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Green Thumb Industries Inc. (CSE:GTII) (OTCQX:GTBIF), the owner of RISE Dispensaries announced on Thursday it has closed on a $150 million 5-year syndicated credit facility led by Valley National Bank, the principal subsidiary of Valley National Bancorp.
What Happened: The notes have a maturity date of Sept. 11, 2029 and will bear interest from the date of issue at a secured overnight financing rate (SOFR) + 500 basis points, payable quarterly.
The company said the transaction did not involve the issuance of any Green Thumb equity to any of the participating banks.
Why It Matters: The Chicago-based cannabis consumer packaged goods company plans to use proceeds along with existing cash to retire its $225 million senior secured debt due April 30, 2025.
Ben Kovler, the company's founder, chairman and CEO called the financing deal "a first-of-its-kind credit facility for the U.S. cannabis industry."
"This new capital funding further strengthens our already clean balance sheet for another five years," he said.
What's Next: "We plan to double down on our efforts to build brands that Americans love," Kovler continued. "Cannabis is a means toward more well-being, and we know Americans are craving well-being now more than ever. The future of America is more cannabis, and this debt arrangement allows us to invest in the future of America's well-being.”
Read Also: Green Thumb’s Q2 Revenue Soars 11% To $280M, Is Rising Cost Something To Watch?
In June Green Thumb made headlines for expressing interest in merging with Boston Beer (NYSE:SAM), a move that has the potential to reshape the cannabis and beverage sectors.
A June 4th letter from Kovler to Boston Beer chairman Jim Koch expressed interest in a merger. The transaction would create a company with $3 billion in proforma 2023 revenues, with two-thirds from Boston Beer.
A report by Pablo Zuanic of Zuanic & Associates explained at the time that Boston Beer's revenues are projected to increase by 2% in 2024, while Green Thumb’s are expected to grow by 15%. Despite higher sales, SAM operates in a flat to declining industry, whereas Green Thumb is in a growth sector, as highlighted in a summary of Zuanic's report by Benzinga's Nicolás Jose Rodriguez.
That said, Green Thumb’s net debt stood at $147 million at the end of 2023, while SAM had $298 million in cash and no financial debt. Zuanic said a cash offer for SAM would significantly increase Green Thumb’s leverage, making it an unlikely scenario. An equity-based offer, either 50/50 or 100%, would be more feasible and beneficial for both parties.
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Green Thumb's shares traded 0.10% higher at $10.34 per share after the market close on Wednesday afternoon.