NORWOOD, Mass., Nov. 20, 2023 – PRESS RELEASE – MariMed Inc., a number one multistate hashish operator targeted on bettering lives every single day, introduced that it closed a $58.7 million secured credit score facility with a U.S. chartered financial institution on Nov. 17, 2023.
“I’m delighted to announce the closing of this debt refinancing, which can generate vital money financial savings,” MariMed CEO Jon Levine stated. “Securing a decrease price, when rates of interest proceed to rise, is the results of the monetary self-discipline we now have displayed over the previous decade. Importantly, we’re happy there isn’t a warrant or different fairness element leading to dilution to our shareholders.”
Levine stated, “By paying off the Chicago Atlantic mortgage, we have been additionally capable of unencumber our working belongings in Illinois, Ohio and Delaware, in addition to our branded merchandise, offering extra levers for future time period loans at engaging charges if we select. Moreover, the credit score facility bolsters our means to proceed executing our strategic plan, notably because it pertains to rising the corporate by means of mergers and acquisitions. There are numerous engaging alternatives for accretive offers to be made in our business, and we intend to discover any that may enhance shareholder worth.”
Highlights of the refinancing deal embrace:
- A ten-year, $58.7 million Development to Everlasting Business Actual Property Mortgage (CREM) mortgage.
- Curiosity at a decrease mounted price. After the primary 5 years, the speed might be reset for the remaining 5 years.
- Curiosity solely funds for the primary 12 months. After the primary 12 months, funds will be primarily based on a 20-year amortization schedule.
- The mortgage is secured solely by the corporate’s Maryland and Massachusetts working belongings and actual property holdings.
- The corporate’s different working belongings and key manufacturers similar to Betty’s Eddies and Nature’s Heritage are actually unencumbered with the payoff of the Chicago Atlantic time period mortgage.
- The phrases of the transaction don’t embrace warrants or different fairness or dilutive devices.
- The mortgage proceeds have been used to:
- Repay the present time period loans with Chicago Atlantic and Financial institution of New England and a sellers notice from the Ermont acquisition, which within the combination totaled roughly $46.8 million.
- The remaining funds might be held in escrow by the lender to finish the growth of the corporate’s Hagerstown, Md., cultivation facility. Any unused proceeds might be launched to the corporate after completion of the cultivation facility growth.
“The principal and curiosity financial savings of $4.7 million within the first yr, and $3.5 million a yr for the 4 years thereafter, will considerably enhance money circulation from operations going ahead, and supply funds that can be utilized for acquisitions if we select,” Levine stated. “Together with this facility, our decrease blended rate of interest1 and new debt facility signify a debt/EBITDA ratio of two.5X, which is among the many lowest within the hashish business and communicate to our means to generate vital optimistic money circulation from operations.”
1. The blended rate of interest is calculated because the weighted common price of all interest-bearing loans, mortgages, and vendor notes.