Green Ivy Capital Lends $23.5M To Vireo In Debt Financing Deal

Cannabis company Vireo Health International Inc. VREO VREOF has secured some $23.5 million in financing through a credit facility with a Green Ivy Capital affiliate.

The Minneapolis-based company confirmed Friday closing the first tranche of the previously-announced senior secured delayed draw term loan with Chicago Atlantic Group, amounting up to $46 million.

The loan is non-convertible and has a three-year term. In addition, it carries interest at the rate of 13.25% per annum, payable in cash on a monthly basis and 2.75% per annum in monthly PIK interest.

Vireo disclosed its plans to use the first tranche to fund its current growth initiatives and working capital.

"This facility allows Vireo to continue pursuing first-mover advantages in markets where we see potential for revenue growth and margin expansion, beginning with incremental expansion projects at our cultivation facilities in Arizona and Maryland planned for the second quarter,"chairman and CEO Kyle Kingsley noted.

2020 Highlights And 2021 Outlook

According to its latest earnings report, Vireo generated $49.2 million in GAAP revenue in 2020, representing a 64% increase compared to 2019.

Fourth-quarter GAAP revenue grew 38% year-over-year to $12.4 million, including its Pennsylvania cultivation and retail operations, which are sold to Jushi Holdings Inc. JUSH JUSHF over the second half of 2020.

Kingsley expects fiscal year 2021 tol highlight the "strong upside potential" of the business, whereas 2020 was focused on executing "core market strategy." 

Vireo also confirmed its intentions to launch "incremental expansion projects" in its facilities in both Arizona and Maryland during the second quarter.

Last month, the company's partner, Arizona Natural Remedies Inc., finalized the nine-acre expansion of its cultivation and processing facility located in Tuscon's vicinity, which is poised to boost its cannabis flower output.