WeedMD, a federally-licensed producer and distributor of medical-grade cannabis, entered into a credit facility of up to $39 million of secured debt financing with Bank of Montreal. Under the terms of the facility, the financing will be provided at a rate of interest that is expected to average in the low-to-high 5% per annum range over a three-year term.
The facility consists of a $33.1 million term loan, a $3 million equipment term loan and a $3 million revolving credit facility, all of which will mature in 2022. WeedMD may, at its discretion, repay the balance of the loans without penalty at any time during the term.
Concurrently, WeedMD exercised its option to purchase the Health Canada-licensed, 98-acre Strathroy property from Perfect Pick Farms, which includes a licensed, 610,000 square foot state-of-the-art hybrid-greenhouse and 100,000 square feet worth of ancillary structures, as well the 50 acres of land upon which the company intends to cultivate outdoor cannabis.
“Securing BMO’s support at this exciting juncture in WeedMD’s growth provides market validation in our ability to continue to execute our strategic plan with non-dilutive financing,” said Keith Merker, CEO of WeedMD. “In 2018, it took us just six months to retrofit, license and bring the first phase of our state-of-the-art greenhouse online. Less than three months later, we took down our first harvests with very compelling yields and quality. We’ve since continued to expand our licensed footprint and operations across the greenhouse and have recently announced our plans for outdoor cannabis cultivation onsite, which we expect to double our production potential with a low-cost scalable expansion.”
The credit facility is secured by the company and its subsidiaries, including WeedMD’s production facilities in Strathroy, Ontario and Aylmer, Ontario, and contains customary financial and restrictive covenants.
