SLANG Gets $17.3M From Trulieve And Other Investors, Says Goodbye To Five Directors

SLANG Worldwide Inc. SLNG SLGWF announced term-loan financing with Trulieve Cannabis Corp. TRUL TCNNF and two of its shareholders Pura Vida Investments and Seventh Avenue Investments for aggregate proceeds of $17.3 million. On Tuesday, the cannabis consumer packaged goods company also announced management changes, including a new interim CEO.

Loan Transaction Details 

At least 50% of the loan proceeds will be allocated to the development of operations in Vermont to achieve long-term profitability and further execute strategic growth objectives.

Under the terms and conditions of the loan transaction, Trulieve, Pura Vida, Seventh Avenue and other investors will provide SLANG a loan of $17.3 million, which is subject to an original issue discount of 3% and will have a three-year term and a PIK interest rate of 9.75%, compounded quarterly, with the entire outstanding balance, including interest, becoming due and payable on the third anniversary of the loan transaction.

Additionally, SLANG will pay the lenders an aggregate total amount equal to $3.6 million on the earlier of: (i) the maturity date; and (ii) any date of prepayment of the initial loan amount.

"Our investment in SLANG underscores the success of our strategic partnership, as well as our commitment to providing the trusted and reliable brands our customers rely on," Kim Rivers, CEO of Trulieve said. "Since beginning our exclusive partnership in Florida, we have been able to bring SLANG to additional markets, expanded into wholesale, and now look forward to continued growth at scale and mutual success as we strive to provide our customers with the highest quality products and unparalleled experience they can expect at Trulieve."

Board Changes 

In addition, the company's board of directors has appointed Drew McManigle as interim CEO and chairman of the board, effective November 15th. McManigle succeeds Chris Driessen as CEO, upon his departure from the company, and also succeeds Peter Miller as chairman of the board, while Miller remains a director of the company.

McManigle, founder and CEO of MACCO Restructuring Group, LLC, a middle-market focused interim leadership and financial advisory practice will have oversight over key strategic, operational and financial functions at SLANG as well as the added support of members of MACCO who will provide senior-level operating and financial expertise.

"I'm excited about the opportunity to lead SLANG and further develop its established operating platform in the cannabis industry,” McManigle said. “My focus is on assuring SLANG is both operating efficiently and profitably capitalizing on new growth opportunities. Our top priority is the evolution of SLANG and its strategic positioning. The concurrent financing round represents a vote of confidence from a leading industry partner, Trulieve, and two of our largest shareholders, Pura Vida and Seventh Avenue."

Reducing Oregon Operations 

SLANG has decided to reduce its Oregon operations and will consolidate production to its Colorado facility. Therefore, in the near term, the company is pivoting its strategic agenda and focusing on its core markets of Colorado and Vermont.

Price Action 

SLANG Worldwide’s shares traded 0.97% higher at 13 cents per share at the time of writing Tuesday morning. 

Photo: Courtesy of Elsa Olofsson on Unsplash