Red White & Bloom Raises $44.5M To Fund Expansion Initiatives In Michigan And Florida, Retires $7.7M in Debt

Cannabis company Red White & Bloom Brands Inc. RWB RWBYF has secured roughly $44.5 million in financing by completing three financing transactions.

Non-brokered "units for debt" private placement of units: The Toronto-based company raised CA$9,712,239 ($7,769,792) through a previously finalized non-brokered "units for debt" private placement of 8,445,426 units at CA$1.15 per unit.

Unsecured debenture private placement financing: RWB also secured $6.5 million upon closing an unsecured debenture private placement to an arm's length purchaser.

The debenture carries interest at the rate of 12% annually and will mature in 150 days from the date of issuance.

In return, RWB paid the purchaser an origination fee by issuing its 531,000 shares.

Strategic investment: On Friday, RWB's wholly-owned subsidiary, RWB Florida LLC, entered into agreements to raise some $30,234,224, including $11,337,834 investment into RWB Florida, from particular strategic investors.

Investors are entitled to a direct equity stake in RWB Florida in return.

Simultaneously, the investors have advanced $18,896,390 in subordinated debt to RWB Florida at an interest rate of 8%, due in three years.

What It Means For RWB: The Toronto-based company managed to provide roughly $36.8 million of new cash and retire $7.7 million in debt.

"As evidenced by today's announcement, we continue to demonstrate our ability to access the needed expansion and working capital, in the least dilutive possible manner to our shareholders, to execute on our strategy," Brad Rogers, RWB CEO and chairman said Monday.

The company is steadily building towards establishing itself in Michigan and plans to utilize this "cash injection" to "move aggressively towards taking control of our investment," Rogers continued.

RWB recently wrapped up the two-step application process for marijuana licensing in the Great Lake State through its wholly-owned subsidiary, RWB Michigan LLC., and cleared its path to control the assets from its investee and start with rebranding its existing stores in Michigan to High Times.

The move followed the launch of High Times branded THC at 23 retail locations (provisioning centers) across the state. Initially, an exclusive line of High Times branded cannabis products in Michigan was introduced in December.

Rogers also welcomed the company's new strategic investors in Florida and recently closed a $60 million purchase of Acreage Holdings Inc.'s ACRG ACRGF Florida operations.

Photo by Tim Foster on Unsplash