Verano Strengthens Financial Foundation with New Credit Facility
Company draws US $50,000,000 to retire US $50,000,000 of its existing senior secured credit facility.
CHICAGO — Verano Holdings Corp. (Cboe CA: VRNO) (OTCQX: VRNOF), recognized as a leader in the multi-state cannabis industry, has successfully closed a credit agreement with Chicago Atlantic Admin, LLC, backed by participation from a regional bank, which establishes a revolving credit facility of US $75,000,000. This new financial arrangement underscores Verano's commitment to solidifying its financial stability.
Upon the closing of the Revolver, Verano drew US $50,000,000 to repay an equal amount of higher interest debt linked to its existing senior secured credit facility. Notably, this repayment incurred no prepayment penalties, allowing the remaining US $25,000,000 to be earmarked for strategic initiatives that align with the company’s growth objectives.
Unlocking Opportunities
The newly established Revolver is secured by selected real estate, paving the way for various financial advantages. Among these benefits are reduced borrowing costs, flexible repayment options, and the potential to release specific properties as collateral under favorable conditions.
CEO Insights on the New Facility
“This $75 million revolving credit facility marks a key initiative in enhancing our balance sheet and accessing more affordable debt,” stated George Archos, who is both the founder and CEO of Verano. “Utilizing our owned real estate strategically will not only bolster our financial fundamentals but also equip Verano to seize forthcoming market opportunities.”
Details of the Revolver
The terms of the Revolver include:
- A floating annual interest rate on amounts drawn, equivalent to SOFR plus 6%, with a minimum floor of 4% for SOFR.
- The absence of mandatory amortization payments, providing the necessary flexibility as needed.
- A maturity date set for September 29, 2028, with the option to repay in increments of US $2,500,000, subject to an interest-only make-whole provision if repaid before the six-month anniversary of funding.
- The option to request the proportional release of certain real estate, provided that the outstanding principal does not exceed 60% of the appraised value of the pledged real estate.
Industry Recognition and Support
Peter Sack, Managing Partner of Chicago Atlantic, expressed pride in supporting Verano with this adaptable financing solution, noting its reflective strength across various markets. He highlighted that revolving credit facilities are not uncommon in sectors beyond cannabis, but Verano's facility stands out as potentially the largest among U.S. operators, allowing for efficient management of higher-cost debt.
About Verano
Verano Holdings Corp. (Cboe CA: VRNO) (OTCQX: VRNOF) is pioneering in the U.S. cannabis industry, known for its extensive revenue history, broad geographic reach, and outstanding brand performance. The company focuses on delivering a premium cannabis retail experience in both medical and adult-use markets through its dispensaries including Zen Leaf™ and MÜV™. Additionally, its innovative Cabbage Club™ membership program provides exclusive benefits to cannabis customers. Verano prides itself on offering a wide array of high-quality, licensed cannabis products under well-respected brands like Verano™, Essence™, MÜV™, Savvy™, and others, operating in 13 U.S. states with over 1.1 million square feet designated for cultivation.
Frequently Asked Questions
What is the purpose of the new credit facility for Verano?
The credit facility aims to strengthen Verano's financial position by repaying existing higher-interest debt and providing funds for strategic initiatives.
How much is Verano's new revolving credit facility worth?
The facility is valued at US $75,000,000, with US $50,000,000 drawn immediately to repay existing debt.
What benefits does the new credit facility offer?
It offers lower borrowing costs, payment flexibility, and the option to release certain real estate as collateral, enhancing overall financial options.
Who are the partners involved in this credit agreement?
The credit agreement is agented by Chicago Atlantic Admin, LLC, with support from a regional bank, highlighting collaboration in financing.
Where does Verano operate?
Verano has active operations across 13 U.S. states and runs multiple production facilities, ensuring a strong market presence.
