Trulieve Borrows $350M To Repay Harvest Health's Debt, Expands Partnership With Bhang

Trulieve Cannabis Corp. TRUL TCNNF announced Thursday it has obtained commitments for a private placement of 8% senior secured notes due 2026 for aggregate gross proceeds of $350.0 million.

Canaccord Genuity Corp. will act as sole agent and sole bookrunner. The offering is expected to close on Oct. 6.

The Tallahassee, Florida-based cannabis company plans to use the net of the offering to redeem outstanding indebtedness of Harvest Health & Recreational upon completion of the company's acquisition of Harvest, and also for standard corporate practices.

"We are pleased to announce this debt financing, which we believe is the largest to date of any public U.S. cannabis operator," Kim Rivers, CEO at Trulieve stated. "Our strong balance sheet and profitability allowed us to secure a cost of senior debt which we believe is the lowest for a public cannabis company to date. This financing will provide capital to retire a portion of Harvest's debt when we complete our acquisition and will allow us to use our combined cash on hand to aggressively pursue strategic growth initiatives across key markets post-closing."

The notes will be senior secured obligations of the company and will rank pari passu with the senior secured outstanding notes of the company maturing in 2024. They will bear interest at a rate of 8% per annum and mature on October 6, 2026.

Trulieve has made the required filings to list the notes to be issued pursuant to the offering on the CSE following the expiry of the four-month Canadian statutory hold period.

Expanding Partnership With Bhang

The news of the offering comes on the heels of Trulieve’s announcement of the expanded partnership with Bhang Inc. BHNG BHNGF, a cannabis edibles producer. The two companies confirmed Thursday they have signed an expanded licensing agreement to manufacture and distribute Bhang's THC-infused chocolate products in all Trulieve markets.

Initially, the products will be produced and distributed in the Florida and Massachusetts markets. In addition to being available in Trulieve's dispensaries, the products will also be sold through Trulieve's robust sales and distribution efforts.

Bhang products available through Trulieve include Dark Chocolate Bars, Milk Chocolate Bars, Caramel CBD/THC 1:1 Dark Chocolate, Caramel Mocha Milk Chocolate, and Cookies & Cream White Chocolate.

"We could not be more excited to work with Trulieve's amazing team to offer Bhang's globally-recognized, award-winning gourmet chocolate products to their markets," Jamie L. Pearson, president & CEO of Bhang said in a statement. “We value our partnership - which began in Florida in 2018 - and would like to congratulate Kim Rivers, Trulieve CEO, and her team for elevating our industry every day with their outstanding progress."

Price Action

Trulieve’s shares closed Thursday market session 0.11% higher at $26.91 per share.

Photo: Courtesy of Pepi Stojanovski on Unsplash