Cannabis Wheaton Income Corp. and Beleave Inc. (OTCQX: BLEVF) announced that they have signed an agreement where Cannabis Wheaton will provide Beleave with up to $10 million in debt financing. The debt obligation will be known as a D.O.P.E. Note or debt obligation repayable in product equivalents. The proceeds will be used by Beleave to pay for the construction of an expansion of the company’s current facility outside of Hamilton, Ontario.
“Everyone at Beleave is thrilled to embark on this new partnership, and we expect it will yield outstanding results for all sides. It was a truly enjoyable experience working with an incredibly diligent and forward-thinking team at Cannabis Wheaton on this transaction,” said Bojan Krasic, Chief Financial Officer of Beleave.
Under the terms of the note, Cannabis Wheaton will advance Beleave $5 million and then provide another $5 million for up to two years from the closing date. Beleave will repay the note by giving Cannabis Wheaton a portion of the gross proceeds received from the retail or wholesale sale of cannabis produced at any of its cultivation facilities. This translates into roughly proceeds from the sale of 1,275,125 grams of cannabis. According to the statement, “The Note is repaid in full, the proceeds from 85% of all Grams sold by Beleave will be delivered to CW as payment against the outstanding principal of the D.O.P.E. Note. If the D.O.P.E. Note is not repaid in full prior to the Maturity Date, any principal amount outstanding at such time will be automatically increased by 10% and the Maturity Date will be extended by 6 months.”
The Cannabis Wheaton team is constantly looking for creative solutions to provide additional value to our streaming partners and we view the D.O.P.E. Note as another tool for the company to utilize in furtherance of that goal. It was a pleasure working with the incredible group of industry professionals who form the Beleave team to develop this industry-first D.O.P.E. Note,” said Chuck Rifici, Chief Executive Officer of Cannabis Wheaton. “We view this transaction as the first milestone towards a long working relationship as we move forward to the larger, previously announced streaming transaction with Beleave to finance the build-out of a third proposed production facility and add further scale to the Beleave platform. We fundamentally believe this transaction is accretive to both our shareholders as well as Beleave’s shareholders and it will result in a true win-win.”