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Home Deal Announcements

Chicago Atlantic Closes Senior Secured Financing to S1 Enterprises, Parent Company of Illicit Cannabis

The deal financed a rare, large-scale ESOP transaction in the cannabis sector, giving more than 500 employees an ownership stake while reshaping the company’s capital structure for long-term growth.

byRita Garwood
January 23, 2026
in Deal Announcements, News

Chicago Atlantic acted as joint lead arranger and administrative agent on a senior secured credit facility to S1 Enterprises. The Company is the parent of Illicit, a vertically integrated cannabis operator with established operations in Missouri and New Jersey.

Proceeds from the transaction will be used to finance the sale of 100% of the company’s equity to an Employee Stock Ownership Plan (ESOP). The ESOP encompasses the company’s Missouri and New Jersey operations, creating a long-term ownership pathway for more than 500 employees and aligning the Company’s financial future with the people who helped build it from the ground up. As a 100% ESOP-owned S Corporation, the company will benefit from tax-exempt status, generating a meaningful increase in cash flow that will be reinvested into continued growth, innovation, and enhanced employee benefits.

“Partnering with S1 Enterprises and the Illicit team on one of the largest ESOP transactions in the U.S. cannabis industry was a significant milestone for us,” said David Kite, Managing Partner at Chicago Atlantic. “Their proven operational discipline, leading brand platform, and commitment to employee ownership align well with our long-term lending philosophy, and we’re proud to support Illicit as a long-term partner.”

“This transaction represents a defining moment for Illicit and our entire team,” said Nate Ruby, CEO of S1 Enterprises. “Becoming a 100% employee-owned company reinforces our belief that the people who built this business should directly participate in its long-term success. Partnering with Chicago Atlantic allowed us to execute a complex ESOP transaction with a capital partner who understands our industry, our growth ambitions, and our commitment to our employees. This structure strengthens our balance sheet, enhances cash flow, and positions us to continue investing in our people, our brands, and our operations across Missouri and New Jersey.”

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