Heritage Cannabis Holdings entered into an 18-month non-revolving loan agreement with BJK Holdings in the amount of $7 million.
The loan is payable in full upon maturity of the loan, 18 months following the closing date, with monthly interest only payments made based on the outstanding balance of the loan, calculated monthly, in arrears. Monthly interest will be calculated at the Royal Bank of Canada prime lending rate plus 1.25%. A one-time setup fee of $965,000 is due to BJK on the closing date. The loan may be prepaid in full at any time without penalty.
A portion of the proceeds from the loan was used to repay all of Heritage’s credit facility obligations to Trichome Financial, which was set to mature in January of 2022. The total payout to retire the Trichome credit facility was approximately $4.7 million and includes accrued interest, voluntary prepayment fees and closing fees.
Heritage is a cannabinoid company focused on the production and sale of medical and recreational hemp-based and cannabis-based products and services. In Canada, Heritage operates through its subsidiaries Voyage Cannabis Corp. and CannaCure Corporation, both regulated under the Cannabis Act Regulations.
“With our positive long-term financial outlook, we are extremely pleased to be in a position to secure capital that increases our flexibility to grow our business internationally as a result of the improved terms over our prior loan arrangement and at the same time extends our re-payment date to October 2022 from January 2022,” Clint Sharples, CEO of Heritage, said. “In combination with our recent equity financing, we have strengthened our financial position and are poised for our product launches in the U.S. market. This new financing furthers our flexibility to execute our international strategy and allows for growth in a controlled but faster pace.”
“We have been following Heritage and their subsidiary Premium 5 for some time now and are excited to become their lending partner given that they are well on their way to establishing the company as a leader in the cannabis extract and extract derivatives space,” David Thiessen of BJK said. “We are confident in their ability to execute on their strategy and look forward to being a strong supporter and helping them as they expand their domestic presence internationally.”
