[[{“value”:”
SLANG Worldwide SLGWF, the cannabis company known for popular brands like O.pen and Firefly, is in the midst of a financial crisis, facing a $17.3 million debt repayment deadline on November 15, 2024.
The company announced a deal with its lenders, agreeing to pay $1.75 million upfront and provide frequent financial updates to avoid immediate action.
This situation goes back to a 2021 financing arrangement, where SLANG secured the $17.3 million loan from Trulieve Cannabis Corp. TCNNF, Pura Vida Investments, and Seventh Avenue Investments (the current ownership of this loan was not declared in the statement, and could have varied).
The funds were primarily intended to boost operations in Vermont, a key part of SLANG’s long-term growth strategy. However, the cannabis market‘s downturn since 2021 has derailed these plans.
As the debt deadline approaches, SLANG has admitted it may not be able to repay the loan in full. The company is now considering drastic measures, including selling assets, further downsizing, or potentially winding down its operations. Financial advisory firm B. Riley Farber Inc. has been hired to help guide SLANG through this critical period.
Read Next: Cannabis Companies Delisted From Major Stock Exchanges In 2024: What Went Wrong?
Financial Fragility
SLANG’s financial struggles were further highlighted in its second-quarter 2024 earnings report, which revealed a 26% year-over-year revenue drop to CA$6.28 million ($4,57 million). Declining sales in key markets, including a CA$1.27 million decrease in Vermont and a CA$0.51 million drop in Colorado, have significantly impacted the company’s cash flow.
In addition, SLANG reported a comprehensive loss of CA$11.5 million for the quarter, more than double the loss recorded in the same period of 2023. Gross profit fell by 38%, and cash reserves dwindled to CA$6.75 million, down from CA$9.04 million at the start of the year. CEO John Moynan acknowledged the challenges, stating that “increased competitive headwinds… have led to a decline in sales revenue, gross profit, and Adjusted EBITDA.”
Get Benzinga’s exclusive analysis and the top news about the cannabis industry and markets daily in your inbox for free. Subscribe to our newsletter here. You can’t afford to miss out if you’re serious about the business.
SLANG Stock Action
As of this writing, SLANG’s stock was trading 40.24% at $0058 per share at the close of the market on Thursday.
Market News and Data brought to you by Benzinga APIs
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
“}]] SLANG Worldwide faces a $17.3M debt deadline with a drop in revenue and cash reserves, forcing the cannabis giant to intensify restructuring Read More
