It’s time for your Daily Hit of cannabis financial news for December 13, 2021.
On The Site
Glass House Brands Inc. (OTCQX: GLASF) (OTCQX: GHBWF) has entered into a senior secured term loan agreement with a U.S.-based private credit investment fund for up to $100 million, with an initial draw of $50 million. Glass House said that the initial term loan has a variable interest rate currently set at 10% per annum, and in no event shall be more than 12% per annum. The money will be used to fund the phased retrofit of the company’s approximately 5.5 million square feet cultivation facility currently under renovation in Camarillo, California and for general corporate purposes.
Pfizer Inc. (NYSE: PFE) is buying Arena Pharmaceuticals, Inc. (Nasdaq: ARNA) in an all-cash transaction valued at $6.7 billion. Arena is a clinical-stage company developing innovative potential therapies for the treatment of several immuno-inflammatory diseases. Arena gets pulled into the cannabis industry through its drug Olorinab or APD371, which is an oral Crohn’s disease pain drug that targets the CB2 receptor of the naturally occurring cannabinoid receptor system in our bodies. Olorinab (APD371) is an investigational, oral, peripherally acting, highly selective, full agonist of the cannabinoid type 2 receptor (CB2). Arena is exploring the drug for development in several indications, with an initial focus on visceral pain associated with gastrointestinal disorders. The company said that this compound, through its selectivity for CB2 versus CB1, is under investigation for pain relief without psychoactive adverse effects.
COMPASS Pathways plc (Nasdaq: CMPS) announced positive results from its exploratory study of COMP360 psilocybin therapy in conjunction with SSRI use. The study wanted to test whether patients with treatment-resistant depression could tolerate and do well with psilocybin treatments while also taking regular depression medicine.
“The results of this study challenge the widely-held belief that the use of SSRI medication together with psilocybin could interfere with psilocybin’s therapeutic effect. Our findings provide a strong signal that COMP360 psilocybin therapy could be an adjunctive treatment to SSRI antidepressants as well as a monotherapy. For some patients with treatment-resistant depression, withdrawal is a difficult step even though, by definition, ‘treatment-resistant’ means that those antidepressants are not working. This is exactly why we conduct rigorous research to help guide our clinical trial design – including addressing barriers to adoption of COMP360 therapy,” stated Guy Goodwin, Compass Pathways’ Chief Medical Officer. “We are now looking forward to meeting with the FDA early in the new year in light of these new data to finalize our plans for the phase III program, which we expect to begin in Q3 2022.” Compass has Breakthrough Therapy designation with the FDA.
In Other News
Curaleaf Holdings, Inc. (CSE: CURA / OTCQX: CURLF) has received commitments for a private placement of 8.0% Senior Secured Notes due 2026 for aggregate gross proceeds of $425 million. In addition, the Indenture permits up to an additional US$200 million of senior bank financing. Curaleaf intends to use the net proceeds from the Offering to refinance existing indebtedness, for working capital, and to pay transaction fees and expenses. The Notes will mature on December 15, 2026. The Offering is expected to close on December 15, 2021, subject to customary closing conditions.
“We are pleased to announce what we believe is the largest debt financing of any publicly-traded MSO to date,” said Joseph Bayern, Chief Executive Officer of Curaleaf. “This offering will allow us to refinance our existing debt at a materially lower interest rate and provides us with additional financial flexibility to execute our strategic growth initiatives. While this initial offering provides more than enough liquidity to refinance our existing debt and meet current needs, the new Indenture provides us a new degree of flexibility to raise debt financing to ensure we have ample liquidity to meet our needs now and into the future.”
Fire & Flower
Fire & Flower Holdings Corp. (TSX: FAF) (OTCQX: FFLWF) announced it has entered into a loan agreement with 2707031 Ontario Inc., an indirectly wholly-owned subsidiary of Alimentation Couche-Tard Inc. to which ACT shall loan to the company a maximum aggregate amount of $30,000,000 which may be drawn down in three separate tranches of $10,000,000. Subject to the terms of the Agreement, the Loan will accrue interest at a rate of 8.0% per annum, payable quarterly, and matures on October 1, 2022. The Agreement contemplates prepayment of amounts drawn from the net proceeds received by Fire & Flower upon the exercise of Series B Warrants held by ACT which become exercisable by ACT as of January 1, 2022 until September 30, 2022. The company intends to use the amounts drawn down under the Loan to further develop the consumer digital platform as well as for general corporate purposes. The loan is secured by the assets of the Company.