One Of Analysts' Favorite Marijuana Stocks Says Farewell To Debt, Closes $58.7M Refinancing Deal

Author: Jelena Martinovic | November 20, 2023 12:55pm

MariMed Inc. (CSE:MRMD) (OTCQX:MRMD) announced on Monday that it closed a $58.7 million secured credit facility with a U.S. chartered bank on Nov. 17, 2023.

Refinancing Deal Highlights

A 10-year, $58.7 million construction to permanent commercial real estate mortgage loan.
Interest at a lower fixed rate. After the first five years, the rate will be reset for the remaining 5 years.
Interest-only payments for the first 12 months. After the first 12 months, payments will be based on a 20-year amortization schedule.
The loan is secured solely by the company’s Maryland and Massachusetts operating assets and real estate holdings.
The company’s other operating assets and key brands such as Betty’s Eddies and Nature’s Heritage are now unencumbered with the payoff of the Chicago Atlantic term loan.
The terms of the transaction do not include warrants or other equity or dilutive instruments.

Why It Matters

Jon Levine, MariMed’s CEO said the closing of the debt refinancing would “generate significant cash savings.”

The loan proceeds were used to pay off the existing term loans with Chicago Atlantic and Bank of New England and a seller's note from the Ermont acquisition, which in the aggregate totaled approximately $46.8 million.

“By paying off the Chicago Atlantic loan, we were also able to unencumber our operating assets in Illinois, Ohio, and Delaware, as well as our branded products, providing additional levers for future term loans at attractive rates if we choose,” Levine continued. “Additionally, the credit facility bolsters our ability to continue executing our strategic plan, particularly as it relates to growing the Company through mergers and acquisitions.”

What’s Next

The remaining funds will be held in escrow by the lender to complete the expansion of the company’s Hagerstown, Maryland cultivation facility.

Any unused proceeds will be released to the company after completion of the cultivation facility expansion.

“There are many attractive opportunities for accretive deals to be made in our industry, and we intend to explore any that will increase shareholder value,” Levine said.