Vireo Health International closed on the first tranche of its previously-announced senior secured, delayed draw term loan with Chicago Atlantic Group, an affiliate of Green Ivy Capital, and a group of lenders. The first tranche of $23.5 million, net of fees and closing costs, will be utilized to support Vireo’s ongoing growth initiatives and working capital requirements.
“We’re very pleased to formalize our relationship with Chicago Atlantic Group as we continue expanding our operations and prepare our business for stronger growth as our markets transition from medical to adult-use programs,” Kyle Kingsley, MD, chairman and CEO of Vireo Health International, said. “This facility allows Vireo to continue pursuing first-mover advantages in markets where we see potential for revenue growth and margin expansion, beginning with incremental expansion projects at our cultivation facilities in Arizona and Maryland planned for the second quarter.”
The facility is non-convertible with a three-year term, has an aggregate principal amount of up to $46 million, and will bear interest at a fixed annual rate of 13.625%, payable monthly in cash and 2.75% per annum in monthly PIK interest. The lenders and Chicago Atlantic Group will receive warrants at an aggregate rate of 30% coverage based on the gross amount of each tranche advanced, with a warrant strike price equal to the volume weighted average trading price of Vireo’s stock for the 10 days prior to closing. Additional advances under the facility are subject to the discretion of the lenders and the proceeds may be used for approved acquisitions or other purposes approved by the lenders.
Vireo Health International is a physician-led cannabis company.
