SLANG Worldwide Inc. (CNSX: SLNG) (OTCQB: SLGWF) announced the departure of several top executives and a new financing deal with Trulieve Cannabis Corp. (CSE: TRUL) (OTCQX: TCNNF) along with two existing significant shareholders, Pura Vida Investments and Seventh Avenue Investments for $17.3 million.
Slang’s CEO Chris Driessen has resigned and Drew McManigle has been appointed interim CEO and Chairman. McManigle also succeeds Peter Miller as Chairman of the Board and while Miller remains a director of the Company. Driessen has been with the company since its early days as the Organa Vape brand, which commanded a big market share in Colorado in the early days of adult-use sales. McManigle is the Founder and Chief Executive Officer of MACCO Restructuring Group, LLC and he plans on tapping Macco’s resources for rapid strategic reviews and business plan implementation.
In addition to those changes, Driessen, Chris Donnelly, Kelly Ehler, Keith Stein, and Robert Verdun have all resigned from the Board, effective immediately.
“I’m excited about the opportunity to lead SLANG and further develop its established operating platform in the cannabis industry. My focus is on assuring SLANG is both operating efficiently and profitably capitalizing on new growth opportunities” said interim CEO and Chairman Drew McManigle. “Our top priority is the evolution of SLANG and its strategic positioning. The concurrent financing round represents a vote of confidence from a leading industry partner, Trulieve, and two of our largest shareholders, Pura Vida and Seventh Avenue.”
Slang also decided to reduce its Oregon operations and will consolidate production to its Colorado facility. Thus, Slang is pivoting its strategic agenda and focusing on its core markets of Colorado and Vermont. McManigle is said to lead the company to success by leveraging its core platform to drive near-term profitability and tactfully guide the company’s long-term strategy in connection with his appointment.
Trulieve, Pura Vida, Seventh Avenue, and other investors will provide SLANG a loan of $17.3 million, which is subject to an original issue discount of 3% and will have a three-year term and a PIK interest rate of 9.75%, compounded quarterly, with the entire outstanding balance, including interest, becoming due and payable on third anniversary of the Loan Transaction . Additionally, SLANG will pay the Lenders an aggregate total amount equal to $3.6 million on the earlier of: (i) the Maturity Date; and (ii) any date of prepayment of the Initial Loan Amount. At least 50% of the loan proceeds will be allocated to the development of operations in Vermont to achieve long-term profitability and further execute strategic growth objectives.
“Our investment in SLANG underscores the success of our strategic partnership, as well as our commitment to providing the trusted and reliable brands our customers rely on,” said Kim Rivers, CEO of Trulieve. “Since beginning our exclusive partnership in Florida, we have been able to bring SLANG to additional markets, expanded into wholesale, and now look forward to continued growth at scale and mutual success as we strive to provide our customers with the highest-quality products and unparalleled experience they can expect at Trulieve.”