'The Next Evolution Of Cannabis Financing': Inside Harvest Health & Rec's $225-Million Loan

Last week, vertically integrated cannabis company Harvest Health & Recreation Inc. HARV HRVSF and investment firm Torian Capital Partners signed an agreement for $225 million in asset-backed financing. 

The loan is intended to fund rapid expansion as Harvest continues to build and acquire assets across the cannabis supply chain, both in retail and wholesale verticals across the U.S.

The company said it will also continue to invest in brands for broader distribution.

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The loan will be made available to Harvest in three tranches of $75 million each with similar terms and an 8% annual interest rate. It's secured by certain current and future assets of Harvest, including cannabis-related licenses.

The first tranche of the loan is expected to close within 30 days.

Inside The Deal

“We are providing capital to public and private platforms positioned for both near- and long- term growth. We recognize there is no other industry that exemplifies this sort of rapid expansion with opportunities to invest across the capital structure,” said David Kutcher, the chief investment officer and co-managing partner of Torian Capital.

Despite rapid growth in businesses and demand, cannabis companies have lacked access to large credit facilities for expansion, the CIO said. 

“In lending to Harvest, we’re providing lower-cost growth capital so that it remains one of the industry’s leading operators. This investment is part of the next evolution of cannabis financing for top-tier companies like Harvest. While the terms are favorable to Harvest compared to other recent industry deals, the notes are secured by the collateral value, quality of the management team and Harvest’s position as a true industry leader.”

Harvest CEO Steve White said he's pleased to work with Torian on the financing.

"With these proceeds, we will continue to expand our footprint and brand across the country.”

Harvest shares were down 1.49% at $5.64 at the time of publication Monday. 

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