US-based cannabis retailer MedMen Enterprises has entered into a mutual agreement with PharmaCann to terminate the merger of their respective businesses.

The companies signed a business combination agreement for the acquisition of PharmaCann in December 2018.

MedMen’s board of directors has decided that in order to create greater shareholder value and grow the business, it will leverage its retail brand, presence in California and digital platform.

As part of the termination agreement, PharmaCann agreed to transfer certain cannabis licences and related assets in Illinois and Virginia to MedMen.

The company will also pay MedMen a termination fee. It will transfer the membership interests in three entities that hold the operational cultivation and production facility in Hillcrest, Illinois, a retail location in Evanston, Illinois, retail license for Greater Chicago, Illinois, and a licence for vertically integrated facility in Virginia.

MedMen co-founder and chief executive officer Adam Bierman said: “The cannabis sector has evolved tremendously since we first announced the PharmaCann transaction and based on the current macro-environment and future opportunities that exist for our business, we believe it is now in the best interest of our shareholders to deepen, rather than widen, our company’s reach.

“Looking at the PharmaCann portfolio today, Illinois has emerged as the most attractive opportunity for our longer-term, strategic growth plan. The addition of those assets, without dilution, is a win for MedMen and our shareholders.”