While many have complained of capital drying up in cannabis, Jushi Holdings Inc. just upsized its round of financing due to new investors. The company announced the receipt of $35.65 million in proceeds and $9.56m of exchanged debt in connection with its previously announced debt financing.
Jim Cacioppo, Chairman, and CEO of Jushi Holdings Inc. stated, “We are pleased with the upsizing of our financing providing working capital that will allow Jushi to continue making progress on its growth objectives and expansion efforts into 2020 and beyond. This capital will support our continued investment in each territory we are currently operating in, positioning Jushi to achieve $200 to $250 million in revenue in 2021.”
Jushi has received cash proceeds of $35.65m for debt financing. Additionally, $9.56m of debt assumed in Jushi’s acquisition of TGS Illinois Holdings, Inc. has been exchanged into the Warrant Notes with a slightly different redemption right. Including this exchanged debt, the total debt issued in Jushi’s debt financing is approximately $47 million
Terms of the Deal
Investors were given two financing structures. The first structure was a senior secured promissory notes that will mature on January 15, 2023, will bear interest at 10.0% per annum, payable in cash quarterly, and are issued with warrants to acquire Class B Subordinate Voting Shares of the Company at 75% coverage. The Warrants have an expiration date of December 23, 2024, and an exercise price of ~US$1.58 (~CAD$2.08 as of December 23, 2019). The second structure was original issue discount senior secured promissory notes maturing on January 15, 2023. The OID Notes will bear interest at 10.0% per annum, payable in cash quarterly. The combined annual yield on the OID Notes totals 17%. In addition to the maturity dates, both structures have the same key terms. The Company’s obligations under both the Warrant Notes and the OID Notes are secured by the assets of the Company and certain of its Subsidiaries (subject to certain exclusions) and are guaranteed by certain Subsidiaries.