Acreage Holdings (OTC:ACRGF) announced Friday that it has secured commitments for up to $200 million in new financing.
The company opened a $100 million credit facility with a "well-capitalized institutional lender" that it did not name. The funds will be made available in three tranches, the first of which is to be a $49 million draw-down expected to occur this month. The annual interest rates are 2.55% for the first year, 1.25% for the second, and a rate to be negotiated for the third. Interest will be payable monthly.
Additionally, Acreage has taken out a $50 million private loan with an entity called IP Investment Company. Details regarding this entity were not provided, but $21 million of the total is being provided to IP Investment Company by Acreage CEO Kevin Murphy.
Finally, the company is selling up to $50 million worth of so-called "special warrants" in a private placement. These are priced at $4.93 apiece, and will be automatically exercised into "units" of the company. Each unit comprises a single subordinate voting share of Acreage, plus one warrant to buy a subordinate voting share at a price of $5.80 within five years of the placement's closing.
After closing, the lead subscriber of this warrant issue will have the option of buying up to $20 million in additional special warrants.
Acreage said all net proceeds from these sources will be used for "working capital and general corporate purposes."
The company stressed that as none of this funding comes from the sale of new stock, it will not be dilutive to current shareholders. Additionally, it said its potential buyout by marijuana industry peer Canopy Growth "is not impacted" by the moves.
Acreage shares were down by almost 7% at the close of Friday trading.