Please ensure Javascript is enabled for purposes of website accessibility

Cresco Labs Closes $100 Million Credit Facility

By Eric Volkman – Feb 3, 2020 at 5:37PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The minimum interest of loans from the facility is around 12.7%.

A new line of credit is now at the disposal of Cresco Labs (CRLBF -9.30%). The company announced Monday it has closed a credit facility from which it will initially draw down $100 million.

Cresco first announced in January it was arranging the facility. The credit is being provided by what the company terms "a broad syndicate of lenders."

These include institutional investors, the company added, plus a number of its managers and members of its board of directors. It did not further identify any of those parties, although it did say the terms were negotiated at arm's length -- in other words, with all parties acting and deciding independently.

Two hands holding marijuana leaves.

Image source: Getty Images.

The facility takes the form of a senior secured term loan, with an aggregate principal amount of $100 million and a mutual option to expand that figure up to $200 million. Draw-downs can have either an 18- or 24-month term. The interest rates are around 12.7% for the former, and approximately 13.2% for the latter. 

In its latest press release on the credit facility, Cresco said its monies will be used "to fund the expansion of operations in Illinois, closing and integration costs associated with pending acquisitions, and other strategic growth initiatives in key markets."

The company is headquartered in Illinois, where recreational cannabis was recently legalized and where the drug has experienced heavy demand. Like other marijuana companies, Cresco has been an active acquirer of assets in an attempt to build scope and scale. Last month it announced that it had closed its buyout of West Coast cannabis manufacturer and distributor Origin House.

Cresco stock closed down by slightly over 2% on Monday.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Cresco Labs Inc. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Cresco Labs Inc. Stock Quote
Cresco Labs Inc.
$2.73 (-9.30%) $0.28

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.