Cansortium, a vertically integrated, multi-state cannabis company operating under the FLUENT brand, closed on a new senior secured credit agreement of up to $96.5 million with Chicago Atlantic as administrative agent for certain lenders. The credit agreement bears a cash interest rate of 12.00% per annum and paid-in-kind (PIK) interest of 1.00% per annum, and is due to mature on Nov. 26, 2028._x000D_
_x000D_
The credit agreement refinances the existing $71 million senior secured term loan that was set to mature May 29, 2025, thereby eliminating the previously disclosed requirement that the company prepay $10 million upon the consummation of the business combination with RIV Capital. All required regulatory approvals needed for the business combination with RIV Capital have been obtained, and the company expects the closing with RIV Capital to occur in early December 2024._x000D_
_x000D_
“We are excited to announce the successful completion of our senior secured refinancing. The loan’s favorable interest rate and single financial covenant underscore our strong financial standing, while its non-dilutive structure, free of equity or warrants, preserves shareholder value. As a result of this transaction, we have no material debt maturities until late 2028,” Robert Beasley, CEO of Cansortium, said. “The refinancing includes access to two additional credit lines totaling $25 million, which, combined with the cash balance inflow from the RIV business combination, positions us to enter 2025 with a robust war chest. These resources will allow us to pursue strategic acquisitions and growth initiatives in key markets like Pennsylvania and New York, while also targeting new opportunities in emerging high-growth states. With our solid foundation and this enhanced financial flexibility, we are poised to capitalize on exciting industry developments at the state and federal levels. The future for our company, and our shareholders, has never been brighter.”_x000D_
_x000D_
The credit agreement provides for an initial loan of $71.5 million and access to two additional credit lines of $10 million for future real estate acquisitions and construction projects, and $15 million in the event that the company were to acquire RIV Capital’s Buffalo cultivation and processing facility following the completion of the business combination._x000D_
_x000D_
“Cansortium has executed with prudence and foresight in its core states of Florida, Pennsylvania and Texas, and we have every confidence in their strategic approach to meet demands in additional markets,” Peter Sack, managing partner of Chicago Atlantic, said. “They are innately focused on customer experience, fiscal responsibility and operational excellence, and Chicago Atlantic is thrilled to support their next phase of growth.”_x000D_
_x000D_
The credit agreement includes a single financial covenant requiring Cansortium to maintain a minimum unrestricted cash balance of $4.5 million, tested at the end of each fiscal quarter, and includes customary terms and conditions for a financing of this type, including repayment obligations upon the occurrence of certain events of default thereunder._x000D_
_x000D_
Chicago Atlantic Credit Advisers served as lead arranger for the credit agreement and Chicago Atlantic Admin served as administrative agent for the credit agreement.
Forward for Specialty Finance
