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Cannabis firm Acreage gets $100 million credit facility from AFC Gamma, Viridescent Realty -Breaking

by Mike Robinson

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© Reuters. FILE PHOTO – Cannabis stickers in a Weed World shop window, New York State, are shown on the day New York State legalized recreational use of marijuana amid the COVID-19 pandemic, New York City’s borough, New York. This was March 31, 2021.

(Reuters) – U.S. marijuana firm Acreage Holdings Inc (OTC) Inc announced on Thursday that it secured a credit line of $100 million from Viridescent Realty Trust and cannabis REIT AFC Gamma Inc. This indicates growing investor optimism in a market still under-financed by traditional lenders.

Expectations for policy changes that include federal decriminalization are raising prospects for the U.S. Cannabis industry. Analysts estimate it currently has $24 billion annual sales. This could double in the coming decade.

AFC Gamma committed $60 million to the senior secured loan facility. Viridescent contributed $30 million and $10 million respectively.

AFC Gamma said that there is an additional $50 million option in the credit line once certain milestones are reached.

Leonard Tannenbaum is AFC Gamma’s chief executive officer. He stated, “We believe Acreage has a strong position in high-growth markets that have limited licenses such as New York, New Jersey and Ohio, along with other states.”

Acreage stated that it plans to make use of the proceeds from its new credit facility in order to pay off existing debt and fund expansion projects. As of September 30, its total debt was $142.6 million.

This facility will pay interest at 9.75% annum and be payable in arrears monthly with a maturity date Dec. 1, 2025.

For 2019, Canopy growth (NASDAQ) Corp secured a purchase right for Acreage at $3.4 Billion once cannabis is legalized in America.

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