Acreage Shares Slightly Up On Securing Up To An Additional $50M In Its Credit Facility And Deal With Canopy

AFC Gamma, Inc. AFCG has amended its previously announced $150 million credit facility with Acreage Holdings, Inc. ACRHF ACRDF ACRG ACRG

Under the terms of the amended credit facility, an additional $25 million is now available for immediate draw by Acreage, with a further $25 million available in future periods under a committed accordion option upon achieving certain predetermined milestones. The terms of these additional draws replace the prior $50 million accordion option. The amended credit facility now includes a variable interest rate equal to U.S. prime plus 5.75 % per annum, payable monthly in arrears, with a prime floor of 5.50%. Acreage intends to use the proceeds to fund expansion initiatives and provide additional working capital.

Steve Goertz, CFO of Acreage, stated, “The amended terms to the credit facility align with current market conditions and will allow Acreage to strengthen our balance sheet as we scale our core footprint, particularly in the Northeast. This infusion of capital comes at an opportune time as we elevate our cultivation and wholesale abilities in New Jersey and cement our presence in the upcoming adult-use markets in Connecticut and New York. We are thrilled that AFC Gamma and Viridescent continue to show their confidence in our growth potential and remain valuable partners.”

AFC Gamma has committed to up to $90 million under the amended credit facility, with an additional commitment of up to $15 million syndicated to an affiliate and the remaining $45 million committed by Viridescent Realty Trust, Inc. The facility is secured by first-lien mortgages on Acreage’s owned real estate properties and other commercial security interests.

Acreage and Canopy Enter Into New U.S. Strategic Arrangement

Acreage has entered into an arrangement agreement with Canopy Growth Corporation CGC WEED and Canopy USA, LLC, CGC’s newly-created U.S. domiciled holding company, pursuant to which, subject to approval of the holders of the class D subordinate voting shares of Acreage and the terms and conditions of the floating share agreement, Canopy USA will acquire all of the issued and outstanding floating shares by way of court-approved plan of arrangement for consideration of 0.4500 of a common share of Canopy in exchange for each floating share. The floating share arrangement represents a premium of 17.2% to the floating shares based on the volume weighted average prices of the floating shares and Canopy shares for the 30-day trading period ending on October 24, 2022, on the Canadian Securities Exchange and Nasdaq Global Select Market, respectively.

Peter Caldini, CEO of Acreage, stated, “The entering into of the floating share agreement with Canopy is a logical next step for Acreage, as we have completed a major transformation of our business over the last few years, delivering profitability, and focusing on expanding our business in highly attractive Northeastern markets in preparation for considerable industry growth. The integration of Acreage into Canopy’s U.S. ecosystem will allow shareholders of both companies to participate in this strategic market opportunity with aligned interests.”

Price Action

Acreage Holdings shares were trading 5.18% higher at $0.69 per share at the time of writing Tuesday morning.

Photo: Benzinga; Sources: courtesy of Kindel Media via Pexels

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