A new credit facility has been secured by multistate cannabis operator Curaleaf. Based in Massachusetts, the company announced on Wednesday, January 15 that it would gain access to $300 million from an affiliation of lenders; names were not revealed.
Based on the official notes for Curaleaf’s debt offering – of which will be payable quarterly in arrears – a 13 percent interest rate will be imposed on the money and debt maturity will extend over 48 months from closing.
“We are pleased with the upsizing and closing of the deal at what we believe to be attractive terms,” said the Chief Executive Officer of Curaleaf, Joseph Lusardi. “Most importantly, we strengthened our balance sheet without diluting our existing shareholders.”
Initially, the cannabis company was expected to receive $275 million. This is according to a December announcement from Curaleaf, which was acknowledged as the most debt ever to be raised in the U.S. cannabis industry.
What will Curaleaf’s “upsizing” of debt be used for?
Curaleaf, which boasted a market cap of $4.8 billion as of September 2019, is acknowledged as a pioneer in vertical integration for the U.S. cannabis industry. During the official announcement of Curaleaf’s
expansion and closing of a Senior Secured Term Loan Facility from a syndicate of lenders, the company diffused speculation in regards to how the proceeds will be used.
In addition to refinancing existing debt, the money will be used for general corporate purposes and to finance capital expenditures. Moreover, the money will be used to subsidize expenses and transaction fees associated with previous acquisitions. Seaport Global Securities LLC is the primary placement agent.
“With the completion of this transaction, we have ample liquidity to execute on our strategy and are well-positioned to take advantage of the significant market opportunities that exist in this space,” said Lusardi. He claims that “upsizing” the deal will ensure that existing shareholders are not diluted and that balance sheets can be strengthened.
About Curaleaf Holdings
Trading as ‘CSE: CURA’ on the Canadian Securities Exchange (CSA) and ‘ CURLF’ on the OTC Markets Group (OTCQX), Curaleaf has established itself as a national brand. Renowned for being a reliable, trustworthy and quality-assured source of medicinal cannabis, Curaleaf is proud to boast operations in 12 states.
Curaleaf’s dispensary count currently rests at 52, with each dispensary’s products being sourced from the company’s 14 cultivation sites and 14 processing sites. In addition to presenting the medical market with ‘Curaleaf Hemp’ branded CBD products, adult-use consumers are also indulged with Curaleaf’s cannabis products. Back in November, the company opened its first recreational cannabis dispensary in Massachusetts at Oxford.
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