Zenabis Global (TSX: ZENA) has secured a second non-dilutive loan agreement. After initially signing a loan agreement with Tilray’s High Park Holding’s subsidiary at the start of July, the firm has managed to secure a second agreement similar in nature.
This time to the tune of $10 million, the non-dilutive loan comes from that of Starseed Medicinal, a Canadian licensed producer based in Bowmanville, Ontario. Under the terms of the loan, Zenabis Global will provide Starseed with dried cannabis flower or trim over the next 18-24 months as a form of repayment for the loan. Delivery is expected to occur in October 2019 for both recently signed supply agreements.
The timing of the delivery terms for both the Tilray agreement as well as the Starseed agreement is believed to line up with expected licensing at Zenabis’ Langley facility. The firm is expecting to receive its expansion licensing in the near term, which will add an estimated 80,100 kg of annual production to the firms total capacity.
“We are excited to supply Starseed and its unique sales channels with our high-quality dried cannabis and trim products. Zenabis has successfully obtained $40 million in non-dilutive financing through pre-paid supply agreements, which we estimate to be sufficient to achieve our planned 131,200 kg of cannabis cultivation capacity expected to occur this quarter and, as a result, we no longer intend to draw on the existing $60 million unsecured convertible debenture facility to fund such expansion or working capital. We look forward to delivering on our commitments to Starseed and to fulfilling the needs of all or counterparties and the communities in which we operate.”
Andrew Grieve, Chief Executive Officer of Zenabis
Aside from the amount of the large loan, no financial data was given on the loan. It is unknown at what price per gram the agreement was secured at, or what interest rate may be in effect, similar to that of the agreement between Zenabis and Tilray.
This loan agreement now brings the total to $40 million in recently secured funding by Zenabis that consists of zero dilutive financing. As a result, the company does not believe that it will be required to draw on its $60 million unsecured convertible debenture which was originally announced in March.
Information for this briefing was found via Sedar and Zenabis Global. 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.
