Greenlane Holdings, Inc. (NASDAQ: GNLN) has parted ways with its President Aaron LoCascio and has accepted an $8 million bridge loan from LoCascio to support organic growth initiatives at the company. LoCascio is the company’s co-founder, a board member, and one of its largest shareholders. LoCascio helped found the company in 2007 and was the CEO of Greenlane in 2018 prior to the merger with KushCo. According to the company’s annual report, LoCascio received $380,000 in salary in 2020, plus $342,000 in option awards.
The bridge loan will mature on June 30, 2022, and bears interest at 15% per year. Greenlane said it is in the process of procuring and evaluating proposals for a long-term asset-based loan (ABL) to support its long-term financing needs in a non-dilutive manner. The company said it expects to arrive at a decision sometime in Q1 2022.
“It’s been a wonderful 16 years starting, pioneering, and scaling Greenlane into the preeminent ancillary cannabis leader it is today,” said Mr. LoCascio. “Since the closing of the merger, I remain Greenlane’s biggest fan and have become more excited than ever at the potential for the company to reach new heights that it possibly could not have achieved on its own. We have unprecedented scale, a leading portfolio of proprietary brands, significant potential revenue and cost savings synergies, and a talented and driven team that all make for a promising future for the Company. It is with great enthusiasm that I now support the Company in a ‘behind-the-scenes’ role-as its lender and one of its largest shareholders-while continuing to work with the rest of the Board to help management execute its profitable growth strategy and drive higher returns for shareholders.”
In addition, Greenlane reported that co-founder Adam Schoenfeld will transition from his current Chief Strategy Officer role to Chief Marketing Officer, eliminating the former position, effective December 31, 2021. The company believes that this appointment better streamlines the organization reduces overhead costs, and allows for a more focused marketing direction and department to help propel Greenlane’s proprietary brands under the leadership and expertise of Mr. Schoenfeld.
Kovacevich continued: “In just four months following the close of the merger, we have made tremendous strides in our integration and cost saving initiatives, streamlining the organization and reducing our cost structure through headcount reductions as well as vendor and infrastructure consolidations. We’re pleased to have already achieved $8 million in cost saving synergies, which gives us confidence to hit our previously announced guidance of $15 million to $20 million of cost saving synergies, while making meaningful inroads in our cross-selling strategies to propel our Greenlane Brands to new heights in 2022 and 2023. We believe all of these initiatives set us up to achieve adjusted EBITDA profitability in the fourth quarter of 2022, giving us a strong and profitable position to scale from in 2023.”