Cannabist Secures $25.75 Million in Convertible Debentures
The TDR Three Takeaways for the Cannabist
- Cannabist Company completes a $25.75 million financing deal, strengthening its financial position.
- The financing includes convertible debentures, enhancing Cannabist Company’s capital structure.
- Proceeds aim at debt repayment and supporting Cannabist Company’s operational growth.
The Cannabist Company (Cboe CA: CBST, OTC: CBSTF), previously known as Columbia Care, is acquiring $25.75 million through the issue of senior secured convertible debentures due in 2027. This transaction included a brokered offering worth $19.5 million, combined with a non-brokered offering. Furthermore, a portion of the funds, specifically $6.25 million, was used to exchange and nullify existing 6% senior secured convertible notes set to mature in 2025, previously held by selected offshore institutional investors.
The debentures are slated for maturity in March 2027, with an option for early conversion or repurchase. They offer a conversion rate that represents roughly a 25% premium over the Cannabist Company’s common share price as of March 14, 2024. This arrangement suggests a mutually beneficial prospect for both the company and its investors, potentially encouraging further investment into the company’s equity.
This financing is aimed at providing the Cannabist Company with the necessary capital to manage its debts effectively, including the repayment of the company’s 13% senior secured notes due in May 2024, and to support working capital and other corporate needs. It reflects the company’s strategic approach to financial planning and its commitment to sustaining growth and operational efficiency.
Operating in multiple U.S. jurisdictions, the Cannabist Company is an integrated company in the cannabis sector, offering a broad spectrum of products and services that span cultivation, manufacturing, and retail, supported by a solid technological infrastructure. The capital will buy time for the company as it awaits regulatory changes that should allow potential for significant growth. Want to keep up to date with all of TDR’s research and news, subscribe to our daily Baked In newsletter.
