Harvest Health and Recreation (CSE: HARV) announced this morning that it had secured a loan for $225 million from that of Torian Capital Partners. The secured loan will allow Harvest to expedite its expansion plans across the United States.
Set to be delivered in three tranches of $75 million, the terms are said to be “substantially identical” for each tranche. Taking the form of secured notes issued by subsidiaries of Harvest Health, the capital will go towards strategic acquisitions, working capital, and general corporate purposes.
“This transaction positions us well for the strategic acquisition of assets across the cannabis supply chain. With greater financial flexibility, we are better equipped to execute our strategy to aggressively expand our retail and wholesale footprint across the U.S. into key markets, while seeking to build and acquire brands for broad distribution.”
Steve White, CEO of Harvest
The secured notes will have a term of four years from the date of issuing, bearing interest at a rate of 8% per year, payable quarterly in arrears. The company will have the options to prepay the loans after twenty four months, upon payment of 105% and 103% of the loan in years three and four respectively.
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Torian is also to receive from Harvest Health warrants that are the equivalent of 20% of each tranche, which will bear a 25% premium to the closing day’s price prior to issuance. With a term of 36 months from issuance, the warrants may be called by Harvest upon certain conditions being met.
The loan will be secured by certain current and future assets of Harvest Health, which includes cannabis licenses.
The first tranche of $75 million is expected to occur within thirty days. There was no indication of a timeline for when the second and third tranche of the loan will occur.
Harvest Health closed yesterdays session at $6.82.
Information for this analysis was found via Harvest Health & Recreation. 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.
