Cannabis Giant Green Thumb Secures $150M Credit Facility, 'Strengthens Our Already Clean Balance Sheet'

Green Thumb Industries Inc. GTII GTBIF, the owner of RISE Dispensaries announced on Thursday it has closed on a $150 million 5-year syndicated credit facility led by Valley National Bank, the principal subsidiary of Valley National Bancorp.

What Happened: The notes have a maturity date of Sept. 11, 2029 and will bear interest from the date of issue at a secured overnight financing rate (SOFR) + 500 basis points, payable quarterly.

The company said the transaction did not involve the issuance of any Green Thumb equity to any of the participating banks.

Why It Matters: The Chicago-based cannabis consumer packaged goods company plans to use proceeds along with existing cash to retire its $225 million senior secured debt due April 30, 2025.

Ben Kovler, the company's founder, chairman and CEO called the financing deal "a first-of-its-kind credit facility for the U.S. cannabis industry."

"This new capital funding further strengthens our already clean balance sheet for another five years," he said.

What's Next: "We plan to double down on our efforts to build brands that Americans love," Kovler continued. "Cannabis is a means toward more well-being, and we know Americans are craving well-being now more than ever. The future of America is more cannabis, and this debt arrangement allows us to invest in the future of America's well-being.”

Read Also: Green Thumb’s Q2 Revenue Soars 11% To $280M, Is Rising Cost Something To Watch?

• Get Benzinga's exclusive analysis and the top news about the cannabis industry and markets daily in your inbox for free. Subscribe to our newsletter here. If you're serious about the business, you can't afford to miss out.

Rumors Of Green Thumb And Boston Beer Merger

In June Green Thumb made headlines for expressing interest in merging with Boston Beer SAM, a move that has the potential to reshape the cannabis and beverage sectors.

A June 4th letter from Kovler to Boston Beer chairman Jim Koch expressed interest in a merger. The transaction would create a company with $3 billion in proforma 2023 revenues, with two-thirds from Boston Beer.

A report by Pablo Zuanic of Zuanic & Associates explained at the time that Boston Beer's revenues are projected to increase by 2% in 2024, while Green Thumb’s are expected to grow by 15%. Despite higher sales, SAM operates in a flat to declining industry, whereas Green Thumb is in a growth sector, as highlighted in a summary of Zuanic's report by  Benzinga's Nicolás Jose Rodriguez.

That said, Green Thumb’s net debt stood at $147 million at the end of 2023, while SAM had $298 million in cash and no financial debt. Zuanic said a cash offer for SAM would significantly increase Green Thumb’s leverage, making it an unlikely scenario. An equity-based offer, either 50/50 or 100%, would be more feasible and beneficial for both parties.

Read Next:

• Verano, Green Thumb & MariMed’s Strong Q2: Unpacking The Cannabis Earnings Surge

GTBIF Price Action

Green Thumb's shares traded 0.10% higher at $10.34 per share after the market close on Wednesday afternoon.