With the cannabis stock meltdown that erased billions of dollars of shareholder value in 2019 and cannabis companies still requiring capital to operate and grow their businesses, cannabis financings have shifted to debt from equity. Shareholders do not want to see highly dilutive equity financings at these depressed stock prices.
However, with most cannabis companies still struggling to be cash flow positive, adding debt payments could hamper short-term profitability.
Over C$500 million of debt deals have materialized in December in the cannabis space and here are a few to “put in your pipe” and mull over during the holiday break.
Curaleaf Holdings, Inc. Announces New US$275 Million Senior Secured Term Loan Facility
- December 20, 2019
- CSE: CURA ; OTCQX: CURLF
- www.curaleaf.com
- US$275 million Senior Secured Term Loan Facility
- Interest rate of 13.0% per year, payable quarterly in arrears.
- Maturity date is 48 months from closing
- Funding from syndicate of lenders with Seaport Global Securities LLC acting as the sole placement agent
iAnthus Closes on $36 Million Senior Secured Convertible Notes in a Third Tranche of Funding Led by Gotham Green Partners
- December 20, 2019
- CSE: IAN ; OTCQX: ITHUF
- www.ianthuscapital.com
- $36.15 million of Senior Secured Convertible Notes
- Funding led by Gotham Green Partners
- Part of a broader $100 million financing plan that was announced in September 2019
- Coupon rate of 13%, payable quarterly, will mature on May 14, 2021
- Conversion price of $1.61 per share
- The Notes are being issued with $18.08 million of three-year warrants with an exercise price of $1.67 per share.
Indiva Closes First Tranche of $4 Million Financing
- December 23, 2019
- TSXV: NDVA
- www.indiva.com
- $2.1 million of Unsecured Convertible Debentures
- First tranche of a $4.0 million financing
- The Debentures will mature in 36 months with an interest rate of 10% per year
- Conversion price is $0.20 per share
Jushi Holdings Inc. Announces US$27.46 Million Debt Financing Led by Insiders and Founders
- December 23, 2019
- CSE: JUSH ; OTCQX: JUSHF
- www.jushico.com
- US$27.46 million for 10% Senior Secured Notes, interest payable in cash quarterly
- Notes will mature on January 15, 2023
- Purchasers of the Notes will also receive Warrants to acquire Class B subordinate voting shares with an expiry date of December 23, 2024, at an exercise price of US$1.58
Choom Completes $4,100,000 Convertible Debenture Unit Private Placement
- December 24, 2019
- CSE: CHOO; OTCQB: CHOOF
- www.choomholdings.ca
- Debenture Units at $250,000 per unit for $4.1 million
- The Debentures will mature on December 23, 2021
- Interest Rate of 10% per year, payable semi-annually
- The Company also issued 1,666,666 Share Purchase Warrants per Debenture Unit, each warrant to be exercisable to acquire one share for a four-year period at an exercise price of $0.20 per share.
The Green Organic Dutchman Announces Closing of Senior Secured Credit Facility of Up to $42.7 Million
- December 24, 2019
- TSX: TGOD ; US: TGODF
- www.tgod.ca
- Senior Secured First Lien Credit Facility of up to $42.7 million
- Funded by Maynbridge Capital Inc.
- Committed $27.7 million Senior Secured Term Loan with an 18‐month term, and an additional uncommitted $15.0 million Senior Secured Term Loan
- 7,000,000 Share Purchase Warrants were issued to Maynbridge; each warrant is exercisable to acquire one common share of the TGOD for a period of 36 months at an exercise price of C$1.00 per share.
Avicanna Enters Into USD$5 Million Revolving Credit Facility
- December 27, 2019
- TSX: AVCN
- www.avicanna.com
- US$5 million credit facility
- The lender is Inmobiliaria Bondue S.A.S. (“Bondue”)
- Interest rate is 8.0% per year
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