Cresco Labs Announces US$200 Million Senior Secured Credit Agreement

Cresco Labs (CSE: CL) appears to be burning through cash like a madman. The firm this morning announced that it was raising funds yet again, this time in via a senior secured term loan which has the optionality to be as large as US$200 million. The financing is through a “broad syndicate of lenders.”

Total up front cash available to Cresco Labs through the financing will total out at US$100 million, which the firm expects to draw on by January 30, 2020. The funds drawn will be put towards the expansion of the company’s Illinois operations, closing and integration costs of currently pending acquisitions, and for other strategic growth initiatives.

The financing follows a US$50 million leaseback transaction for its Lincoln, Illinois facility that occurred in December, along with a US$55 million at-the-market offering that was announced in the week prior, and a US$38 million leaseback arrangement for the firms Ohio assets in late November.

The latest financing, which will see an initial draw down of US$100 million, currently has an undisclosed term. The company identified that of the total US$200 million available, funds drawn down for a term of 18 months will see an interest rate of 12.7% per annum. Meanwhile, funds drawn down for a 24 month term will have an interest rate of 13.2%. Interest is payable quarterly in arrears in both instances.

Cresco Labs last traded at $8.30 on the CSE.

Information for this briefing was found via Sedar and Cresco Labs. 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.