Cannabis firm Acreage gets $100 mln credit facility from AFC Gamma, Viridescent Realty

Acreage Holdings

16/12/2021 22:34

Dec 16 (Reuters) - U.S. cannabis firm Acreage Holdings Inc
 ACRGau.CD  said on Thursday it had secured a $100 million
credit line from cannabis REIT AFC Gamma Inc  AFCG.O  and
Viridescent Realty Trust, indicating growing investor optimism
in a sector still underfinanced by traditional lenders.
    Expectations of policy changes including federal
decriminalization have raised prospects for the U.S. cannabis
industry, which analysts have estimated is currently worth $24
billion in annual sales and could triple in size over the next
decade.
    AFC Gamma has committed $60 million under the senior secured
credit facility, with $10 million syndicated to an affiliate and
the remaining $30 million committed by Viridescent. 
    The credit line also includes an option for a further $50
million once certain milestones are achieved, AFC Gamma added.  
    "We believe Acreage is well positioned in high-growth,
limited license markets such as New York, New Jersey, Ohio and
Pennsylvania, amongst others," Leonard Tannenbaum, AFC Gamma's
chief executive officer, said.
    Acreage said it intends to use proceeds from the new credit
facility to repay existing debt, fund expansion initiatives and
provide additional working capital. Its total debt as of Sept.
30 stood at $142.6 million.
    The facility will bear interest at 9.75% per annum, payable
monthly in arrears, with a maturity date of Dec. 1, 2025.   
    In 2019, Canopy Growth Corp  WEED.TO  had secured a right to
buy Acreage for $3.4 billion once the United States legalizes
the production and sale of cannabis.

 (Reporting by Arunima Kumar in Bengaluru; Editing by
Ramakrishnan M.)
 ((Arunima.Kumar@thomsonreuters.com; Twitter: https://twitter.com/Aru_Kumar94))