Acreage Holdings Secures $150 Million Credit Facility to Accelerate Strategic Growth Initiatives
NEW YORK, Dec. 16, 2021 (GLOBE NEWSWIRE) — Acreage Holdings, Inc. (“Acreage”) (CSE: ACRG.A.U, ACRG.B.U), (OTCQX: ACRHF, ACRDF), a vertically integrated, multi-state operator of cannabis cultivation and retail facilities in the U.S., today announced it has secured a $150 million credit facility (the “Credit Facility”) with AFC Gamma, Inc. (NASDAQ:AFCG) (“AFC Gamma”) and Viridescent Realty Trust, Inc. (“Viridescent”). Under the terms of the Credit Facility, $100 million is available for immediate use and a further $50 million is available in future periods under a committed accordion option once certain, predetermined milestones are achieved. Acreage intends to use the proceeds of the Credit Facility to fund expansion initiatives, repay existing debt and provide additional working capital.
“This financing is a strong recognition of the significant work our team has done over the last year to position Acreage for both long-term success and as a leader in our industry,” said Steve Goertz, Acreage’s Chief Financial Officer. “This non-dilutive source of capital further enhances our balance sheet and provides us with increased financial flexibility as we continue to focus on driving profitability and accelerating growth in our core markets to ultimately maximize shareholder value. We are pleased to be working with AFC Gamma and Viridescent and look forward to furthering our partnership as we continue to strengthen our operations.”
We are impressed with the efforts Acreage’s management team have put forth to improve their balance sheet, further strengthening their ability to execute on their growth plan.
Leonard M. Tannenbaum, AFC Gamma’s Chief Executive Officer
With the divesture of their non-performing assets, and their footprint in very attractive limited license states, including their recent entry into Ohio, we are very excited for the opportunity ahead for Acreage and look forward to working with them in 2022 and beyond.
“The Viridescent team is thrilled to be working with Acreage to provide the funding required for future growth as they continue to execute on their refocused strategy,” said Rob Holmes, Viridescent’s Chief Executive Officer. “We believe that Acreage is extremely well-positioned with their current operational footprint, and we look forward to strengthening our partnership as they continue to grow their presence in this rapidly evolving industry.”
The Credit Facility will bear interest at 9.75% per annum, payable monthly in arrears, with a maturity date of January 1, 2026.
AFC Gamma has committed $60 million (with an additional $10 million syndicated to an affiliate) of the $100 million available for immediate use under the Credit Facility and $30 million will be held by co-agent Viridescent. The loan is secured by first-lien mortgages on Acreage’s wholly owned real estate and other commercial security interests. AFC Agent LLC served as Administrative Agent for the transaction.
Kevin Murphy, the Chairman of the Board of Directors of Acreage, is the President and Chairman of the Board of Directors of Viridescent. Viridescent’s participation in the Credit Facility constitutes a “related party transaction” within the meaning of Multilateral Instrument 61‑101 ‑ Protection of Minority Security Holders in Special Transactions (“MI 61‑101”) of the Canadian Securities Administrators. Acreage relied on exemptions from the formal valuation and minority shareholder approval requirements of MI 61‑101. Acreage is exempt from the formal valuation requirement contained in sections 5.5(b) of MI 61-101 as Acreage does not have securities listed on a prescribed stock exchange. Acreage is exempt from the minority shareholder approval requirements pursuant to 5.7(1)(f) of MI 61‑101 as the related party’s participation in the Credit Facility is on the same terms as AFC Gamma, a person dealing at arm’s length to Acreage. The Credit Facility was negotiated between Acreage and AFC Gamma, is on reasonable commercial terms and neither the principal amount nor interest owing under the Credit Facility is convertible into, or repayable by issuance of, Acreage securities. The Credit Facility was approved by Acreage’s board of directors with Kevin Murphy recusing himself. Further details will be included in a material change report to be filed by Acreage. The material change report will not be filed more than 21 days prior to closing of the Credit Facility due to the timing of the concurrent announcement and closing of the Credit Facility.
In connection with the closing of the Credit Facility, Acreage amended the terms of its subsidiary’s $33 million credit facility announced on September 29, 2020 to: (i) extend the maturity date thereof from September 28, 2023 to April 1, 2026, and (ii) provide that interest accrued on or after December 1, 2022 may, at the borrower’s election, be paid in kind and added to the principal amount of the loan to be paid when the loan becomes due and payable or is repaid.
About Acreage Holdings, Inc.
Acreage is a multi-state operator of cannabis cultivation and retail facilities in the U.S., including the company’s national retail store brand, The Botanist. With its principal address in New York City, Acreage’s wide range of national and regionally available cannabis products include the award-winning The Botanist brand, premium brand Superflux in Illinois, Ohio and Massachusetts, the highly recognizable Tweed brand, the Prime medical brand in Pennsylvania, the Innocent brand in Illinois, and others. Acreage also owns Universal Hemp, LLC, a hemp subsidiary dedicated to the distribution, marketing and sale of CBD products throughout the U.S. Since its founding in 2011 Acreage has focused on building and scaling operations to create a seamless, consumer-focused, branded experience. Learn more at www.acreageholdings.com and follow us on Twitter, LinkedIn, Instagram, and Facebook.
For more information and documents related to the Acreage and Canopy Growth Corporation plan of arrangement, please visit: https://investors.acreageholdings.com/acreage-canopy-deal/
About AFC Gamma, Inc.
AFC Gamma, Inc. (NASDAQ:AFCG) is an institutional lender to leading cannabis companies with strong operations and cash-flow prospects, real-estate-security and other collateral, and locations in states with favorable supply/demand fundamentals and legislative environments. AFC Gamma’s platform provides innovative and customized financing solutions through first-lien loans, mortgage loans, construction loans and bridge financings. The senior-management team of the company has over 100 years of combined experience in investment management and disciplined credit investing across a range of economic cycles.
About Viridescent Realty Trust, Inc.
Viridescent Realty Trust, Inc. is a commercial real estate finance company focused on originating, structuring, underwriting, and managing senior secured loans for established companies that operate in the cannabis industry. With over 25 years of first-hand cannabis industry experience coupled with 75 years of combined experience in private credit, real estate lending, retail, real estate acquisitions and development, investment advice, risk management and consulting, Viridescent’ s broad knowledge and network in the cannabis industry position it to be a strategic and valued partner for providing customized and tailored financing solutions to the industry.
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