22nd Century Group, Inc. XXII announced a new $21 million senior secured debenture financing to support increased working capital needs related to the significant growth outlook in both its VLN and GVB business lines. The new three-year financing was issued at 5% original issuance discount, will bear cash interest at a rate of 7% per annum, and commence principal amortization in the second year at a rate of 2% of the original balance per month. The company has the option to redeem the facility early starting in the second year.
The company is on track to launch VLN in up to 18 states by the end of 2023 with an expanded list of retail partners. 22nd Century’s GVB business is planning for rapid expansion in 2023, with both traditional ingredient sales activities and new CDMO opportunities to extend its leadership position in the growing hemp/cannabis industry.
“Customer demand for our high-quality CBD extracts and ingredients has scaled steadily, even after our Grass Valley fire last November. We believe that GVB is now the largest buyer of bulk CBD crude extract and seller of finished ingredients in North America. Our dominant position in ingredients has also increased demand for our CDMO capabilities with multiple leading consumer CPBD product brands wanting to centralize with a complete, vertically integrated solution from product design to finished goods and even retail category management through our increasing distribution capabilities,” stated James A. Mish, CEO.
In conjunction with the new credit facility, 22nd Century has also extended the maturity of $2.7 million in legacy seller notes assumed with its acquisition of GVB Biopharma to mid-2024.
Benzinga's Cannabis Capital Conference Is Back
The most successful cannabis business event in the world, the Benzinga Cannabis Capital Conference, returns to Miami for its 16th edition. This is the place where DEALS GET DONE, where money is raised, M&A starts, and companies meet investors and key partners. Join us at the Fontainebleau Miami Beach Hotel in Florida on April 11-12. Don’t miss out. Secure your tickets now. Prices will surge very soon.
Photo by Mackenzie Marco on Unsplash
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.