MariMed, Inc. (OTCQX:MRMD), a leading multi-state cannabis operator, announced it closed a $35 million secured credit facility with Chicago Atlantic Advisors, LLC as the lead lender.
“I am delighted to announce the closing of this transformative credit facility (…) MariMed is known for its operational and financial discipline, resulting in one of the strongest balance sheets in the cannabis industry, enabling us to secure this funding,” said Jon Levine, MariMed president and interim CEO. “While we are capable of funding our current growth plans with cash flow from operations, the time is right to raise capital and accelerate these plans, which we believe will result in meaningful returns to our shareholders.”
What Happened: MariMed closed a $35 million credit facility with a three-year maturity and the ability to extend to a five-year maturity under certain conditions.
- MariMed borrowed $30 million at close and can draw down up to an additional $5 million over the next six months.
- Funds will be used for completing the build-out of a new cultivation and processing facility in Illinois and a new processing kitchen in Missouri, expanding existing cultivation and processing facilities in Massachusetts and Maryland, funding other capital expenditures, and repaying in full the Kind Therapeutics seller notes from the Maryland acquisition in April 2022, with the remaining balance to be used for acquisitions.
- The facility bears interest at a floating rate based on the bank prime rate plus 5.75% and includes 30% warrant coverage priced at a 20% premium.
- The Company’s Debt/EBITDA ratio based on the midpoint of the Company’s 2022 annual EBITDA guidance is now 1.5X.
- MariMed can repay the principal loan balance without penalty after the first 20 months, per a company press release.
“We are excited to support the growth of MariMed. The team has consistently demonstrated its ability to profitably expand across an attractive six-state footprint for the benefit of its patients and adult-use customers. We look forward to significantly growing our investment with them in the future,” said John Mazarakis, partner of Chicago Atlantic.
Chicago Atlantic acted as a lead arranger with the specialty finance company Silver Spike Investment Corp. (NASDAQ:SSIC) for the senior secured credit facility, also serving as the administrative agent for the credit facility.
In the arrangement of the senior secured credit facility, Echelon Capital Markets acted as the financial advisor to MariMed.
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