Acreage Holdings (CSE: ACRG.u) has retired its debt from a short term funding agreement entered into in June. The agreement, which saw the company borrow $15 million from an institutional investor, saw an interest rate of an astounding 60% per annum, demonstrating just how high the cost of capital is for certain multi state cannabis operators in the US.
At the time of issuance, the debt was for a period of four months, with the company able to pay off the debt without penalty on the 90th day following closing. With an issuance date of June 17, it appears that the debt was paid off right on time, with the company announcing today it had repaid $18 million in aggregate funds to settle the debt. Notably, had the payment been missed, the loan would of been subject to an additional fee of $6 million.
With the debt being repaid, security is believed to have been released on the firms Illinois, New Jersey, Florida, as well as its US intellectual property. The company also notes that with the debt repaid, it “realigns Acreage’s capital structure and significantly reduces the amount of debt outstanding.”
Acreage Holdings last traded at US$2.83 on the CSE.
Information for this briefing was found via Sedar and Acreage Holdings. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.