Cannabis lending group Pelorus Equity Group closed on its previously announced $77.3 million non-dilutive real estate debt financing with Harborside Inc. (CSE: HBOR) (OTCQX: HBORF). The initial funding of $45.35 million, the first of two planned tranches, includes three individual loans to Harborside, Urbn Leaf Holdings Inc., and Loudpack JV Corporation. The company said the proceeds will be used primarily to retire certain existing loans and provide additional working capital.
“We are extremely proud to be an important partner during this transformational event in the California market,” said Dan Leimel, CEO of Pelorus Equity Group, and manager of the Pelorus Fund. “The impact of the StateHouse Holdings transaction will be hugely beneficial towards the overall development of the legal cannabis space within the state of California. By partnering with leading companies in the space we have expanded the lending options available for cannabis operators and become the preferred partner for some of the largest players in the industry with our flexible capital and solutions for complex transactions.”
The money will clearly go towards Harborside’s acquisition of Urbn Leaf, and Loudpack. Once that is completed Harborside is expected to be renamed StateHouse Holdings.
“We are pleased to welcome Pelorus as our financial partner as we combine operations with Loudpack and Urbn Leaf to create StateHouse Holdings, a new market leader in California,” said Matt Hawkins, Chairman and interim CEO of Harborside Inc. “Pelorus’s willingness and ability to work with us to customize the financing was critical in enabling us to ideally structure our transactions, illustrating why they are the go-to player in cannabis finance.”
“The growth that Pelorus has seen over the past two years has been incredible, and seeing this loan, the first in our new lower cost stabilized lending program, come to fruition is a great day for us,” said Travis Goad, managing partner of Pelorus Equity Group. “We expect this new program will be a best-in-class option for operators and look forward to driving the progression of the market by collaborating with companies to develop effective and price sensitive solutions.”
Pelorus said that the second tranche of the Rollup Financing will be funded upon completion of the StateHouse Holdings Transaction and at a time of StateHouse Holdings choosing. The Rollup Financing contains a nominal interest rate of 10.25%, along with specified origination, closing and other transaction fees, and will be secured by certain real estate assets and cannabis licenses of Harborside, Urbn Leaf and Loudpack.