The extended maturity date to 2029 provides Green Thumb with a longer runway, alongside a generous interest rate.
Green Thumb Industries Inc. (CSE: GTII) (OTCQX: GTBIF) said it has closed on a $150 million syndicated credit facility, according to a news release Thursday.
The five-year facility, led by Valley National Bank, carries an interest rate of Secured Overnight Financing Rate (SOFR) plus 5%. In other words, the interest rate will fluctuate with a benchmark rate based on Treasury repurchase market transactions, plus a fixed 5 percentage point spread.
Green Thumb said it plans to use the proceeds, along with existing cash, to retire its $225 million senior secured debt due April 30, 2025.
“This financing is a first-of-its-kind credit facility for the U.S. cannabis industry,” CEO Ben Kovler said in a statement. “Green Thumb’s focus on cash generation and disciplined capital allocation led us to this pivotal point.”
The oversubscribed, non-brokered offering exclusively involving banks appears to be a departure from the usual high-interest, equity-dilutive financing options that have historically been available to cannabis companies. Notably, Valley National Bank also led a $71.5 million loan for Trulieve Cannabis Corp. in 2022, which carried a 7.53% interest rate for five years and was considered competitive at the time.
“The transaction did not involve the issuance of any Green Thumb equity to any of the participating banks,” the company said on Thursday.
The Chicago-based Green Thumb views the deal as a step forward for the sector. It plans to use the new financing to keep expanding its operations and invest in brand development, according to Kovler.
“This new capital funding further strengthens our already clean balance sheet for another five years,” he said.
John Meyer, senior VP of commercial banking at Valley National Bank, noted the arrangement reflects Green Thumb’s “strong reputation as both a market leader in the legal cannabis and as a company focused on the best use of capital to build sustainable growth, all while maintaining a strong balance sheet.”
[[{“value”:”The extended maturity date to 2029 provides Green Thumb with a longer runway, alongside a generous interest rate.
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