Cansortium Expands Financial Flexibility with New Credit Deal

Cansortium Inc. Secures New Senior Credit Agreement

Recently, Cansortium Inc. (CSE: TIUM), a prominent player in the cannabis industry operating under the FLUENT™ brand, completed a significant financial move by entering a new senior secured credit agreement amounting to up to $96,500,000. This agreement was finalized with Chicago Atlantic Admin, LLC, who acted as the administrative agent for a group of lenders. The beneficial terms of this agreement offer a cash interest rate of 12.00% per annum, combined with a paid-in-kind interest rate of 1.00%. Notably, this credit agreement is set to mature on a future date, ensuring ample time for Cansortium to leverage these funds.

Refinancing Existing Debt

This new credit facility effectively refinances an earlier $71,000,000 term loan due to mature much sooner. The new agreement eliminates the need for Cansortium to prepay anything upon completing its business combination with RIV Capital Inc. (CSE: RIV). The timely closure of these regulatory approvals is paving the way for the combination to occur soon. This restructuring emphasizes the company’s strategic foresight in managing its financial obligations while preparing for growth opportunities in a competitive market.

Strategic Growth and Future Plans

Robert Beasley, the CEO of Cansortium, expressed enthusiasm over the refinancing, indicating that it not only enhances their capital flexibility but also protects shareholder interests. The company plans to leverage these funds towards future growth initiatives, particularly targeting important cannabis markets such as Pennsylvania and New York. The influx of cash from the RIV Capital merger, combined with the additional credit lines from this agreement, is expected to bolster Cansortium’s ability to pursue acquisitions and expansion strategies vigorously.

Additional Credit Lines and Financial Covenant

Under the new credit agreement, Cansortium has access to two additional credit lines which include $10,000,000 specifically for real estate investments and a further $15,000,000 for potential acquisitions of RIV Capital’s operations. This broad financial support allows the company to pursue strategic real estate and operational enhancements smoothly. The credit agreement also binds Cansortium to maintain an unrestricted cash balance of at least $4,500,000, tested quarterly. This minimal financial requirement is intended to safeguard the lenders and indicate sound financial health during market fluctuations.

Acknowledgments from Chicago Atlantic

Peter Sack, Managing Partner at Chicago Atlantic, has praised Cansortium for its calculated and responsible approach to growth within pivotal states. Chicago Atlantic’s firm endorsement speaks volumes regarding Cansortium's operational capabilities and customer focus as they prepare for their next phase of growth.

Understanding the Smith Transaction

As part of the financial maneuvers, Cansortium has also negotiated an amended agreement with a party associated with the company’s Executive Chair, William Smith. This newly structured agreement involves a cash fee and issuance of a secured convertible note, providing additional financial mechanisms to support Cansortium's capital structure. This agreement underscores Cansortium's commitment to transparency and proper governance as they navigate their affiliated agreements.

About Cansortium Inc.

Cansortium Inc. operates as a vertically-integrated cannabis company with licenses across multiple states. The firm is proud of its commitment to quality and is known for maintaining high operational standards in cultivation, production, and distribution. With headquarters based in Florida, Cansortium aims to become a cannabis provider of choice in the markets it serves.

Company Contact

CEO: Robert Beasley
Investor Relations: investors.getfluent.com

Media Contact

Trailblaze: FLUENT@Trailblaze.co

Frequently Asked Questions

What is the purpose of the new credit agreement?

The new credit agreement provides Cansortium with essential financing for refinancing existing debt and supporting future acquisitions and growth initiatives.

How much is the new credit agreement worth?

The new agreement is valued at up to $96,500,000.

Who facilitated the credit agreement?

The credit agreement was facilitated by Chicago Atlantic Admin, LLC, acting as the administrative agent for the lenders involved.

What does the refinancing mean for Cansortium's debts?

This refinancing eliminates immediate repayment obligations and extends the maturity of debts, giving Cansortium more time to grow without financial pressure.

What markets is Cansortium targeting for growth?

Cansortium is focusing on expanding its presence in key markets such as Pennsylvania and New York while exploring other emerging cannabis opportunities.

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