Verano Archives - Green Market Report

This story was republished with permission from Crain’s Chicago and written by Laura Bianchi.

Sammy Dorf is co-founder of Chicago-based Verano Holdings (OTC: VRNOF), one of the largest cannabis companies in the nation, boasting more than 120 dispensaries in 13 states, 14 cultivation and production facilities, and nearly 4,000 employees. Dorf, 38, and his wife live in the Gold Coast neighborhood and just had their first child, a boy, in late February.

How did you get into the cannabis business?

In 2009, I was researching pain remedies for my parents, who both had cancer, and I came across cannabis. Around that time, a college buddy opened a dispensary in Colorado, and I was following the industry growth. I thought, “Holy shit, this is going to be game-changing.”

How do people react to your chosen field?

Initially, they would say, “Are you in a band?!” But now that cannabis is more accepted, most people are just intrigued.

Are you optimistic that Congress will pass the SAFE Banking Act, allowing banking services and financing for cannabis companies?

I hope to see some form of legislation this year or next. I am encouraged by the support from both parties and the momentum in the country. Some states that never had legal cannabis now have medical licenses. Some states with medical programs added recreational sales. No state has gone backwards.

A major turning point?

Winning my first cannabis license in 2014 at 29 years old. A lot of people thought I was crazy. They said, “You’re not politically connected. You don’t have the capital.” But it worked out all right.

An embarrassing career moment?

When I was 17, my dad got me a job at a Chicago-based hedge fund, but I flunked the drug test and got fired because I had very high THC in my hair. I really dreaded making that call to my dad.

How did he react?

He was pretty cool about it. He asked me what I had learned. I told him I would never apply for a job again that requires a cannabis test!

What sparked your entrepreneurial spirit?

My dad. He was a trader at the Chicago Board of Trade for 31 years, which is entrepreneurial in a sense, and he owned currency exchanges. I clerked for him (at CBOT) during summers. Plus, growing up in Deerfield, I knew a lot of people who started their own businesses.

Worst job ever?

When I was 16, I worked at a car wash in Highland Park. They made me clean the toilets and all the big SUVs. I quit after three weeks.

Do you ever clean toilets now?

My wife would say, “Hell no.”

On what do you splurge?

I collect pop and abstract art, mostly from Chicago-based artists, such as Ty Nitz and Lefty Out There. Nitz recently created a personalized mural for us, including our second home in New Buffalo, (Mich.) and the band, Phish.

Verano now has 119 dispensaries in operation.

Verano Holdings Corp. (CSE: VRNO) (OTCQX: VRNOF) has entered into a credit agreement to refinance its existing $350 million credit facility, extending the maturity date to October 30, 2026. Refinancing comes amidst the company’s new legal battles with its spurned acquisition of Goodness Growth. 

Verano said that the decision to refinance the debt would give the company more flexibility in how it manages its debt. For example, it has $120 million in third-party mortgages secured by real estate that is currently unencumbered. In addition to that, a $100 million accordion under the new credit facility is to be funded at the option of the existing lenders, and a $50 million third-party revolving credit facility upon the passage of cannabis banking legislation.

The refinanced indebtedness bears interest at a floating rate based on the prime rate, with a current rate of 12.75% per annum.

“We’re pleased to continue our partnership with Chicago Atlantic as our credit facility Agent and as a Lender, extending the maturity and securing terms we believe are favorable during this rising interest rate environment,” said George Archos, Chairman, Chief Executive Officer and Founder of the Company. “Importantly, we maintained flexibility around prepayments and the ability to incur additional debt which we believe adds significant value to the deal, especially given the legislative environment that has seen positive momentum build in support of cannabis policy and banking reform. Since Verano’s inception, we have taken a conservative approach to our balance sheet, including avoiding sale leasebacks, which has allowed us to leverage our real estate to bring down our blended cost of debt. This refinancing enables us to continue a selective approach to further strategic opportunities as we position our company for the future.”

Additionally, under the new credit facility, Verano can elect to prepay up to $100 million of outstanding indebtedness at any time by incurring a prepayment fee of $1 million.  Archos is participating in the credit facility as a lender.

The stock fell 2% on the news to lately sell at $5.38.