A new line of credit is now at the disposal of Cresco Labs (OTC:CRLBF). 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.
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.