Verano, a multi-state cannabis company, closed a credit agreement agented by Chicago Atlantic Admin, with participation from a regional bank, to provide the company a revolving credit facility of $75 million. Upon closing the revolver, the company drew $50 million to pay down $50 million of higher interest rate debt from its existing senior secured credit facility without incurring any prepayment penalty, with the remaining $25 million being available to fund strategic initiatives.
The revolver, which is secured by selected real estate, provides Verano a range of benefits including lower cost debt, payoff and redraw flexibility, and optionality to have certain real estate released as collateral under the revolver.
“Closing the $75 million revolving credit facility demonstrates our focus on fortifying the balance sheet, accessing lower cost debt, and leveraging our owned real estate to strengthen our foundation and position Verano to take advantage of future opportunities,” George Archos, founder and CEO of Verano, said. “We view today’s closing as another important step forward in executing our capital and finance strategy that will benefit Verano, our employees and shareholders in the long-term, and we look forward to making continued progress as we explore opportunities in the market.”
Details of the revolver are as follows:
- A floating annual interest rate on amounts drawn equal to SOFR plus 6% (subject to a 4% SOFR floor).
- No required amortization payments over the course of the revolver.
- Matures on Sept. 29, 2028, allowing for repayment at any time in $2.5 million increments, subject to an interest-only make-whole if repaid before the six-month anniversary of funding.
- The proportionate release of certain real estate upon request and so long as the outstanding principal balance under the Revolver does not exceed 60% of the appraised value of the remaining pledged real estate.
“Chicago Atlantic is proud to support Verano with this flexible financing solution which reflects Verano’s strength across its markets,” Peter Sack, managing partner of Chicago Atlantic, said. “Revolving credit facilities are common financial solutions outside of the cannabis industry, and Verano’s revolver is what we believe to be the largest such facility among U.S. operators in the history of the industry, granting the company the dynamic ability to deploy and reduce higher-cost leverage as needed.”
