Columbia Care Advances Financial Strategy with $25 Million Private Placement

NEW YORK – Columbia Care Inc., a cultivator, manufacturer, and retailer of cannabis products in the U.S, has embarked on the next stage of its strategy to enhance its balance sheet, commencing with a private placement agreement to improve its financial stability and pave the way for further growth.

A Structured Financial Initiative

The New York-based company announced on Monday that it has entered into subscription agreements with several institutional investors for the sale and purchase of 22,244,210 units, each priced at C$1.52, amounting to gross proceeds of about C$33.8 million or approximately US$25 million, marked as the initial tranche in this offering.

Adding a layer of flexibility, the investors retain an option to purchase additional units equivalent to US$25 million at the issue price within a 45-day window post the agreement date, as specified in the Investor Option clause. This transaction is accompanied by a registration rights agreement and entails limited lock-up provisions for the units involved.

Preparing for Future Financial Adjustments

Simultaneously, Columbia Care is actively engaging with investors concerning the potential repurchase of up to US$25 million in the principal amount of the 6.0% senior secured convertible notes due by June 2025. This transaction, which proposes payment through the company’s common shares, hinges on the finalization of necessary documentation and the receipt of requisite regulatory approvals.

Furthermore, the company is navigating through discussions aiming at facilitating a debt exchange, potentially allowing holders of the 13% senior secured notes due May 2024 to transition into 9.5% senior secured notes due February 2026, a move reflecting the company’s proactive approach to debt management.

Details of the Private Placement Offering

Within the structure of this private placement offering, each unit comprises one common share or its equivalent and a half common share purchase warrant. These warrants empower the holders to acquire additional common shares at a price of C$1.96 each, presenting a premium of 29% to the issue, and remain valid for three years following the closure of the initial tranche and the investor option.

Slated for a closure around September 21, 2023, this offering is set to be utilized to decrease the company’s outstanding debt and cater to other corporate needs, thus representing a well-rounded strategy to foster financial health and resilience.

The common shares involved in this private placement are yet to be registered under the Securities Act of 1933 or the securities laws of other relevant jurisdictions and, therefore, their offering or sale in the U.S or to U.S persons remains restricted until the necessary registrations or exemptions are secured.