Cresco Labs (OTC:CRLBF) has tapped a fresh source of funding. The company announced Thursday morning that it has entered into an agreement with a syndicate of lenders for a senior secured term loan facility for up to $200 million.

The initial draw-down of up to $100 million should take place "on or about" Jan. 30, the company said. 

Marijuana buds atop a collection of US currency.

Image source: Getty Images

Each draw on the loan will be for a term of 18 months or 24 months, at the lender's discretion. The annual interest rates will start at roughly 12.7% for the former term, and around 13.2% for the latter. They will be payable quarterly in arrears.

Cresco said in the press release heralding the new monies that they are to be used to expand its presence in Illinois. This seems particularly well-timed, as on Jan. 1 the use and sale of recreational cannabis became legal in the state. 

The company is headquartered in Illinois, and while it has outlets throughout the country its footprint in its native state is relatively large. As of earlier this month, Cresco operated 10 dispensaries throughout Illinois.

The company touted the advantages of this type of fund-raising. "Through this deal, we have diversified the Company's funding sources, improved our cost of capital in a non-dilutive manner and given ourselves flexibility in a dynamic capital environment," it wrote.

Share dilution is a serious concern among marijuana company investors, who have seen the value of major holdings deteriorate with a raft of secondary stock issues throughout the industry. Any type of borrowing, of course, is not dilutive to a company's stock, although in this case there is sure to be concern about the double-digit interest rates.

For now, though, Cresco investors appear to be happy. The stock closed up by nearly 3.5% on Thursday.