Columbia Care Inc. (OTCQX: CCHWF) has entered into an agreement with Canaccord Genuity Corp. to purchase for resale, on a bought deal private placement basis, 2,800,000 common shares at a price of C$9.00 per share for aggregate gross proceeds of C$25,200,000. It is expected that the offering will be primarily sold to one large institutional investor. The deal is expected to close on or about February 25, 2021. The net proceeds will be used for working capital and general corporate purposes.
The announcement comes days after equipment finance and leasing company XS Financial Inc. (OTCQB: XSHLF) said it had advanced approximately $3,200,000 to Columbia Care representing Columbia Care’s first and second drawdowns against the $5.0 million leasing facility announced on December 3, 2020. This second tranche has a term of 48 months.
At the time Joshua Snyder, VP Business Development of Columbia Care said, “This non-dilutive equipment financing from XS Financial provides us with increased flexibility and allows us to more quickly acquire and deploy cultivation and manufacturing hardware needed to increase our capacity in advance of market expansions and adult-use transitions. XS Financial has been a terrific partner ensuring that funding is properly matched to equipment needs at attractive rates, while freeing up our cash for acquisitions and other growth initiatives.”
David Kivitz, CEO of XS Financial said, “Our advances to Columbia Care demonstrate XS Financial’s ability to support industry-leading companies by rapidly deploying capital for equipment and CapEx. The amount announced today will finance the equipment Columbia Care needs for its operations in New Jersey, Virginia, Florida, and Massachusetts. We look forward to expanding our financing relationship with Columbia Care as they achieve significant growth and increase the depth of their nationwide footprint.”
The moves come on the heels of Columbia Care’s expansion into West Virginia. Just 10 days ago the company said it had been awarded five medical dispensary permits by the West Virginia Office of Medical Cannabis (“OMC”). Columbia Care said it currently holds one of only 10 cannabis processing licenses and one of 10 cultivation licenses, in addition to a hemp cultivation license. The OMC has also awarded a dispensary permit to Green Leaf Medical, the private cannabis multi-state operator that Columbia Care remains on track to acquire in Summer 2021 pending regulatory approval.
“We are grateful to the decision-makers in West Virginia, in particular the OMC, for selecting us to bring our high-touch patient-focused dispensary experience and premium product portfolio to best serve patients across West Virginia,” said Nicholas Vita, CEO of Columbia Care. “Being selected for up to six dispensary permits, as well as cultivation and processing licenses, is a great honor and enables us to pursue key retail and wholesale market opportunities within this limited-license state. In conjunction with our acquisition of Green Leaf, building out our vertically integrated West Virginia operations will further enhance our scale and footprint in the mid-Atlantic. We look forward to enhancing the lives of our West Virginia patients and, by doing so, solidifying our market-leading position in the region to continue to serve those who choose to include cannabis in their journey back to restored health and wellness.”
These permits will allow Columbia Care to operate retail dispensaries in the cities of Beckley, Fayetteville, Morgantown, St. Albans, and Williamstown, giving patients access to Columbia Care’s leading portfolio of pharmaceutical-grade products, and its wholesale partners, across the central and northern regions of the state. In addition, the company’s cultivation and processing capacity will also allow for a robust wholesale program that will bring Columbia’s products to the rest of the state. Green Leaf’s dispensary permit in Charleston will also deepen the company’s presence in the state’s capital and most populous city.