- Finalize the construction of a cultivation & processing center in Illinois & a new processing kitchen in Missouri.
- Expanding existing facilities in Massachusetts and Maryland.
- Funding other capital expenditures.
- Reimbursing the Kind Therapeutics seller notes completely from the Maryland purchase in April 2022, with the remaining balance used for investments.
“This credit allows us to accelerate the completion of our expansion projects. As a result, we believe we will drive meaningful returns soon,” said Susan Villare, MariMed’s Chief Financial Officer. “Including this structure, our blended interest rate of 10.5% and Debt/EBITDA ratio of 1.5X stay among the lowest in the cannabis sector. It speaks to the strength of our balance sheet and capacity to generate significant positive cash flow from operations.”
The credit facility has a three-year maturity that can extend to five years under certain conditions. The facility’s rate is floating based on the bank prime rate plus 5.75%. It includes 30% warrant coverage priced at a 20% premium. MariMed’s Debt/EBITDA ratio based on the midpoint of the company’s 2022 annual EBITDA guidance is now 1.5X. The company can repay the principal loan balance without penalty after the first 20 months.
Chicago Atlantic served as the main organizer along Silver Spike Investment Corp. for the senior secured credit facility, and the former also acts as the manager of the credit facility. Besides, echelon Capital Markets provided financial advice to MariMed during the setup of the senior secured credit facility.
MariMed’s new cultivation and processing facility in Illinois and new processing kitchen in Missouri will help to expand the company’s operations and increase production capacity. In addition, expanding existing facilities in Massachusetts and Maryland will also help boost the company’s presence in these critical markets. The funds from the credit facility will also repay the Kind Therapeutics seller notes from the Maryland acquisition in April 2022, and the company will use the remaining balance for purchases.