A $682 million deal that would have been the largest in the history of the legal pot industry has been snuffed out after a major California cannabis firm announced Tuesday that it won’t go through with the planned acquisition of Chicago’s PharmaCann.

MedMen agreed to acquire the Loop-based firm last December in the blockbuster all-stock deal. As part of the acquisition, which would have expanded MedMen’s reach to 12 states, PharmaCann shareholders would have received roughly 168 million shares of the combined company.

Shares of MedMen are currently traded in the U.S. and on the Canadian stock exchange. Citing a recent downturn for pot stocks and the “continued evolution” of the firm’s business strategy, MedMen ultimately decided it would focus on leveraging its retail brand, investment in the California market and delivery and loyalty platforms “to grow the business” and appease investors.

“We believe it is now in the best interest of our shareholders to deepen, rather than widen, our company’s reach,” Adam Bierman, MedMen’s co-founder and chief executive, said in the statement.

Jeremy Unruh, a spokesman for Pharmacann, noted that “economic conditions that originally led us to our deal with MedMen are no longer present in this lightning-fast marketplace.”

“Shares of publicly-traded cannabis companies are down dramatically and the regulatory hurdles among the carious states are challenging,” Unruh added. “Our private shareholders are aligned with our leadership that PharmaCann’s best path forward is without MedMen.”

While both companies hold licenses to grow and sell marijuana in multiple states and have operations in Illinois, MedMen’s footprint in the state will now grow substantially. That’s because PharmaCann plans to pay for a $21 million line of credit advanced by MedMen by handing over licenses in Virginia and Illinois, including a cultivation center in Hillcrest, a dispensary in Evanston and another retail license in the Chicago area.

Last month, the facility in Hillcrest was one of the seven cultivation centers in Illinois to receive a license to start growing recreational marijuana. PharmaCann’s other grow facility in Dwight was also awarded a license.

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

As a result, MedMen will soon hold four dispensary licenses in the Chicago area, including its existing location in Oak Park. Unruh said the licenses PharmaCann plans to give up were selected “largely by negotiation.”

The statement from MedMen also claimed the deal was stymied by “regulatory hurdles at the federal and state level.” But just last month, the firm announced the merger was expected to close by the end of the year after receiving antitrust approval from the Department of Justice, according to Bloomberg.

MedMen also announced Tuesday that Zeeshan Hyder, the company’s current chief corporate development officer, has been tapped as its new chief financial officer. He is replacing Michael Kramer, who was terminated Monday and has signed a consulting deal with the firm that will remain in effect until 2020.