and will be used to: (i) support MedMen's
Florida strategic growth plan, and (ii) fund certain costs related to opening
locations in Massachusetts, Illinois and California, and (iii) for general
corporate purposes.



On May 17, 2021, the Company entered into a non-brokered private placement for
the sale of $10,000,000 units at a purchase price of $0.32 per unit. Each unit
consists of one Class B Subordinate Voting Share of the Company and one warrant.
Each warrant is exercisable for a period of three years to purchase one share at
an exercise price of $0.35 per share. The proceeds have been and will be used
for capital expenditures for new store openings in the Company's Fenway location
in Boston, Massachusetts and two retail locations in San Francisco, California.



                                       58

Landlord Support for Company Turnaround





The Company currently has lease arrangements with affiliates of Treehouse Real
Estate Investment Trust (the "REIT"), which include 14 retail and cultivation
properties across the U.S. On July 3, 2020, the Company announced modifications
to its existing lease arrangements with the REIT, in which the REIT agreed to
defer a portion of total current monthly base rent for the 36-month period
between July 1, 2020 and July 1, 2023. The total amount of all deferred rent
accrues interest at 8.6% per annum during the deferral period. As consideration
for the rent deferral, the Company issued 3,500,000 warrants to the REIT, each
exercisable at $0.34 per share for a period of five years. As part of the
agreement, the Company will pursue a partnership with a cannabis cultivation
company for the Company's Desert Hot Springs and Mustang facilities that are
leased from the REIT in order to continue the Company's focus on retail
operations.



Discontinued Operations


On November 15, 2019, the Company announced its plan to sell its operations in
the state of Arizona and accordingly, classified all assets and liabilities
within the state of Arizona as held for sale and all profits and losses related
to its Arizona operations as discontinued operations. On November 5, 2020, the
Company sold and transferred 100% of the outstanding membership interests in
Kannaboost Technology Inc. and CSI Solutions LLC (collectively referred to as
"Level Up") for a total sales price of $25,150,000, of which the Company has not
received any cash proceeds as of June 26, 2021. As of November 2020, Level Up
was fully deconsolidated by the Company and all profits and losses related to
Level Up are presented as discontinued operations for all periods presented.



During the fiscal fourth quarter of 2021, the Company had a change in plan of
sale for the remaining Arizona entities and determined that it will continue to
build on its success at its retail location in Scottsdale, Arizona and in its
wholesale operations through its cultivation and manufacturing facility in Mesa,
Arizona. Accordingly, the Company reclassified the assets and liabilities
allocable to the remaining Arizona entities as held and used for all periods
presented. As the Company's operations in the state of Arizona no longer met the
criteria for discontinued operations, all profits and losses related to the
remaining Arizona entities were reclassified as continuing operations for all
periods presented. Refer to "Note 28 - Discontinued Operations" of the
consolidated financial statements for the year ended June 26, 2021 and June 27,
2020 included in Item 15 of this Form 10-K for further information.



On February 25, 2021, MedMen NY, Inc. ("MMNY") and its parent, MM Enterprises
USA, LLC ("MM Enterprises USA"), entered into an investment agreement (the
"Investment Agreement") with Ascend Wellness Holdings, LLC ("AWH NY"), and
Ascend Wellness Holdings, LLC ("AWH") whereby, subject to approval from the New
York State Department of Health and other applicable regulatory bodies, AWH
agreed to purchase shares of common stock of MMNY for an aggregate purchase
price of up to $73,000,000 million as follows: (a) $35,000,000 million in cash
to be invested in MMNY (as may be adjusted in accordance with the Investment
Agreement), (b) AWH NY will issue a senior secured promissory note with a
principal amount of $28,000,000 million, guaranteed by AWH, (c) and within five
business days after the first sale by MMNY of adult use cannabis products at one
or more of its retail store locations, AWH will purchase additional shares of
MMNY for $10,000,000 million in cash, which cash investments and note will be
used to repay a portion of the Secured Term Loan. As of June 26, 2021, the
initial closing of the investment has not occurred and is expected to close
within the next twelve months.



As a result, assets and liabilities allocable to the operations within the state
of New York were classified as held for sale in the Consolidated Balance Sheets
for all periods presented. In addition, revenue and expenses, gains or losses
relating to the discontinuation of New York operations were classified as
discontinued operations and were eliminated from profit or loss from the
Company's continuing operations for all periods presented. Discontinued
operations are presented separately from continuing operations in the
Consolidated Statements of Operations and the Consolidated Statements of Cash
Flows.



                                       59





Assets Held for Sale


On July 1, 2020, the Company entered into definite agreements for the sale of a
cannabis retail license located in Evanston, Illinois for a total sales price of
$20,000,000, of which $18,000,000 was received in cash and $2,000,000 in the
form of a secured promissory note payable three months following the Closing
Date in exchange for all of the Company's membership interests in Evanston. As
of March 12, 2021 ("Amendment Date"), the secured promissory note was amended to
waive any default arising from non-payment of principal and interest prior to
the Amendment Date if Purchaser pays principal of $1,000,000 and all accrued
interest of 2% per annum through the Amendment Date. Interest will accrue at 9%
per annum following the Amendment Date. As of June 26, 2021, the Company
received cash payment in accordance with the amended secured promissory note.
Transfer of the cannabis license is pending regulatory approval as of the filing
of this Form 10-K. On August 10, 2020, the Company transferred governance and
control of MME Evanston Retail, LLC through a consulting agreement. All assets
and liabilities related to Evanston are excluded from the Company's Consolidated
Balance Sheets as of June 26, 2021 and all profits or losses from the Evanston
operations subsequent to August 10, 2020 are excluded from the Consolidated
Statements of Operations.



On June 26, 2020, the Company entered into a non-binding term sheet for the
retail location located in Seaside, California for an aggregate sales price of
$1,500,000 wherein $750,000 is to be paid upon the date of close in addition to
$750,000 paid in equal monthly installments over twelve months through a
promissory note. The Company transferred all outstanding membership interests in
PHSL, LLC ("Seaside") in October 2020. All assets and liabilities related to
Seaside are excluded from the Consolidated Balance Sheets as of June 26, 2021
and all profits or losses from the Seaside location subsequent to October 9,
2020 are excluded from the Consolidated Statements of Operations.



In December 2020, the Company entered into a purchase agreement to sell a
non-operational cannabis license in Grover Beach, California for a total
consideration of $3,750,000 of which $3,500,000 will be received in cash and
$250,000 will be received in equity consideration. All assets and liabilities
related to Grover Beach are excluded from the Consolidated Balance Sheets as of
June 26, 2021 and all profits or losses from this subsidiary subsequent to March
5, 2021 are excluded from the Consolidated Statements of Operations.

Management Changes and Shareholder Meeting Results





On November 11, 2020, the Company held an annual general meeting of shareholders
at which the number of Board of Directors (the "Board") of the Company was set
to seven, subject to permitted increases. Benjamin Rose, Niki Christoff, Mel
Elias, Al Harrington, Tom Lynch, Errol Schweizer and Cameron Smith were elected
as members of the Board of Directors of the Company until the next annual
general meeting of shareholders.



On December 3, 2020, the Company named Tracy McCourt to the Company's new role
of Chief Revenue Officer who will lead the omni-channel marketing strategy as
well as the Company's buying, merchandising and business intelligence efforts.

On December 16, 2020, the Company announced that Benjamin Rose resigned as Chairman of the Board of Directors and as a Board member. Tom Lynch, the Company's interim Chief Executive Officer, was elected as Chairman of the Board of Directors.


On December 18, 2020, the Company announced that Zeeshan Hyder resigned as Chief
Financial Officer and Reece Fulgham, managing director at SierraConstellation
Partners LLC ("SCP"), was appointed to the role of Chief Financial Officer.

Cancellation of Super Voting Shares





On December 24, 2020, the Company announced the cancellation of 815,295 Class A
Super Voting Shares which had been held by Andrew Modlin and granted via proxy
to Benjamin Rose since December 2019. Effective as of December 10, 2020, the
Company has only one class of outstanding shares, the Class B Subordinate Voting
Shares as a result of the share cancellation.



COVID-19 Pandemic



In March 2020, the World Health Organization declared COVID-19 a global
pandemic. Despite being deemed as an essential retailer in its core markets, the
Company has experienced a negative impact on sales in certain markets as a
result of shelter-at-home orders, social distancing efforts, restrictions on the
maximum allowable number of people within a retail establishment and declining
tourism. Although the Company permanently closed one store as a result of
COVID-19, certain markets, such as California and Nevada, experienced a greater
impact on sales due to reduced store hours and foot traffic in certain
locations, as well as limits on the number of customers that may be in a store
at any one time. Other markets, such as Illinois, Florida and New York have not
been significantly impacted by COVID-19 and in some cases, stores in those
markets have generated increased sales. Due to its strong vendor partnerships in
each market, the Company has not experienced a significant impact to its supply
chain in each market. At this time, it is unclear how long these measures may
remain in place, what additional measures may be imposed, or when our operations
will be restored to the levels that existed prior to the COVID-19 pandemic.

Factors Affecting Performance





Company management believes that the nascent cannabis industry represents an
extraordinary opportunity in which the Company's performance and success depend
on a number of factors:

? Market Expansion. The Company's success in achieving a desirable retail

footprint is attributable to its market expansion strategy, which was a key

driver of revenue growth. The Company exercises discretion in focusing on

investing in retail locations that can deliver near term increased earnings to


   the Company.

? Retail Growth. MedMen stores are located in premium locations in markets such

as California, Nevada, Arizona, Illinois and Florida. As it continues to

increase sales, the Company expects to leverage its retail footprint to develop

a robust distribution model.

? Direct-to-Consumer Channel Rollout. MedMen Delivery is available in California.

The Company benefited from increased traction with in-store pickup as well as

delivery service, curbside pickup and loyalty rewards program.

? COVID-19. On March 11, 2020, the World Health Organization declared COVID-19 a

global pandemic and recommended containment and mitigation measures worldwide.

While the ultimate severity of the outbreak and its impact on the economic

environment is uncertain, the Company is monitoring this closely. The Company's

business depends on the uninterrupted operation of its stores and facilities.

In the event that the Company were to experience widespread transmission of the

virus at one or more of the Company's stores or other facilities, the Company

could suffer reputational harm or other potential liability. To date, the

Company has generally implemented certain safety measures to ensure the safety

of its customers and associates, which may have the effect of discouraging

shopping or limiting the occupancy of our stores. These measures, and any

additional measures that have been and may continue to be taken in response to

the COVID-19 pandemic, have substantially decreased and may continue to

decrease, the number of customers that visit our stores which has had, and will

likely continue to have a material adverse effect on our business, financial

condition and results of operations. The ultimate magnitude of COVID-19,

including the extent of its overall impact on our financial and operational

results cannot be reasonably estimated at this time; however, the Company has

experienced significant declines in sales. The overall impact will depend on

the length of time that the pandemic continues, the extent to which it affects

our ability to raise capital, and the effect of governmental regulations

imposed in response to the pandemic as well as uncertainty regarding all of the

foregoing. At this time, it is unclear how long these measures may remain in

place, what additional measures maybe imposed, or when our operations will be


   restored to the levels that existed prior to the COVID-19 pandemic.




Trends



MedMen is subject to various trends that could have a material impact on the
Company, its financial performance and condition, and its future outlook. A
deviation from expectations for these trends could cause actual results to
differ materially from those expressed or implied in forward-looking information
included in this MD&A and the Company's financial statements. These trends
include, but are not limited to, the following:

? Liberalization of Cannabis Laws. The Company is reliant on the existing legal

and regulatory administration as to the sale and consumption of cannabis in the

states in which the Company operates not being repealed or overturned and on

the current approach to enforcement of federal laws by the federal government.

The Company is also reliant on the continuation of the trend toward increased

liberalization of cannabis laws throughout the United States, including the

adoption of medical cannabis regulations in states without cannabis programs

and the conversion of medical cannabis laws to recreational cannabis laws in

states with medical cannabis programs. Although the Company is focused on

California, Nevada, Arizona, Illinois and Florida, this trend provides MedMen

with new opportunities to deploy capital and expand geographically. The

opportunity for geographic expansion is important because some jurisdictions

with existing cannabis programs limit the number of retail locations that can

be owned by a single entity.

? Popular Support for Cannabis Legalization. The Company is reliant on the

continuation of the trend toward increased popular support and acceptance of

cannabis legalization. This trend could change if there is new research

conducted that challenges the health benefits of cannabis or that calls into

question its safety or efficacy or significant product recalls or broad-based

deleterious health effects. This trend could also be influenced by a shift in

the political climate, or by a decision of the United States government to

enforce federal laws that make cannabis illegal. Such a change in popular

support could undermine the trend toward cannabis legalization and possibly

lead states with existing cannabis programs to roll them back, either of which

would negatively impact the Company's growth plans.

? Balanced Supply and Demand in States. The Company is reliant on the maintenance

of a balance between supply and demand in the various states in which it

operates cannabis retail stores. Federal law provides that cannabis and

cannabis products may not be transported across state lines in the United

States. As a result, all cannabis consumed in a state must be grown and

produced in that same state. This dynamic could make it more difficult, in the

short term, to maintain a balance between supply and demand. If excess

cultivation and production capacity is created in any given state and this is

not matched by increased demand in that state, then this could exert downward

pressure on the retail price for products. A substantial increase in retail

licenses offered by state authorities in any given state could result in

increased competition and exert downward pressure on the retail pricing. If

cultivation and production in a state fails to match demand, there could be

insufficient supply of product in a state to meet demand, causing retail

revenue in that state to fall or stagnate, including due to retail locations


   closing while supply is increased.

Components of Results of Operations





Revenue



For the fiscal year ended June 26, 2021, the Company derives the majority of its
revenue from direct sales to customers in its retail stores. Approximately 61%
of revenue was generated from operations in California, with the remaining 39%
from operations in Arizona, Nevada, Illinois and Florida. Revenue through retail
stores is recognized upon delivery of the goods to the customer and when
collection is reasonably assured, net of an estimated allowance for sales
returns.

Cost of Goods Sold and Gross Profit





Gross profit is revenue less cost of goods sold. Cost of goods sold includes the
costs directly attributable to product sales and includes amounts paid for
finished goods, such as flower, edibles and concentrates, packaging and other
supplies, fees for services and processing, and allocated overhead, such as
allocations of rent, administrative salaries, utilities and related costs.
Cannabis costs are affected by various state regulations that limit the sourcing
and procurement of cannabis product, which may create fluctuations in gross
profit over comparative periods as the regulatory environment changes. Gross
margin measures gross profit as a percentage of revenue.



Expenses



General and administrative expenses represent costs incurred in MedMen's
corporate offices, primarily related to personnel costs, including salaries,
incentive compensation, benefits, share-based compensation and professional
service costs, including legal and accounting. Sales and marketing expenses
consist of selling costs to support customer relationships and to deliver
product to retail stores. It also includes an investment in marketing and brand
activities and the corporate infrastructure required to support the ongoing
business. Depreciation and amortization expenses represent the portion of the
Company's definite-lived property, plant and equipment and intangible assets
that is being used up during the reporting period. Changes in fair value of
contingent consideration expense represent the realized gain or loss upon the
settlement of contingent liabilities related to the Company's business
acquisitions and the unrealized gain or loss on the changes in fair value of
such outstanding liabilities upon remeasurement at each reporting period.
Impairment expense represents the permanent reduction of an assets carrying
value down to fair value and may include inventory, property, plant, and
equipment, intangible assets, goodwill and other assets. Other operating income
and expenses consist of the gain or loss on disposal of assets from assets held
for sale and discontinued operations, restructuring fees or reorganization
expenses, gain or loss on settlement of accounts payable, and gain on lease


terminations.



Income Taxes

MedMen is subject to income taxes in the jurisdictions in which it operates and,
consequently, income tax expense is a function of the allocation of taxable
income by jurisdiction and the various activities that impact the timing of
taxable events. As the Company operates in the legal cannabis industry, the
Company is subject to the limits of Internal Revenue Code ("IRC") Section 280E
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 and a
higher effective tax rate than most industries. 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.



                                       62

Year Ended June 26, 2021 Compared to Year Ended June 27, 2020





                                                  Year Ended
                                            June 26,       June 27,
($ in Millions)                               2021           2020         $ Change       % Change

Revenue                                    $    145.1     $    155.3     $    (10.2 )           (7 )%
Cost of Goods Sold                               77.8           99.9          (22.1 )          (22 )%

Gross Profit                                     67.3           55.4           11.9             21 %

Expenses:
General and Administrative                      124.6          192.7          (68.1 )          (35 )%
Sales and Marketing                               1.1           10.7           (9.6 )          (90 )%
Depreciation and Amortization                    31.1           37.7           (6.6 )          (18 )%
Realized and Unrealized Changes in Fair
Value of Contingent Consideration                 0.4            9.0


   (8.6 )          (96 )%
Impairment Expense                                2.4          246.7         (244.3 )          (99 )%
Other Operating Income                          (24.7 )         (9.1 )        (15.6 )          171 %

Total Expenses                                  134.9          487.7         (352.8 )          (72 )%

Loss from Operations                            (67.6 )       (432.3 )        364.7            (84 )%

Other Expense (Income):
Interest Expense                                 36.6           34.2            2.4              7 %
Interest Income                                  (0.6 )         (0.8 )          0.2            (25 )%
Amortization of Debt Discount and Loan
Origination Fees                                 24.8            4.7           20.1            428 %
Change in Fair Value of Derivatives              (0.9 )         (8.8 )          7.9            (90 )%
Realized and Unrealized Gain on
Investments and Other Assets                        -           (7.9 )          7.9           (100 )%
Loss on Extinguishment of Debt                   16.1           43.8


  (27.7 )          (63 )%

Total Other Expense                              76.0           65.2           10.8             17 %

Loss from Continuing Operations Before
Provision for Income Taxes                     (143.6 )       (497.5 )        353.9            (71 )%
Provision for Income Tax (Expense)
Benefit                                          (1.8 )         40.9

(42.7 ) (104 )%


Net Loss from Continuing Operations            (145.4 )       (456.6 )        311.2            (68 )%
Net Loss from Discontinued Operations,
Net of Taxes                                    (12.2 )        (69.9 )         57.7            (83 )%

Net Loss                                       (157.6 )       (526.5 )        368.9            (70 )%

Net Loss Attributable to Non-Controlling
Interest                                        (33.5 )       (279.3 )        245.8            (88 )%

Net Loss Attributable to Shareholders of
MedMen Enterprises Inc.                    $   (124.1 )   $   (247.2 )   $    123.1            (50 )%

Adjusted Net Loss from Continuing
Operations (Non-GAAP)                      $   (139.2 )   $   (199.5 )   $     60.3            (30 )%
EBITDA from Continuing Operations
(Non-GAAP)                                 $    (49.1 )   $   (418.7 )   $    369.6            (88 )%
Adjusted EBITDA from Continuing
Operations (Non-GAAP)                      $    (46.0 )   $   (112.7 )   $     66.7            (59 )%




Revenue


Revenue for the year ended June 26, 2021 was $145.1 million, a decrease of $10.2
million, or 7%, compared to revenue of $155.3 million for the year ended June
27, 2020. The decrease in revenue was primarily due to the impact of COVID-19 on
overall retail traffic and tourism as further discussed below. During the fiscal
year ended June 26, 2021, MedMen had 26 active retail locations in the states of
California, New York, Nevada, Arizona, Illinois and Florida, of which four
retail locations located within the state of New York were classified as
discontinued operations, compared to 26 active retail locations for the same
period in the prior year. Since June 27, 2020, the Company opened their Fort
Lauderdale and Miami locations in Florida as well as their Emeryville location
in California and temporarily closed five retail locations in the state of
Florida to redirect inventory from its Eustis facility to its highest performing
stores. The Company also divested three retail locations in Illinois and Arizona
since June 27, 2020 to raise non-dilutive financing through the sale of non-core
assets. During the year ended June 26, 2021, the Company contemplated the sale
of four retail stores in New York and entered into a definitive investment
agreement to sell a controlling interest, subject to regulatory approval. As of
June 26, 2021, the Company had 22 active retail locations related to continuing
operations.



                                       63


The decrease in revenue was primarily related to the overall impact of the
COVID-19 pandemic which affected the Company's operations for the majority of
the current fiscal year compared to the latter four months of the prior fiscal
year. The Company experienced decreased sales in certain locations within
California due to reduced foot traffic as a result of business and occupancy
restrictions and a slowdown in tourism. Retail revenue for the year ended June
26, 2021 in California decreased $21.6 million compared to the year ended June
27, 2020. In Florida and Illinois, revenues have not been significantly impacted
by COVID-19 with retail locations in those markets having increased sales by
$5.9 million and $4.2 million, respectively, during the year ended June 26,
2021. During the year ended June 26, 2021, the Company continues to enhance its
retail experience through better product assortment, customer service and
purchasing options with an emphasis on curbside pickup and delivery in response
to the COVID-19 pandemic. For the majority of the fiscal year ended June 26,
2021, the Company maintained modified store operations based on Centers for
Disease Control and Prevention guidelines and local ordinances which limit
in-store traffic for certain locations and consequently increased focus on
direct-to-consumer delivery, including curbside pickup. MedMen expects to
continue offering a variety of purchasing options for its customers to navigate
through the COVID-19 pandemic, which is expected to increase revenues in the
coming periods.

Cost of Goods Sold and Gross Profit





Cost of goods sold for the fiscal year ended June 26, 2021 was $77.8 million, a
decrease of $22.1 million, or 22%, compared with $99.9 million of cost of goods
sold for fiscal year ended June 27, 2020. The decrease in cost of goods sold is
primarily driven by the decrease in cultivation and manufacturing facilities.
For the year ended June 26, 2021, the Company had 26 active retail locations in
the states of California, New York, Nevada, Arizona, Illinois and Florida, of
which four retail locations located within the state of New York were classified
as discontinued operations, compared to 26 active retail locations for the same
period in the prior year. Gross profit for the year ended June 26, 2021 was
$67.3 million, representing a gross margin of 46%, compared with gross profit of
$55.4 million, representing a gross margin of 36%, for the year ended June 27,
2020. The increase in gross margin is primarily due to the Company's focus on
retail profitability and improvements in its supply chain and cultivation
facilities. During the year ended June 26, 2021, the Company strategically
closed five retail locations in Florida to provide better and consistent supply
for its patients. While these dispensaries remain temporarily closed as of June
26, 2021, the Company saw improved plant yields and quality driving improved
margins. For the year ended June 26, 2021, MedMen operated five cultivation and
production facilities, of which one facility located in New York was classified
as discontinued operations, compared to six facilities in the comparative prior
period. In November 2020, the Company completed the sale of one facility in
Arizona (Tempe) as a result of the Company's plan to divest non-core assets.
During the year ended June 26, 2021, the Company also reduced the cash burn
associated with cultivation and manufacturing operations in California and
Nevada and continues to evaluate strategic partnerships for these facilities.
MedMen expects margins to improve in the coming periods as the Company
restructures certain operations and divests licenses in non-core markets.



Total Expenses


Total expenses for the fiscal year ended June 26, 2021 were $134.9 million, a
decrease of $352.8 million, or 72%, compared to total expenses of $487.7 million
for the fiscal year ended June 27, 2020, which represents 93% of revenue for the
fiscal year ended June 26, 2021 compared to 314% of revenue for the fiscal year
ended June 27, 2020. The decrease in total expenses was attributable to the
factors described below.



General and administrative expenses for the year ended June 26, 2021 and June
27, 2020 were $124.6 million and $192.7 million, respectively, a decrease of
$68.1 million, or 35%. General and administrative expenses have decreased
primarily due to the Company's focus on right-sizing its corporate
infrastructure by reducing company-wide SG&A while improving efficiency. Key
drivers of the decrease in general and administrative expenses include overall
corporate cost savings, strategic headcount reductions across various
departments, and elimination of non-core functions and overhead in several
departments. The decrease of $68.1 million compared to the year ended June 27,
2020 was primarily related to a decrease in payroll and payroll related expenses
of $29.4 million, a decrease of $5.5 million in licenses, fees and taxes, a
decrease in professional fees of $3.9 million and a decrease in stock
compensation expense of $6.8 million.



Sales and marketing expenses for the year ended June 26, 2021 and June 27, 2020
were $1.1 million and $10.7 million, respectively, a decrease of $9.6 million,
or 90%. The decrease in sales and marketing expenses is primarily attributed to
the reduction in marketing and sales related spending due to the implementation
of the Company's cost-cutting strategy. During the current fiscal year, the
Company maintained its focus on budget allocation to marketing and redefined its
marketing initiatives to target its changing customer base. The Company shifted
its approach from third-party listing services to integration efforts with its
point-of-sale systems to increase awareness in local customers and improve the
customer experience while providing higher returns. Traditional and digital paid
media marketing campaign of $7.2 million in the comparative prior period was
reduced to $0.1 million during the year ended June 26, 2021.



                                       64


Depreciation and amortization for the year ended June 26, 2021 and June 27, 2020
was $31.1 million and $37.7 million, respectively, a decrease of $6.6 million,
or 18%. The decrease is attributable to the reduction in capital expenditures
through a slow-down in new store buildouts of the Company's operations through
acquisitions and a delay of capital-intensive projects during the current fiscal
year as a result of the COVID-19 pandemic and the Company's turnaround plan.



Realized and unrealized changes in fair value of contingent consideration for
the year ended June 26, 2021 and June 27, 2020 was a loss of $0.4 million and
$9.0 million, respectively, a decrease of $8.6 million, or 96%. The contingent
consideration is related to an acquisition of a California dispensary license
during the year ended June 27, 2020 wherein the expiration of the lock-up period
occurred during the fiscal second quarter of 2021.



Impairment expense for the year ended June 26, 2021 and June 27, 2020 was $2.4
million and $246.7 million, respectively, a decrease of $244.3 million, or 99%.
During the year ended June 26, 2021, the Company recorded impairment on an
intellectual property asset in the amount of $1.6 million. During the
comparative period, the Company recognized an impairment expense of $143.0
million on property and equipment, $39.0 million on intangible assets, $33.5
million on goodwill, $19.8 million on operating lease right-of-use assets, $5.9
million on other assets, and $5.6 million on assets held for sale.



Other operating income for the year ended June 26, 2021 and June 27, 2020 was
$24.7 million and $9.1 million, respectively, an increase of $15.6 million, or
171%. The change was primarily attributable to the $16.3 million gain related to
the lease deferral with the REIT during the fiscal first quarter of 2021 as the
decrease in present value of lease payments was greater than the remaining net
asset balance of finance lease assets. The Company also recognized a $2.9
million gain on lease terminations in Florida and Illinois during the fiscal
second quarter of 2021. Such gains were offset by restructuring fees of $5.0
million during the year ended June 26, 2021.



Total Other Expense



Total other expense for the fiscal year ended June 26, 2021 was $76.0 million,
an increase of $10.8 million compared to total other expense of $65.2 million,
or 17%, for the fiscal year ended June 27, 2020. The increase in total other
expense was primarily a result of the decrease of loss on extinguishment of debt
which totaled $43.8 million during the year ended June 27, 2020 primarily
related to the First and Third Amendment of the Convertible Facility, compared
to a net loss on extinguishment of debt of $16.1 million during the current
period of which $10.1 million was due to the Fourth Amendment of the Convertible
Facility and $4.0 million was related to a commitment to issue warrants in
connection with the Unsecured Convertible Facility. This decrease was offset by
an increase of amortization of debt discount of $20.1 million compared to the
year ended June 27, 2020 as a result of the Company's higher debt balance.
During the current period, proceeds from issuances of the Convertible Facility
totaled $14.6 million and proceeds from issuances of notes payable, including
the 2020 Term Loan and the Unsecured Convertible Facility, totaled $15.8
million. Additionally, the Company saw a $7.9 million decrease in gains on
investments and other assets and a $7.9 million decrease in changes in fair
value of derivatives which are based on the closing price of the Company's
warrants related to bought deals traded on the Canadian Securities Exchange
under the ticker symbol "MMEN.WT" which have stabilized during the year ended
June 26, 2021, compared to the same period prior.

Provision for Income Taxes





The provision for income tax expense for the fiscal year ended June 26, 2021 was
$1.8 million compared to the provision benefit for income tax benefit of $40.9
million for the year ended June 27, 2020, primarily due to the Company reporting
increased expenses subject to IRC Section 280E relative to pre-tax book loss.
The Company incurred a large amount of expenses that were not deductible due to
IRC Section 280E limitations which resulted in income tax expense being incurred
while there were pre-tax losses for the year ended June 26, 2021.



Net Loss



Net loss from continuing operations for the year ended June 26, 2021 was $145.4
million, a decrease of $311.2 million, or 68%, compared to a net loss from
continuing operations of $456.6 million for the year ended June 27, 2020. The
decrease in net loss from continuing operations was mainly attributable to the
decrease impairment expense recognized during the current fiscal year and the
decrease in general and administrative expenses and sales and marketing expenses
as a direct result of the Company's turnaround plan which includes efforts to
optimize SG&A and right-size the Company's corporate infrastructure. Net loss
attributable to non-controlling interest for the year ended June 26, 2021 was
$33.5 million, resulting in net loss of $124.1 million attributable to the
shareholders of MedMen Enterprises Inc. compared to $247.2 million for the


year
ended June 27, 2020.



                                       65





Three Months Ended June 26, 2021 Compared to Three Months Ended June 27, 2020



                                               Three Months Ended
                                            June 26,        June 27,
($ in Millions)                               2021            2020         $ Change       % Change

Revenue                                    $     42.0      $     27.3     $     14.7             54 %
Cost of Goods Sold                               22.3            16.3            6.0             37 %

Gross Profit                                     19.7            11.0            8.7             79 %

Expenses:
General and Administrative                       32.9            38.6           (5.7 )          (15 )%
Sales and Marketing                               0.6             0.2            0.4            200 %
Depreciation and Amortization                     6.1            15.0           (8.9 )          (59 )%
Realized and Unrealized Changes in Fair
Value of Contingent Consideration                   -             0.5           (0.5 )         (100 )%
Impairment Expense                                  -           229.8         (229.8 )         (100 )%
Other Operating Expense (Income)                  1.8            (7.5 )


     9.3           (124 )%

Total Expenses                                   41.4           276.6         (235.2 )          (85 )%

Loss from Operations                            (21.7 )        (265.6 )        243.9            (92 )%

Other Expense (Income):
Interest Expense                                 10.0            12.9           (2.9 )          (22 )%
Interest Income                                     -               -              -              -
Amortization of Debt Discount and Loan
Origination Fees                                 10.2             1.4            8.8            629 %
Change in Fair Value of Derivatives               1.2            (0.7 )          1.9           (271 )%
Realized and Unrealized Loss on
Investments and Other Assets                        -             0.2           (0.2 )         (100 )%
Gain on Extinguishment of Debt                   (1.4 )             -           (1.4 )            -
Total Other Expense                              20.0            13.8            6.2             45 %

Loss from Continuing Operations Before
Provision for Income Taxes                      (41.7 )        (279.4 )        237.7            (85 )%
Provision for Income Tax (Expense)
Benefit                                           0.3           (17.4 )         17.7           (102 )%

Net Loss from Continuing Operations             (41.4 )        (296.8 )        255.4            (86 )%
Net Income from Discontinued Operations,
Net of Taxes                                     (4.8 )         (21.0 )         16.2            (77 )%

Net Loss                                        (46.2 )        (317.8 )        271.6            (85 )%

Net Loss Attributable to Non-Controlling
Interest                                         (7.3 )        (161.0 )        153.7            (95 )%

Net Loss Attributable to Shareholders of
MedMen Enterprises Inc.                    $    (38.9 )    $   (156.8 )   $    117.9            (75 )%

Adjusted Net Loss from Continuing
Operations (Non-GAAP)                      $    (37.4 )    $   (118.9 )   $     81.5            (69 )%
EBITDA from Continuing Operations
(Non-GAAP)                                 $    (13.1 )    $   (249.3 )   $    236.2            (95 )%
Adjusted EBITDA from Continuing
Operations (Non-GAAP)                      $     (9.7 )    $    (22.7 )   $     13.0            (57 )%




Revenue



Revenue for the three months ended June 26, 2021 was $42.0 million, an increase
of $14.7 million, or 54%, compared to revenue of $27.3 million for the three
months ended June 27, 2020. For the three months ended June 26, 2021, MedMen had
26 active retail locations in the states of California, New York, Nevada,
Arizona, Illinois and Florida, of which four were located within the state of
New York were classified as discontinued operations, which was consistent with
the same period in the prior year. During the fiscal fourth quarter of 2021,
five retail locations in the state of Florida remained temporarily closed in
order to redirect inventory from its Eustis cultivation facility to its highest
performing stores and thus excluded from the number of active retail locations
as of June 26, 2021. As of June 26, 2021, the Company had 22 active retail
locations related to continuing operations.



The increase in revenue was primarily related to the Company's continued
initiatives in light of the COVID-19 pandemic as well as the gradual reopening
across the country. During the three months ended June 26, 2021, the Company
continued to enhance its retail experience through better product assortment,
customer service and purchasing options with an emphasis on curbside pickup and
delivery which have proven to be effective service enhancements in response to
the COVID-19 pandemic. Previously modified store operations based on Centers for
Disease Control and Prevention guidelines and local ordinances, which limit
in-store traffic for certain locations, began to operate at a less restrictive
scale during the fiscal fourth quarter of 2021 as COVID-related restrictions
began to lift, resulting in increased tourism and normalizing retail traffic
levels. MedMen expects to continue offering a variety of purchasing options for
its customers to navigate through the COVID-19 pandemic, which is expected to
continue to increase revenues in the coming periods. As the Company's key
markets continue to recover from the pandemic, MedMen also expects to utilize
their marketing communications and revised assortment to drive and serve retail
traffic at a much higher volume and rate.

                                       66

Cost of Goods Sold and Gross Profit





Cost of goods sold for the three months ended June 26, 2021was $22.3 million, an
increase of $6.0 million, or 37%, compared with $16.3 million of cost of goods
sold for the three months ended June 27, 2020. Gross profit for the three months
ended June 26, 2021 was $19.7 million, representing a gross margin of 47%,
compared with gross profit of $11.0 million, representing a gross margin of 40%,
for the three months ended June 27, 2020. The increase in gross margin is
primarily due to the Company's retail optimization efforts in which improvements
in the Company's product sourcing and favorable changes to pricing and payment
terms in key vendor agreements resulted in improved margins for the fiscal
fourth quarter of 2021. In addition, the Company's shrink-to-grow plan in
Florida continues to drive results in which manufacturing consistency and
cultivation yields has produced additional margins.



For the three months ended June 26, 2021, the Company had 26 active retail
locations in the states of California, New York, Nevada, Arizona, Illinois and
Florida, of which four were located within the state of New York were classified
as discontinued operations, compared to 26 active retail locations for the
comparative prior period. MedMen operated five cultivation and production
facilities in the states of Nevada, California, New York, Florida and Arizona,
of which one facility located in New York was classified as discontinued
operations, compared to six cultivation facilities for the three months ended
June 27, 2020. During the fiscal fourth quarter of 2020, five retail locations
in Florida were temporarily closed in order to shift supply levels from its
Eustis cultivation facility to the Company's highest-performing stores in
Florida which remain closed as of June 26, 2021. As of the fiscal fourth quarter
of 2021, the Company continues to evaluate strategic partnerships for its
cultivation and production facilities in California and Nevada where the Company
continues to incur significant fixed costs. MedMen expects margins to improve in
the coming periods as the Company restructures certain operations and divests
licenses in non-core markets.



Total Expenses


Total expenses for the three months ended June 26, 2021 were $41.4 million, a
decrease of $235.2 million, or 85%, compared to total expenses of $276.6 million
for the three months ended June 27, 2020, which represents 99% of revenue for
the three months ended June 26, 2021, compared to 1,013% of revenue for the
three months ended June 27, 2020. The decrease in total expenses was
attributable to the factors described below.



General and administrative expenses for the three months ended June 26, 2021 and
June 27, 2020 were $32.9 million and $38.6 million, respectively, a decrease of
$5.7 million, or 15%. General and administrative expenses have decreased
primarily due to the Company's continued efforts to reduce company-wide selling,
general and administrative expenses ("SG&A"). Key drivers of the decrease in
general and administrative expenses include overall corporate cost savings,
strategic headcount reductions across various departments, and elimination of
non-core functions and overhead in several departments, resulting in a decrease
in deal costs of $5.6 million and a decrease in banking fee and charges of

$0.5
million.



Sales and marketing expenses for the three months ended June 26, 2021 and June
27, 2020 were $0.6 million and $0.2 million, respectively, an increase of $0.4
million, or 200%. The increase in sales and marketing expenses is primarily
attributed to an increase in marketing and promotions of $0.2 million and an
increase in public relations expense of $0.1 million for the three months ended
June 26, 2021 compared to the same period prior.



Depreciation and amortization for the three months ended June 26, 2021 and June
27, 2020 was $6.1 million and $15.0 million, respectively, a decrease of $8.9
million, or 59%. The decrease is attributable to the reduction in capital
expenditures through a slow-down in new store buildouts of the Company's
operations through acquisitions and a delay in capital-intensive projects
throughout the fiscal year ended June 26, 2021, resulting in a decrease in
property, plant and equipment and intangible assets.

Realized and unrealized changes in fair value of contingent consideration remained generally consistent for the three months ended June 26, 2021 and June 27, 2020 in the amount of nil and $0.5 million, respectively.





Impairment expense for the three months ended June 26, 2021 and June 27, 2020
was nil and $229.8 million, respectively, a decrease of $229.8 million, or 100%.
The Company did not identify indicators of impairment of its goodwill or
long-lived assets during their annual impairment assessment during the fourth
fiscal quarter of 2021. In the prior year, the Company recognized a significant
amount of impairment expense as a result of the economic and market conditions
related to the COVID-19 pandemic and the regulatory environment, which has been
less volatile during the current period.



Other operating expense (income) for the three months ended June 26, 2021 was
$1.8 million, a decrease of $9.3 million, or 124% from the income of $7.5
million for the three months ended June 27, 2020. During the three months ended
June 26, 2021, the Company recognized $2.3 million of restructuring fees which
was offset by a gain on disposal of assets held for sale of $1.6 million, a gain
on disposal of assets of $0.2 million and a gain on settlement of accounts


payable of $0.3 million.



                                       67





Total Other Expense



Total other expense for the three months ended June 26, 2021 was $20.0 million,
an increase of $6.2 million, or 45%, compared to total other expense of $13.8
million for the three months ended June 27, 2020. The increase in total other
expense was primarily attributable to the Company's higher debt balance as of
June 26, 2021 which increased $26.6 million compared to June 27, 2020 as a
result of the 2020 Term Loan and the Unsecured Convertible Facility as well as
issuances from the Convertible Facility. Accordingly, amortization of debt
discount and loan origination fees of $10.2 million for the three months ended
June 26, 2021 increased by $8.8 million compared to $1.4 million for the three
months ended June 27, 2020. This was offset by interest expense of $10.0 million
during the three months ended June 26, 2021 which decreased by $2.9 million
compared to $12.9 million for the three months ended June 27, 2020.



Provision for Income Taxes



The provision for income tax benefit for the three months ended June 26, 2021
was $0.3 million, a decrease of $17.7 million, or 102% compared to the provision
for income tax expense of $17.4 million for the three months ended June 27,
2020, primarily attributable to an increase in expenses incurred during the
three months ended June 26, 2021 that carry deferred tax impacts resulting in no
effect on the annual estimated tax rate relative to pre-tax book income.



Net Loss



Net loss from continuing operations for the three months ended June 26, 2021 was
$41.4 million, a decrease of $255.4 million, or 86%, compared to a net loss from
continuing operations of $296.8 million for the three months ended June 27,
2020. The decrease in net loss from continuing operations was mainly
attributable to the decrease of $229.8 million in impairment expense as
described above. In addition, the Company's continued focus on cost efficiency
within the corporate structure, which includes strategic headcount reductions,
elimination of non-core functions and overhead in several departments, and
renegotiation of ancillary cost to the business has resulted in additional cost
savings during the fiscal fourth quarter of 2021. Net loss attributable to
non-controlling interest for the three months ended June 26, 2021 was $7.3
million, resulting in net loss of $38.9 million attributable to the shareholders
of MedMen Enterprises Inc. compared to $156.8 million for the three months


ended
June 27, 2020.



Non-GAAP Financial Measures


In addition to providing financial measurements based on GAAP, the Company
provides additional financial metrics that are not prepared in accordance with
GAAP. Management uses non-GAAP financial measures, in addition to GAAP financial
measures, to understand and compare operating results across accounting periods,
for financial and operational decision-making, for planning and forecasting
purposes and to evaluate the Company's financial performance. These non-GAAP
financial measures (collectively, the "non-GAAP financial measures") are:



Adjusted Net Loss from       Net Loss from Continuing Operations adjusted for
Continuing Operations        transaction costs, restructuring costs, share-based
                             compensation, and other non-cash operating costs.
                             This non-GAAP measure represents the profitability
                             of the Company excluding unusual and infrequent
                             expenditures and non-cash operating costs.

EBITDA from Continuing       Net Loss from Continuing Operations adjusted for
Operations                   interest and financing costs, income taxes,
                             depreciation, and amortization. This non-GAAP
                             measure represents the Company's current operating
                             profitability and ability to generate cash flow.

Adjusted EBITDA from         EBITDA from Continuing Operations (Non-GAAP)
Continuing Operations        adjusted for transaction costs, restructuring costs,
                             share-based compensation, and other non-cash
                             operating costs, such as changes in fair value of
                             derivative liabilities and unrealized changes in
                             fair value of investments. This non-GAAP measure
                             represents the Company's current operating
                             profitability and ability to generate cash flow
                             excluding non-recurring, irregular or one-time
                             expenditures in order improve comparability.

Working Capital              Current assets less current liabilities. This
                             non-GAAP measure represents operating liquidity
                             available to the Company.




                                       68





Corporate SG&A               Selling, general and administrative expenses related
                             to the Company's corporate functions. This non-GAAP
                             measure represents scalable expenditures that are
                             not directly correlated with the Company's retail
                             operations.

Retail Revenue               Consolidated revenue less non-retail revenue, such
                             as cultivation and manufacturing revenue. This
                             non-GAAP measure provides a standalone basis of the
                             Company's performance as a cannabis retailer in the
                             U.S. considering the Company's long-term viability
                             is correlated with cash flows provided by or used in
                             retail operations.

Retail Cost of Goods Sold    Consolidated cost of goods sold less non-retail cost
                             of goods sold. This non-GAAP measure provides a
                             standalone basis of the Company's performance as a
                             cannabis retailer in the U.S. considering the
                             Company's long-term viability is correlated with
                             cash flows provided by or used in retail operations.

Retail Gross Margin          Retail Revenue (Non-GAAP) less the related Retail
                             Cost of Goods Sold (Non-GAAP). Retail Gross Margin
                             (Non-GAAP) is reconciled to consolidated gross
                             margin as follows: consolidated revenue less
                             non-retail revenue reduced by consolidated cost of
                             goods sold less non-retail cost of goods sold. This
                             non-GAAP measure provides a standalone basis of the
                             Company's performance as a cannabis retailer in the
                             U.S. considering the Company's long-term viability
                             is correlated with cash flows provided by or used in
                             retail operations.

Retail Gross Margin Rate     Retail Gross Margin (Non-GAAP) divided by Retail
                             Revenue (Non-GAAP). Retail Gross Margin Rate
                             (Non-GAAP) is reconciled to consolidated gross
                             margin rate as follows: consolidated revenue less
                             non-retail revenue reduced by consolidated cost of
                             goods sold less non-retail cost of goods sold,
                             divided by consolidated revenue less non-retail
                             revenue. This non-GAAP measure provides a standalone
                             basis of the Company's performance as a cannabis
                             retailer in the U.S. considering the Company's
                             long-term viability is correlated with cash flows
                             provided by or used in retail operations.

Retail Adjusted EBITDA       Retail Gross Margin (Non-GAAP) less direct store
Margin                       operating expenses, including rent, payroll,
                             security, insurance, office supplies and payment
                             processing fees, local cannabis and excise taxes,
                             distribution expenses, and inventory adjustments.
                             This non-GAAP measure provides a standalone basis of
                             the Company's performance as a cannabis retailer in
                             the U.S. considering the Company's long-term
                             viability is correlated with cash flows provided by
                             or used in retail operations.

Retail Adjusted EBITDA       Retail Adjusted EBITDA Margin (Non-GAAP) divided by
Margin Rate                  Retail Revenue (Non-GAAP), which is calculated as
                             consolidated revenue less non-retail revenue. This
                             non-GAAP measure provides a standalone basis of the
                             Company's performance as a cannabis retailer in the
                             U.S. considering the Company's long-term viability
                             is correlated with cash flows provided by or used in
                             retail operations.


In addition to providing financial measurements based on GAAP, the Company
provides additional financial metrics that are not prepared in accordance with
GAAP. Management uses non-GAAP financial measures, in addition to GAAP financial
measures, to understand and compare operating results across accounting periods,
for financial and operational decision-making, for planning and forecasting
purposes and to evaluate the Company's financial performance. Non-GAAP financial
measures are financial measures that are not defined under GAAP. Management
believes that these non-GAAP financial measures assess the Company's ongoing
business in a manner that allows for meaningful comparisons and analysis of
trends in the business, as they facilitate comparing financial results across
accounting periods and to those of peer companies. The Company uses these
non-GAAP financial measures and believes they enhance an investors'
understanding of the Company's financial and operating performance from period
to period. Management also believes that these non-GAAP financial measures
enable investors to evaluate the Company's operating results and future
prospects in the same manner as management.



                                       69





In particular, the Company continues to make investments in its cannabis
properties and management resources to better position the organization to
achieve its strategic growth objectives which have resulted in outflows of
economic resources. Accordingly, the Company uses these metrics to measure its
core financial and operating performance for business planning purposes. In
addition, the Company believes investors use both GAAP and non-GAAP measures to
assess management's past and future decisions associated with its priorities and
allocation of capital, as well as to analyze how the business operates in, or
responds to, swings in economic cycles or to other events that impact the
cannabis industry. However, these measures do not have any standardized meaning
prescribed by GAAP and may not be comparable to similar measures presented by
other companies in the Company's industry. Accordingly, these non-GAAP financial
measures are intended to provide additional information and should not be
considered in isolation or as a substitute for measures of performance prepared
in accordance with GAAP.



These non-GAAP financial measures exclude certain material non-cash items and
certain other adjustments the Company believes are not reflective of its ongoing
operations and performance. These financial measures are not intended to
represent and should not be considered as alternatives to net income, operating
income or any other performance measures derived in accordance with GAAP as
measures of operating performance or operating cash flows or as measures of
liquidity. These non-GAAP financial measures have important limitations as
analytical tools and should not be considered in isolation or as a substitute
for any standardized measure under GAAP. For example, certain of these non-GAAP
financial measures:

? exclude certain tax payments that may reduce cash available to the Company;

? do not reflect any cash capital expenditure requirements for the assets being


   depreciated and amortized that may have to be replaced in the future;

? do not reflect changes in, or cash requirements for, working capital needs; and

? do not reflect the interest expense, or the cash requirements necessary to


   service interest or principal payments on debt.

Other companies in the cannabis industry may calculate these measures differently than the Company does, limiting their usefulness as comparative measures.





Retail Performance



Within the cannabis industry, MedMen is uniquely focused on the retail component
of the value chain. For the fiscal fourth quarter of 2021, the Company is
providing detail with respect to earnings before interest, taxes, depreciation
and amortization ("EBITDA") attributable to the Company's national retail
operations to show how it is leveraging its retail footprint and strategically
investing in the future. The table below highlights the Company's national
Retail Adjusted EBITDA Margin (Non-GAAP), which excludes corporate marketing
expenses, distribution expenses, inventory adjustments, and local cannabis and
excise taxes. Entity-wide Adjusted EBITDA (Non-GAAP) is presented in Item 7
"Reconciliations of Non-GAAP Financial Measures".



                                                Fiscal Quarter Ended
                                              June 26,        March 27,
($ in Millions)                                 2021             2021         $ Change        % Change

Gross Profit                                 $     19.7       $     14.3     $      5.4              38 %
Gross Margin Rate                                    47 %             40 %            7 %            16 %


Cultivation & Wholesale Revenue                    (1.3 )           (1.6 )          0.3             (19 )%
Cultivation & Wholesale Cost of Goods Sold         (3.9 )           (6.1 )          2.2             (36 )%
Non-Retail Gross Margin                            (2.6 )           (4.5 )          1.9             (42 )%

Retail Gross Margin (Non-GAAP)               $     22.3       $     18.8     $      3.5              19 %
Retail Gross Margin Rate (Non-GAAP)                  55 %             56 %


         (1 )%           (1 )%




                                       70





                                               Fiscal Quarter Ended
                                            June 26,          March 27,
($ in Millions)                               2021              2021          $ Change        % Change

Net Loss                                   $     (46.2 )     $      (9.7 )   $    (36.5 )           376 %
Net Loss from Discontinued Operations,
Net of Taxes                                       4.8              (6.9 )         11.7            (170 )%
Provision for Income Tax (Benefit)
Expense                                           (0.3 )           (32.7 )         32.4             (99 )%
Other Expense                                     20.0              22.7           (2.7 )           (12 )%
Excluded Items (1)                                 1.8               3.0           (1.2 )           (40 )%
Loss from Operations Before Excluded
Items                                            (19.9 )           (23.6 )          3.7             (16 )%

Non-Retail Gross Margin                           (2.6 )            (4.5 )          1.9             (42 )%
Non-Retail Operating Expenses (2)                (26.2 )           (27.3 )          1.0              (4 )%
Non-Retail EBITDA Margin                         (28.8 )           (31.8 )          3.0              (9 )%

Retail Adjusted EBITDA Margin (Non-GAAP)   $       8.9       $       8.2     $      0.7               9 %
Retail Adjusted EBITDA Margin Rate
(Non-GAAP)                                          22 %              24 %           (2 )%           (8 )%

(1) Items adjusted from Net Loss for the fiscal quarters ended June 26, 2021 and

March 27, 2021 include impairment expense of nil and $1.5 million,

respectively, and other operating expense of $1.8 million and $1.5 million,

respectively.

(2) Non-retail operating expenses is comprised of the following items:






                                              Fiscal Quarter Ended
                                            June 26,        March 27,
($ in Millions)                               2021             2021         $ Change       % Change

Cultivation & Wholesale                    $      1.4       $      1.5     $     (0.1 )           (7 )%
Corporate SG&A                                   16.8             16.4            0.4              2 %
Depreciation & Amortization                       6.1              8.1           (2.0 )          (25 )%
Other (3)                                         1.9              1.3            0.6             46  %
Non-Retail Operating Expenses                    26.2             27.3           (1.1 )           (4 )%


Direct Store Operating Expenses (4)              13.4             10.6


      2.8             26 %
Excluded Items (1)                                1.8              3.0           (1.2 )         (40) %
Total Expenses                             $     41.4       $     40.9     $      0.5              1 %

(3) Other non-retail operating expenses excluded from Retail Adjusted EBITDA

Margin (Non-GAAP) for the fiscal quarters ended June 26, 2021 and March 27,

2021 primarily consist of transaction costs and restructuring costs of $3.1

million and $4.4 million, respectively, and share-based compensation of $1.0

million and $0.1 million, respectively, as commonly excluded from Adjusted

EBITDA from Continuing Operations (Non-GAAP). Refer to Item 7

"Reconciliations of Non-GAAP Financial Measures" below.

(4) For the current period, direct store operating expenses now includes local

taxes of $0.5 million and $(0.7) million for the fiscal quarters ended June

26, 2021 and March 27, 2021, respectively. Local taxes include cannabis sales

and excise taxes imposed by municipalities in which the Company has active

retail operations and vary by jurisdiction. Local taxes are not a cost

required to directly operate the Company's stores, but rather a byproduct of

retail operations. In addition, distribution expenses of $0.8 million and

$0.7 million for the fiscal quarters ended June 26, 2021 and March 27, 2021,

respectively, are also included in direct store operating expenses for the

current reporting period. Distribution expenses relate to additional porter

fees. Such expenses were presented as additional adjustments to arrive at

Retail Adjusted EBITDA Margin (Non-GAAP) in prior periods and are now

presented within retail operating expenses for a condensed presentation of


     Retail Adjusted EBITDA Margin (Non-GAAP).




The non-GAAP retail performance measures demonstrate the Company's four-wall
margins which reflect the sales of the Company's retail operations relative to
the direct costs required to operate such dispensaries. Retail revenue is
related to net sales from the Company's stores, excluding non-retail revenue,
such as cultivation and manufacturing revenue. Similarly, retail cost of goods
sold and direct store operating expenses are directly related to the Company's
retail operations. Non-Retail Revenue includes revenue from third-party
wholesale sales. Non-Retail Cost of Goods Sold includes costs directly related
to third-party wholesale sales produced by the Company's cultivation and
production facilities, such as packaging, materials, payroll, rent, utilities,
security, etc. While third-party sales were not significant for the fiscal
quarter ended June 26, 2021, Non-Retail Cost of Goods Sold related to
cultivation and wholesale operations was $3.9 million due to unallocated
overages from increased production burn rate. Non-Retail Operating Expenses
include ongoing costs related to the Company's cultivation and wholesale
operations, corporate spending, and depreciation and amortization. Non-Retail
EBITDA Margin reflects the gross margins of the Company's cultivation and
wholesale operations excluding any related operating expenses. To determine the
Company's four-wall margins, certain costs that do not directly support the
Company's retail function are excluded from Retail Adjusted EBITDA Margin
(Non-GAAP).



                                       71





For the fiscal fourth quarter of 2021, retail revenue was $40.7 million across
the Company's continuing operations in California, Nevada, Arizona, Illinois and
Florida. This represents a 20% increase, or $6.9 million, over the fiscal third
quarter of 2021 of $33.8 million. The increase in retail revenue from continuing
operations was driven primarily by increased consumer spending during the fiscal
fourth quarter of 2021 wherein the number of COVID-19 cases nationwide declined
and vaccines became available, allowing certain states to reopen and slowly lift
restrictions. In particular, the gradual reopening in California during the
fiscal fourth quarter of 2021, which is the largest market in which the Company
operates in, resulted in an increase in retail revenue of $4.9 million compared
to the prior quarter. Similarly in Nevada, Las Vegas is starting to return to
normalcy with increased tourism during the fiscal fourth quarter of 2021 in
which retail revenue increased $1.4 million compared to the fiscal third quarter
of 2021. The Company expects traffic levels to normalize as the Company's key
markets continue to recover from the pandemic. Retail Gross Margin Rate
(Non-GAAP), which is Retail Gross Margin (Non-GAAP) divided by Retail Revenue
(Non-GAAP), for the fiscal fourth quarter of 2021 was 55% compared to the fiscal
third quarter of 2021 of 56%. Retail Gross Margin (Non-GAAP) is Retail Revenue
(Non-GAAP) less the related Retail Cost of Goods Sold (Non-GAAP). The Company
had an aggregate Retail Adjusted EBITDA Margin Rate (Non-GAAP), which is Retail
Adjusted EBITDA Margin (Non-GAAP) divided by Retail Revenue (Non-GAAP), of 22%
for the fiscal fourth quarter of 2021 which represents a decrease compared to
the 24% realized in the fiscal third quarter of 2021 primarily due to direct
store operating expenses which include, but are not limited to, rent, utilities,
payroll and payroll related expenses, employee benefits, and security. Direct
store operating expenses increased $2.8 million, or 26%, compared to the fiscal
third quarter of 2021, primarily driven by higher general and administrative
expenses and local tax adjustments during the current period.



Corporate SG&A



Corporate-level general and administrative expenses across various functions
including Marketing, Legal, Retail Corporate, Technology, Accounting and
Finance, Human Resources and Security (collectively referred to as "Corporate
SG&A") are combined to account for a significant proportion of the Company's
total general and administrative expenses. For the current reporting period,
Corporate SG&A now includes pre-opening expenses of $4.7 million and $5.4
million for the fiscal quarter ended June 26, 2021 and March 27, 2021,
respectively, which were presented as non-Corporate SG&A in prior periods.
Pre-opening expenses is excluded from Retail Adjusted EBITDA Margin (Non-GAAP)
and thus more appropriately classified as Corporate SG&A.



                                              Fiscal Quarter Ended
                                            June 26,        March 27,
($ in Millions)                               2021             2021         $ Change       % Change

General and Administrative                 $     32.9       $     29.6     $      3.3             11 %
Sales and Marketing                               0.6              0.1            0.5            500 %

Consolidated SG&A                                33.5             29.7            3.8             13 %


Direct Store Operating Expenses (1)              13.4             10.6


      2.8             26 %
Cultivation & Wholesale                           1.4              1.5           (0.1 )           (7 )%
Other (2)                                         1.9              1.2            0.7             58 %
Less: Non-Corporate SG&A                         16.7             13.3            3.4             26 %

Corporate SG&A as a Component of
Adjusted EBITDA from Continuing
Operations (Non-GAAP)                      $     16.8       $     16.4     $      0.4              2 %

(1) For the periods presented, direct store operating expenses now include local

taxes of $0.5 million and $(0.7) and million and distribution expenses of

$0.8 million and $0.7 million for the fiscal quarters ended June 26, 2021 and

March 27, 2021, respectively. Refer to Item 7 "Retail Performance" and notes

therein for further information.

(2) Other non-Corporate SG&A for the fiscal quarters ended June 26, 2021 and

March 27, 2021 primarily consist of transaction costs and restructuring costs

of $3.1 million and $4.4 million, respectively, and share-based compensation

of $1.0 million and $0.1 million, respectively, as commonly excluded from

Adjusted EBITDA (Non-GAAP). Refer to Item 7 "Retail Performance" and notes


     therein for further information.




For the fiscal fourth quarter of 2021, Adjusted EBITDA from Continuing
Operations (Non-GAAP) includes Corporate SG&A (Non-GAAP) of $16.8 million,
representing an increase of $0.4 million, or 2%, from the $16.4 million that
Corporate SG&A (Non-GAAP) contributed to Adjusted EBITDA Loss from Continuing
Operations (Non-GAAP) in the fiscal third quarter of 2021. The increase was
related to higher accounting and legal fees as well as salaries and benefits.



                                       72

Reconciliations of Non-GAAP Financial Measures

The table below reconciles Net Loss to Adjusted Net Loss from Continuing Operations (Non-GAAP) for the periods indicated.



                                               Three Months Ended                Year Ended
                                            June 26,        June 27,       June 26,       June 27,
($ in Millions)                               2021            2020           2021           2020

Net Loss                                   $    (46.2 )    $   (317.8 )   $   (157.6 )   $   (526.5 )

Less: Net Loss from Discontinued
Operations, Net of Taxes                          4.8            21.0           12.2           69.9
Add (Deduct) Impact of:
Transaction Costs & Restructuring Costs           3.1             5.2           11.0           27.6
Share-Based Compensation                          1.0            (0.4 )          3.8           10.4
Other Non-Cash Operating Costs (1)               (0.6 )         221.8


   (11.7 )        268.1
Income Tax Effects (2)                            0.5           (48.7 )          3.1          (49.0 )

Total Adjustments                                 4.0           177.9            6.2          257.1

Adjusted Net Loss from Continuing
Operations (Non-GAAP)                      $    (37.4 )    $   (118.9 )   $   (139.2 )   $   (199.5 )




The table below reconciles Adjusted Net Loss to EBITDA from Continuing
Operations (Non-GAAP) and Adjusted EBITDA from Continuing Operations (Non-GAAP)
for the periods indicated.

                                               Three Months Ended                Year Ended
                                            June 26,        June 27,       June 26,       June 27,
($ in Millions)                               2021            2020           2021           2020

Net Loss                                   $    (46.2 )    $   (317.8 )   $   (157.6 )   $   (526.5 )

Less: Net Loss from Discontinued
Operations, Net of Taxes                          4.8            21.0           12.2           69.9
Add (Deduct) Impact of:
Net Interest and Other Financing Costs            9.9            12.9


    35.9           33.5
Provision for Income Taxes                       (0.3 )          17.4            1.8          (40.9 )
Amortization and Depreciation                    18.7            17.2           58.6           45.3

Total Adjustments                                28.3            47.5           96.3           37.9

EBITDA from Continuing Operations
(Non-GAAP)                                 $    (13.1 )    $   (249.3 )   $

(49.1 ) $ (418.7 )



Add (Deduct) Impact of:
Transaction Costs & Restructuring Costs           3.0             5.2           11.0           27.6
Share-Based Compensation                          1.0            (0.4 )          3.8           10.4
Other Non-Cash Operating Costs (1)               (0.6 )         221.8


   (11.7 )        268.0

Total Adjustments                                 3.4           226.6            3.1          306.0

Adjusted EBITDA from Continuing
Operations (Non-GAAP)                      $     (9.7 )    $    (22.7 )   $    (46.0 )   $   (112.7 )






 (1) Other non-cash operating costs for the periods presented were as follows:


                                               Three Months Ended                 Year Ended
                                            June 26,         June 27,       June 26,       June 27,
                                              2021             2020           2021           2020

Change in Fair Value of Derivative
Liabilities                                $      1.2       $     (0.7 )   $     (0.9 )   $     (8.8 )
Gain on Disposal of Assets Held For Sale         (1.6 )              -          (12.3 )         (8.4 )
Change in Fair Value of Contingent
Consideration                                       -              0.5            0.4            9.0
Gain/Loss on Lease Termination                      -             (0.1 )        (17.7 )         (0.3 )
Gain/Loss on Extinguishment of Debt              (1.4 )              -           16.1           43.8
Gain/Loss from Disposal of Assets                (0.2 )           (8.3 )          0.6           (7.3 )
Impairment Expense                                  -            229.8            2.4          246.7
Other Non-Cash Operating Costs                    1.4              0.6

(0.3 ) (6.7 )

Total Other Non-Cash Operating Costs $ (0.6 ) $ 221.8 $ (11.7 ) $ 268.0

(2) Income tax effects to arrive at Adjusted Net Loss from Continuing Operations

(Non-GAAP) are related to temporary tax differences in which a future income

tax benefit exists, such as changes in fair value of investments, assets held

for sale and other assets, changes in fair value of contingent consideration,

gain/loss from disposal of assets, and impairment expense. The income tax

effect is calculated using the federal statutory rate of 21.0% and statutory

rate for the state in which the related asset is held or the transaction


     occurs, most of which is in California with a statutory rate of 8.84%.


                                       73





Adjusted Net Loss from Continuing Operations (Non-GAAP) represents the
profitability of the Company excluding unusual and infrequent expenditures and
non-cash operating costs. The change in Adjusted Net Loss from Continuing
Operations (Non-GAAP) was primarily due to reductions in SG&A as a direct result
of successful implementation of the Company's cost reduction initiatives.
Accordingly, Adjusted Net Loss from Continuing Operations (Non-GAAP) improved in
the fiscal fourth quarter of 2021 compared to the prior period.



EBITDA from Continuing Operations (Non-GAAP) represents the Company's current
operating profitability and ability to generate cash flow and includes
significant non-cash operating costs. Net Loss is adjusted for interest and
financing costs as a direct result of debt financings, income taxes, and
amortization and depreciation expense to arrive at EBITDA from Continuing
Operations (Non-GAAP). Considering these adjustments, the Company had EBITDA
from Continuing Operations (Non-GAAP) of $(13.1) million and $(49.1) million for
the three months and year ended June 26, 2021 improved compared to the
comparative prior periods. The change in EBITDA from Continuing Operations
(Non-GAAP) was primarily due to the impairments recognized during the 2020
fiscal year as a result of the economic and market conditions related to the
COVID-19 pandemic and regulatory environment.



For the three months and year ended June 26, 2021, the Company saw an
improvement in Adjusted EBITDA from Continuing Operations (Non-GAAP) of $(9.7)
million and $(46.0) million, respectively, compared to $(22.7) million and
$(112.7) million for the three months and year ended June 27, 2020,
respectively. The improvement is the direct result of the Company's turnaround
progress and execution on their transition to growth during fiscal year 2021.
The financial performance of the Company is expected to further improve as the
Company has a clear path towards profitability, and coupled with significant
deleveraging of its balance sheet, will reposition the Company for growth. Refer
to Item 7 "Liquidity and Capital Resources"for further discussion of
management's future outlook and executed strategic plan.

Refer to Item 7 "Retail Performance" above for reconciliations of Retail Adjusted EBITDA.





Cash Flows

The following table summarizes the Company's consolidated cash flows for the years ended June 26, 2021 and June 27, 2020:





                                                  Year Ended
                                            June 26,       June 27,
($ in Millions)                               2021           2020         $ Change       % Change

Net Cash Used in Operating Activities $ (59.7 ) $ (109.7 ) $

    50.0            (46 )%
Net Cash Provided by (Used in) Investing
Activities                                       11.2          (19.3 )         30.5           (158 )%
Net Cash Provided by Financing
Activities                                       50.7          107.1

(56.4 ) (53 )%

Net Decrease in Cash and Cash
Equivalents                                       2.3          (21.9 )         24.2           (111 )%
Cash Included in Assets Held for Sale
(1)                                                 -           (0.7 )          0.7           (100 )%
Cash and Cash Equivalents, Beginning of
Period                                            9.6           32.2

(22.6 ) (70 )%

Cash and Cash Equivalents, End of Period $ 11.9 $ 9.6 $


    2.3             24 %

Cash Flow from Operating Activities


Net cash used in operating activities was $59.7 million for the fiscal year
ended June 26, 2021, a decrease in $50.0 million, or 46%, compared to $109.7
million for the year ended June 27, 2020. The decrease in cash used was
primarily due to implementation of the Company's cost rationalization strategy
during the fiscal year ended June 26, 2021. Specifically, general and
administrative expenses include corporate-level expenses across various
functions including Marketing, Legal, Retail Corporate, Technology, Accounting
and Finance, Human Resources and Security which are combined to account for a
significant proportion of the Company's total general and administrative
expenses. In addition, the COVID-19 pandemic impacted the majority of the fiscal
year ended June 26, 2021, versus the last fourth months of the fiscal year ended
June 27, 2020, which resulted in a decrease in traffic levels due to retail
occupancy restrictions and a significant slowdown in tourism.

Cash Flow from Investing Activities


Net cash provided by investing activities was $11.2 million for the fiscal year
ended June 26, 2021, a decrease of $30.5 million, or 158%, compared to $19.3
million used for the year ended June 27, 2020. The increase in net cash provided
in investing activities was primarily due to the Company's strategic plan to
limit cash outlays and divest non-core assets. Net cash was positively impacted
by a decrease in purchases of property and equipment of $50.6 million, offset by
a decrease in proceeds from the sale of investments of $12.5 million and a
decrease in proceeds from the sale of property of $9.3 million.



                                       74

Cash Flow from Financing Activities


Net cash provided by financing activities was $50.7 million for the fiscal year
ended June 26, 2021, a decrease of $56.4 million, or 53%, compared to $107.1
million for the year ended June 27, 2020. The decrease in change of net cash
provided by financing activities was primarily due to a decrease of $33.7
million in the issuance of equity instruments for cash and a decrease of $35.4
million in proceeds from the credit facility with Gotham Green Partners. The
decrease in debt and equity financings was offset by an increase in principal
repayments of the credit facility with Gotham Green Partners in the amount of
$8.0 million and a decrease of $14.0 million in principal repayments on notes
payable compared to the same period in the prior year.



Financial Condition

The following table summarizes certain aspects of the Company's financial condition as of June 26, 2021 and June 27, 2020:





                                        June 26,      June 27,
($ in Millions)                           2021          2020        $ Change      % Change

Cash and Cash Equivalents               $    11.9     $     9.6     $     2.3            24 %
Total Current Assets                    $    96.7     $    72.7     $    24.0            33 %
Total Assets                            $   472.5     $   574.3     $  (101.8 )         (18 )%
Total Current Liabilities               $   288.6     $   182.8     $   105.8            58 %
Notes Payable, Net of Current Portion   $   258.4     $   319.2     $   (60.8 )         (19 )%
Total Liabilities                       $   726.1     $   751.2     $   (25.1 )          (3 )%
Total Shareholders' Equity              $  (253.6 )   $  (176.9 )   $   (76.7 )          43 %
Working Capital Deficit                 $  (191.9 )   $  (110.1 )   $   (81.8 )          74 %




As of June 26, 2021, the Company had $11.9 million of cash and cash equivalents
and $191.9 million of working capital deficit, compared to $9.6 million of cash
and cash equivalents and $110.1 million of working capital deficit as of June
27, 2020. The increase in cash and cash equivalents was associated with the
Company's continued focus on its cost rationalization strategy and the Company's
turnaround plan. During the fiscal year ended June 26, 2021, the Company
stabilized liquidity by successfully accessing the equity and debt capital
markets to properly position the Company for growth. In addition, the Company
has the support of certain lenders, including Gotham Green Partners, Stable Road
Capital and affiliates, and its most significant landlord, Treehouse Real Estate
Investment Trust, as a part of its financial restructuring and turnaround plan
to support the expansion of the Company's retail footprint. On July 2, 2020, the
Company amended the Convertible Facility and 2018 Term Loan wherein all interest
payable through June 2021 will be paid-in-kind. Further, on July 2, 2020, the
Company also amended its lease terms with the REIT wherein a portion of the
total current monthly base rent will be deferred for the 36-month period between
July 1, 2020 and July 1, 2023.



The $81.8 million increase in working capital deficit was primarily related to
an increase of $24.7 million assets held for sale related to the Company's
divestiture of non-core assets during the year ended June 26, 2021, an increase
of $2.3 million in cash as described above, and a decrease of $3.1 million in
due from related party as individuals previously identified as related party as
of June 27, 2020 were no longer deemed related as of June 26, 2021. The net
increase in current liabilities was due to the an increase of $87.3 million in
current notes payable primarily related the senior secured term loan with Hankey
Capital LLC, an increase of $18.1 million in liabilities held for sale, and a
$21.4 million increase in income taxes payable, offset by a decrease of $19.5
million of accounts payable and accrued liabilities.



The Company's working capital will be significantly impacted by continued growth
in retail operations, operationalizing existing licenses, and the success of the
Company's cost-cutting measures. The ability to fund working capital needs will
also be dependent on the Company's ability to raise additional debt and equity
financing.

Liquidity and Capital Resources





The primary need for liquidity is to fund working capital requirements of the
business, including operationalizing existing licenses, capital expenditures,
debt service and acquisitions. The primary source of liquidity has primarily
been private and/or public financing and to a lesser extent by cash generated
from sales. The ability to fund operations, to make planned capital
expenditures, to execute on the growth/acquisition strategy, to make scheduled
debt and rent payments and to repay or refinance indebtedness depends on the
Company's future operating performance and cash flows, which are subject to
prevailing economic conditions and financial, business and other factors, some
of which are beyond its control. Liquidity risk is the risk that the Company
will not be able to meet its financial obligations associated with financial
liabilities. The Company manages liquidity risk through the management of its
capital structure. The Company's approach to managing liquidity is to ensure
that it will have sufficient liquidity to settle obligations and liabilities
when due.



                                       75





As of June 26, 2021, the Company had $11.9 million of cash and cash equivalents
and $191.9 million of working capital deficit, compared to $9.6 million of cash
and cash equivalents and $110.1 million of working capital deficit as of June
27, 2020. For the fiscal year ended June 26, 2021, the Company's monthly burn
rate, which was calculated as cash spent per month in operating activities, was
approximately $5.0 million compared to a monthly burn rate of approximately $9.1
million for the fiscal year ended June 27, 2020. During the fiscal year ending
June 26, 2021, management continued their efforts of executing the Company's
strategic plan to limit significant cash outlays and reduce the overall cash
burn. As of June 26, 2021, cash generated from ongoing operations may not be
sufficient to fund operations and, in particular, to fund the Company's growth
strategy in the short-term or long-term.



During the fiscal year ended June 26, 2021, management focused its efforts on a
disciplined turnaround plan which has allowed the Company's story to turn from
one of turnaround to one of growth. Subsequent to June 26, 2021, management
preserved its strategic plan, which includes, but is not limited to, capital
raised subsequent to year-end, monitoring of corporate-level expenses, and
rationalization of capital expenditures to correlate to our new store opening
strategy. The Company maintains its focus on the optimization of SG&A expenses
while improving overall efficiency and attracting world-class talent. Revisions
to its dynamic pricing model has resulted in gains and management constantly
seeks improvements in its cost structure to achieve better margins. The Company
is focused on improving its supply chain and cultivation facilities to increase
manufacturing consistency and cultivation yields to drive additional gains in
EBITDA, particularly in Florida where they have expanded their cultivation
capacity while improving the quality of flower production. Management believes
the Florida market is an exciting area for expansion as MedMen executes against
a disciplined growth plan. To further drive revenue growth, ongoing initiatives
include marketing campaigns and digital media to drive retail traffic,
investment in its delivery program by offering service enhancements, and
revamped assortment to serve customers at higher volume and rate. In addition,
capital raised subsequent to year-end has given MedMen the cash and flexibility
to continue the expansion of its retail footprint. Prior to U.S. federal
legalization of cannabis, and subject to compliance with applicable laws and
stock exchange rules, MedMen will actively explore opportunities to expand
MedMen's footprint across international markets. The Company continues to
execute on its plan to achieve its growth and profitability goals and explore
additional strategic opportunities.



The Company continues to explore avenues of raising additional funds from debt
and equity financing subsequent to June 26, 2021 to mitigate any potential
liquidity risk. The Company intends to continue raising capital by utilizing
debt and equity financings on an as needed basis. Management evaluated its
financial condition as of June 26, 2021 in conjunction with recent financings
and transactions which provide capital subsequent to the fiscal year ended

June
26, 2021 as discussed below.

Amendment and Extension of Gotham Green Convertible Notes





On August 17, 2021, the Company announced that Tilray, Inc. ("Tilray") acquired
a majority of the outstanding senior secured convertible notes under the
Convertible Facility (the "Notes") from Gotham Green Partners, LLC and other
funds. Under the terms of the transaction, a newly formed limited partnership
(the "SPV") established by Tilray and other strategic investors acquired an
aggregate principal amount of approximately $165.8 million of the Notes and
warrants issued in connection with the Convertible Facility, all of which were
originally issued by MedMen and held by GGP, representing 75% of the outstanding
Notes and 65% of the outstanding warrants under the Convertible Facility.
Specifically, Tilray's interest in the SPV represents rights to 68% of the Notes
and related warrants held by the SPV, which are convertible into, and
exercisable for, approximately 21% of the outstanding Class B Subordinate Voting
Shares of MedMen upon closing of the transaction. Tilray's ability to convert
the Notes and exercise the warrants is dependent upon U.S. federal legalization
of cannabis or Tilray's waiver of such requirement as well as any additional
regulatory approvals.


In connection with the sale of the Notes, the Company amended and restated the
Convertible Facility ("Sixth Amendment") to, among other things, extend the
maturity date to August 17, 2028, eliminate any cash interest obligations and
instead provide for payment-in-kind interest, eliminate certain repricing
provisions, and eliminate and revise certain restrictive covenants. The
amendments are intended to provide MedMen the flexibility to execute on its
growth priorities and explore additional strategic opportunities. In connection
with the Sixth Amendment, accrued payment-in-kind interest on the Notes will be
convertible at price equal to the trailing 30-day volume weighted average price
of the Company's Subordinate Voting Shares. The Notes may not be prepaid until
the federal legalization of marijuana. The Notes will also provide the holders
with a top-up right to acquire additional Subordinate Voting Shares and a
pre-emptive right with respect to future financings of the Company, subject to
certain exceptions, upon the issuance by MedMen of certain equity or
equity-linked securities. No changes have been made to the conversion and
exercise prices of the Notes or related Warrants.



                                       76





Backstopped Equity Investment



On August 17, 2021, the Company entered into subscription agreements with
various investors led by Serruya Private Equity Inc. ("SPE") to purchase
$100,000,000 of units ("Units") of the Company at a purchase price of $0.24 per
Unit (the "Private Placement") wherein certain investors associated with SPE
agreed to backstop the Private Placement (the "Backstop Commitment"). The
proceeds from the Private Placement will allow MedMen to expand its operations
in key markets such as California, Florida, Illinois and Massachusetts and
identify and accelerate further growth opportunities across the United States.



Each Unit consists of one Class B Subordinate Voting Share (each, a "Share") and
one-quarter share purchase warrant (each, a "Warrant"). Each whole Warrant
permits the holder to purchase one Share for a period of five years from the
date of issuance at an exercise price of $0.288 (C$0.384) per Share. Each Unit
issued to certain SPE purchasers consists of one Share and one-quarter of one
Warrant plus a proportionate interest in a short-term warrant (the "Short-Term
Warrant") which expires on December 31, 2021. The Short-Term Warrant entitles
the holders to acquire, at the option of the holders and upon payment of
$30,000,000, an aggregate of 125,000,000 Units at an exercise price of $0.24
(C$0.32) per Unit, or $30,000,000 principal amount of notes at par, convertible
into 125,000,000 Shares at a conversion price of $0.24 (C$0.32) per Share. The
Company will use any proceeds from exercise of the Short-Term Warrant to pay
down an existing debt instrument. In consideration for the Backstop Commitment,
certain investors associated with SPE will receive a fee of $2,500,000 to be
paid in the form of 10,416,666 Shares at a deemed price of $0.24 (C$0.32) per
Share.

Off-Balance Sheet Arrangements

The Company has no material undisclosed off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on its results of operations, financial condition, revenues or expenses, liquidity, capital expenditures or capital resources that are material to investors.

Critical Accounting Policies, Significant Judgments and Estimates and Recent Accounting Pronouncements

A detailed description of our critical accounting policies and recent accounting pronouncements are detailed in Item 8 of this Form 10-K.





The Company makes judgments, estimates and assumptions about the future that
affect the policies and reported amounts of assets and liabilities, and revenues
and expenses. Actual results may differ from these estimates. The estimates and
underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognized in the period in which the estimate is revised if the
revision affects only that period or in the period of the revision and future
periods if the review affects both current and future periods.



The preparation of the Company's annual Consolidated Financial Statements in
conformity with GAAP requires management to make judgments, estimates and
assumptions about the carrying amounts of assets and liabilities at the dates of
the financial statements and the reported amounts of total net revenue and
expenses during the reporting period which are not readily apparent from other
sources. These estimates and assumptions are based on current facts, historical
experience and various other factors that the Company believes to be reasonable
under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities and the recording
of revenue, costs and expenses that are not readily apparent from other sources.
The actual results the Company experiences may differ materially and adversely
from these estimates. To the extent there are material differences between the
estimates and actual results, the Company's future results of operations will be
affected.



Significant judgments, estimates and assumptions that have the most significant
effect on the amounts recognized in the annual Consolidated Financial Statements
are described below.

Depreciation of Property and Equipment





Depreciation of property and equipment is dependent upon estimates of useful
lives which are determined through the terms and methods in accordance with
GAAP. The assessment of any impairment of these assets is dependent upon
estimates of recoverable amounts that take into account factors such as economic
and market conditions and the useful lives of assets.

Amortization of Intangible Assets





Amortization of intangible assets is dependent upon estimates of useful lives
and residual values which are determined through the exercise of judgment.
Intangible assets that have indefinite useful lives are not subject to
amortization and are tested annually for impairment, or more frequently if
events or changes in circumstances indicate that they might be impaired. The
assessment of any impairment of these assets is dependent upon estimates of
recoverable amounts that take into account factors such as economic and market
conditions.



                                       77





Inventory Valuation



The Company periodically reviews physical inventory for excess, obsolete, and
potentially impaired items and reserves. The Company reviews inventory for
obsolete, redundant and slow-moving goods and any such inventory is written down
to net realizable value. The reserve estimate for excess and obsolete inventory
is dependent on expected future use.



Business Combinations



In a business combination, all identifiable assets, liabilities and contingent
liabilities acquired are accounted for using the acquisition method. One of the
most significant estimates relates to the determination of the fair value of
these assets and liabilities. Contingent consideration is measured at its
acquisition-date fair value and included as part of the consideration
transferred in a business combination. Management exercises judgment in
estimating the probability and timing of when earn-outs are expected to be
achieved which is used as the basis for estimating fair value. Contingent
consideration that is classified as equity is not remeasured at subsequent
reporting dates and its subsequent settlement is accounted for within equity.
Contingent consideration that is classified as an asset or a liability is
remeasured at subsequent reporting dates in accordance with ASC 450,
"Contingencies", as appropriate, with the corresponding gain or loss being
recognized in earnings in accordance with ASC 805, "Business Combinations". For
any intangible asset identified, depending on the type of intangible asset and
the complexity of determining its fair value, an independent valuation expert or
management may develop the fair value, using appropriate valuation techniques,
which are generally based on a forecast of the total expected future net cash
flows. The evaluations are linked closely to the assumptions made by management
regarding the future performance of the assets concerned and any changes in


the
discount rate applied.

Convertible Instruments and Derivative Liabilities





The identification of components embedded within financial instruments is based
on interpretations of the substance of the contractual arrangement and therefore
requires judgment from management. The separation of the components affects the
initial recognition of the financial instruments at issuance and the subsequent
recognition of interest on the liability component. Where the conversion option
has a variable conversion rate, the conversion option is recognized as a
derivative liability measured at fair value, with changes in fair value reported
in the Consolidated Statements of Operations. The instrument is recognized as a
financial liability and subsequently measured at amortized cost. The
determination of the fair value of the liability is also based on a number of
assumptions, including contractual future cash flows, discount rates and the
presence of any derivative financial instruments.



Share-Based Compensation


The Company uses the Black-Scholes option-pricing model or the Monte-Carlo
simulation model to determine the fair value of equity-based grants. In
estimating fair value, management is required to make certain assumptions and
estimates such as the expected life of units, volatility of the Company's future
share price, risk-free rates, future dividend yields and estimated forfeitures
at the initial grant date. Changes in assumptions used to estimate fair value
could result in materially different results.

Goodwill Impairment, Other Intangible Assets, Long-Lived Assets and Purchase Asset Valuations

Goodwill is tested annually for impairment, or more frequently if events or
changes in circumstances indicate that the carrying value of goodwill has been
impaired. In the impairment test, the Company measures the recoverability of
goodwill by comparing a reporting unit's carrying amount to the estimated fair
value of the reporting unit. The carrying amount of each reporting unit is
determined based upon the assignment of the Company's assets and liabilities,
including existing goodwill, to the identified reporting units. The Company
relies on a number of factors, including historical results, business plans,
forecasts and market data. Changes in the conditions for these judgments and
estimates can significantly affect the recoverable amount.



Long-lived assets, including amortizable intangible assets, are tested annually
for impairment if events or changes in circumstances indicate that the carrying
amount may not be recoverable. Once a triggering event has occurred, the
impairment test employed is based on whether the intent is to hold the asset for
continued use or to hold the asset for sale. The impairment test for assets held
for use requires a comparison of cash flows expected to be generated over the
useful life of an asset group to the carrying value of the asset group. An asset
group is established by identifying the lowest level of cash flows generated by
a group of assets that are largely independent of the cash flows of other assets
and could include assets used across multiple businesses or segments. If the
carrying value of an asset group exceeds the estimated undiscounted future cash
flows, an impairment would be measured as the difference between the fair value
of the group's long-lived assets and the carrying value of the group's
long-lived assets. The impairment is only to the extent the carrying value of
each asset is above its fair value. For assets held for sale, to the extent the
carrying value is greater than the asset's fair value less costs to sell, an
impairment loss is recognized for the difference. Determining whether a
long-lived asset is impaired requires various estimates and assumptions,
including whether a triggering event has occurred, the identification of the
asset groups, estimates of future cash flows and the discount rate used to


determine fair values.



                                       78


The estimates and assumptions used in management's impairment analysis are based
on current facts, historical experience and various other factors that the
Company believes to be reasonable under the circumstances, the results of which
form the basis for making judgments about its impairment analysis. The
impairment estimates and assumptions bear the risk of change due to its inherent
nature and subjectivity. The unanticipated effects of a longer or more severe
COVID-19 outbreaks and decreases in consumer demand could reasonably expected to
negatively affect the key assumptions and estimates.



Deferred Tax Assets



Deferred tax assets, including those arising from tax loss carryforwards,
require management to assess the likelihood that the Company will generate
sufficient taxable earnings in future periods in order to utilize recognized
deferred tax assets. Assumptions about the generation of future taxable profits
depend on management's estimates of future cash flows. In addition, future
changes in tax laws could limit the ability of the Company to obtain tax
deductions in future periods. To the extent that future cash flows and taxable
income differ significantly from estimates, the ability of the Company to
realize the net deferred tax assets recorded at the reporting date could be


impacted.



Income Taxes



Current tax assets and/or liabilities comprise those claims from, or obligations
to, fiscal authorities relating to the current or prior reporting periods that
are unpaid at the reporting date. Current tax is payable on taxable profit,
which differs from profit or loss in the financial statements. Calculation of
current tax is based on tax rates and tax laws that have been enacted or
substantively enacted by the end of the reporting period.



Income taxes are accounted for under the asset and liability method, which
requires the recognition of deferred tax assets and liabilities for the expected
future tax consequences of events that have been included in the financial
statements. Under this method, deferred tax assets and liabilities are
determined on the basis of the differences between the financial statement and
tax basis of assets and liabilities by using enacted tax rates in effect for the
year in which the differences are expected to reverse. The effect of a change in
tax rates on deferred tax assets and liabilities is recognized in income in the
period that includes the enactment date.



Deferred tax assets are recognized to the extent that the Company believe that
these assets are more likely than not to be realized. In making such a
determination, all available positive and negative evidence are considered,
including future reversals of existing taxable temporary differences, projected
future taxable income, tax-planning strategies, and results of recent
operations. If it is determined that the Company would be able to realize
deferred tax assets in the future in excess of their net recorded amount, an
adjustment to the deferred tax asset valuation allowance is recorded, which
would reduce the provision for income taxes



Uncertain tax positions are recorded in accordance with ASC 740 on the basis of
a two-step process in which (1) the Company determines whether it is more likely
than not that the tax positions will be sustained on the basis of the technical
merits of the position and (2) for those tax positions that meet the
more-likely-than-not recognition threshold, the Company recognizes the largest
amount of tax benefit that is more than 50 percent likely to be realized upon
ultimate settlement with the related tax authority.

Right-of-Use Assets and Lease Liabilities


Right-of-use assets are measured at cost, which is calculated as the amount of
the initial measurement of lease liability plus any lease payments made at or
before the commencement date, any initial direct costs and related restoration
costs. The right-of-use assets are depreciated on a straight-line basis over the
shorter of the lease term or estimates of economic life. The Company's lease
liability is recognized net of lease incentives receivable. The lease payments
are discounted using the interest rate implicit in the lease or, if that rate
cannot be determined, the lessee's incremental borrowing rate. The period over
which the lease payments are discounted is the expected lease term, including
renewal and termination options that the Company is reasonably certain to
exercise. Refer to "Note 2 - Summary of Significant Accounting Policies" of the
Consolidated Financial Statements for the fiscal years ended June 26, 2021


and
June 27, 2020 in Item 8.

Assets Held for Sale and Discontinued Operations





Assets held for sale are measured at the lower of its carrying amount or fair
value less cost to sell ("FVLCTS") unless the asset held for sale meets the
exceptions as denoted by ASC 360. FVLCTS is the amount obtainable from the sale
of the asset in an arm's length transaction, less the costs of disposal. A
component of an entity is identified as operations and cash flows that can be
clearly distinguished, operationally and financially, from the rest of the
entity. A discontinued operation is a component of an entity that either has
been disposed of, or is classified as held for sale.



                                       79





Down Round Features


In July 2017, the FASB issued ASU 2017-11, "Earnings Per Share (Topic 260)"
wherein the amendments change the classification of certain equity-linked
financial instruments (or embedded features) with down round features. For
freestanding equity-classified financial instruments, the amendments require
entities that present earnings per share ("EPS") in accordance with ASC 260 to
recognize the effect of the down round feature when it is triggered. That effect
is treated as a dividend and as a reduction of income available to common
shareholders in basic EPS. For freestanding equity-classified financial
instruments, the value of the effect of the down round feature is measured as
the difference in fair value of the financial instrument without the down round
feature with a strike price corresponding to the stated strike price versus the
reduced strike price upon the down round feature being triggered. The fair value
is measured in accordance with the measurement guidance in ASC 820, "Fair Value
Measurement" in which the Company utilizes the Black-Scholes pricing model.
Convertible instruments with embedded conversion options that have down round
features are subject to the specialized guidance for contingent beneficial
conversion features (in Subtopic 470-20, Debt-Debt with Conversion and Other
Options), including related EPS guidance (in Topic 260). During the year ended
June 26, 2021, a down round feature present in the Convertible Facility and the
2020 Term Loan was triggered. Refer to Note 18 and Note 19 of the Consolidated
Financial Statements for the year ended June 26, 2021 in Item 8.

Allocation of Interest to Discontinued Operations


Under ASC 205-20 "Discontinued Operations", interest on debt that is to be
assumed by the buyer and interest on debt that is required to be repaid as a
result of a disposal transaction is allocated to discontinued operations. The
amount of interest expense reclassified to discontinued operations is directly
related to the amount of debt that will be repaid with funds received from the
sale of discontinued operations. During the year ended June 26, 2021, the
Company classified its New York operations as discontinued operations as a
result of definitive agreements wherein the aggregate proceeds will be assigned
to the lender of the 2020 Term Loan in partial satisfaction of the outstanding
debt. Refer to Note 28 of the Consolidated Financial Statements for the year
ended June 26, 2021 in Item 8. The Company elected not to reclassify other
interest expenses which are not directly attributable to discontinued operations
as permitted under ASC 205-20.

Emerging Growth Company Status


The Company is an "emerging growth company" as defined in the Section 2(a) of
the Exchange Act, as modified by the Jumpstart Our Business Start-ups Act of
2012, or the JOBS Act provides that an emerging growth company can take
advantage of the extended transition period provided in Section 13(a) of the
Exchange Act for complying with new or revised accounting standards applicable
to public companies. The Company has elected to take advantage of this extended
transition period and as a result of this election, our financial statements may
not be comparable to companies that comply with public company effective dates.



                                       80

Latest news about MedMen Enterprises Inc.

MedMen Enterprises Brief: Furthermore, Michael Serruya, Executive Chairman, who has served on the Board since August 2021, has stepped down from the Board effective today	Jan. 24	MT
MedMen Enterprises Brief: Board has appointed Richard Ormond as Chief Restructuring Officer	Jan. 24	MT
MedMen Enterprises Brief: Ellen Deutsch Harrison has stepped down as Chief Executive Officer and a Board member effective January 19, 2024	Jan. 24	MT
MedMen Enterprises Inc. Announces Management Changes	Jan. 24	CI
Ellen Deutsch Harrison Announces Step Down as Chief Executive Officer of MedMen Enterprises Inc	Jan. 24	CI
The Mint Cannabis completed the acquisition of Non-Core Business Operations in Arizona and Certain Assets in Nevada from MedMen Enterprises Inc..	Jan. 04	CI
MedMen Enterprises to Exit Arizona and Nevada, Selling Non-Core Assets to MINT Cannabis	Dec. 20	MT
The Mint Cannabis entered into definitive agreements to acquire Non-Core Business Operations in Arizona and Certain Assets in Nevada from MedMen Enterprises Inc..	Dec. 19	CI
Medmen Enterprises Inc. Appoints Melony Valleau as Its Chief Accounting Officer	23-10-02	CI
MedMen Enterprises Brief: Deutsch has also been appointed to the Co's Board of Directors, increasing the size to six	23-07-05	MT
MedMen Enterprises Brief: Deutsch succeeds Interim CEO Edward Record, who will now continue as a non-executive member of MedMen's Board	23-07-05	MT
MedMen Enterprises Brief: Appointing Ellen Deutsch as Chief Executive Officer, effective immediately, and Amit Pandey as Chief Financial Officer, effective July 24	23-07-05	MT
MedMen Enterprises Inc. Announces Chief Executive Officer Changes	23-07-05	CI
MedMen Enterprises Inc. Appoints Amit Pandey as Chief Financial Officer, Effective July 24, 2023	23-07-05	CI
MedMen Enterprises Inc. Appoints Ellen Deutsch to Board of Directors	23-07-05	CI
MedMen Enterprises' Chief Financial Officer Resigns	23-06-19	MT
MedMen Enterprises Inc. Announces CFO Changes, Effective June 29, 2023	23-06-16	CI
MedMen Enterprises Inc. Reports Earnings Results for the Third Quarter and Nine Months Ended March 25, 2023	23-05-25	CI
MedMen Enterprises Inc. Opens Newest Dispensary in Morton Grove	23-05-17	CI
MedMen Says Continuing Restructuring Efforts, to Conduct Strategic Review of Assets in Arizona, Illinois, Nevada	23-02-21	MT
MedMen Enterprises Inc. Reports Earnings Results for the Second Quarter and Six Months Ended December 24, 2022	23-02-02	CI
MedMen Enterprises Inc. Reports Earnings Results for the First Quarter Ended September 24, 2022	22-11-03	CI
MedMen Enterprises Inc. Reports Earnings Results for the Full Year Ended June 25, 2022	22-09-09	CI
An unknown buyer completed the acquisition of Substantially All of the Florida Assets of MedMen for $67 million.	22-08-21	CI
Ascend Wellness Holdings, Inc. (CNSX:AAWH.U) cancelled the acquisition of an unknown majority stake in Medmen NY, Inc. from MedMen Enterprises Inc..	22-08-14	CI

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Company Profile

MedMen Enterprises Inc. is a retail cannabis company with an operational footprint in California, Nevada, Illinois, Massachusetts, and New York. The Company offers a robust selection of high-quality products, including MedMen-owned brands MedMen Red, Moss and LuxLyte, through its premium retail stores, proprietary delivery service, as well as curbside and instore pickup. MedMen Buds, a loyalty program, provides access to promotions, product drops and content. It produces and curates the consumer product assortment for retail operations in its local communities with services and engaging in-store experience, combined with reward, delivery, and e-commerce programs. It also offers buds rewards, where buds members earn points with every purchase, plus exclusive access to drops and deals. The Company also provides gift cards.

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Calendar

2024-05-28 - Q3 2024 Earnings Release (Projected)

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MEDMEN ENTERPRISES INC.	-25.00%	16.75M
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MedMen Enterprises Inc.

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MMEN

CA58507M1077

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MEDMEN ENTERPRISES : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-K)

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