Verano Refinances $350 Million Credit Facility with Significant Optionality to Bolster Strategic Growth Plans
CHICAGO – Verano Holdings Corp. (CSE: VRNO) (OTCQX: VRNOF), a multi-state cannabis company, today announced it has entered into a credit agreement to refinance its existing $350 million credit facility, extending the maturity date to October 30, 2026. The refinanced indebtedness bears interest at a floating rate based on the prime rate, with a current rate of 12.75% per annum.
The refinanced facility provides the Company flexibility to secure additional future indebtedness of up to $270 million, comprised of $120 million in third-party mortgages secured by real estate that is currently unencumbered, a $100 million accordion under the new credit facility to be funded at the option of the existing lenders, and a $50 million third-party revolving credit facility upon the passage of cannabis banking legislation, in each case subject to certain conditions. The ability to incur an additional $120 million in the indebtedness secured by real estate that is currently unencumbered is expected to enable the Company to lower its blended total cost of debt. The Company believes the potential $50 million revolving credit facility could be obtained on improved terms if cannabis banking legislation becomes effective. Additionally, under the new credit facility, Verano can elect to prepay up to $100 million of outstanding indebtedness at any time by incurring a prepayment fee of $1 million. George Archos, Chairman, Chief Executive Officer and Founder of the Company, is participating in the credit facility as a lender.
“We’re pleased to continue our partnership with Chicago Atlantic as our credit facility Agent and as a Lender, extending the maturity and securing terms we believe are favorable during this rising interest rate environment,” said George Archos, Chairman, Chief Executive Officer and Founder of the Company. “Importantly, we maintained flexibility around prepayments and the ability to incur additional debt which we believe adds significant value to the deal, especially given the legislative environment that has seen positive momentum build in support of cannabis policy and banking reform. Since Verano’s inception, we have taken a conservative approach to our balance sheet, including avoiding sale-leasebacks, which has allowed us to leverage our real estate to bring down our blended cost of debt. This refinancing enables us to continue a selective approach to further strategic opportunities as we position our company for the future.”
John Mazarakis, Partner of Chicago Atlantic, added, “It’s been exciting to see Verano’s continued execution on its strategic vision, and we welcomed the opportunity to continue our partnership as Agent and lead Lender, a Lead Arranger, and Administrative Agent. Our syndicate of participants, including partners such as Silver Spike Capital, represents the most trusted and dependable capital providers in the industry, dedicated to supporting the sector’s strongest operators. Verano is one of the few U.S. multi-state operators able to attain this cost of capital in a rapidly rising interest rate environment, driven by its margin profile and strong operating performance. The structuring of the new credit facility allows Verano the flexibility to manage down its overall cost of capital and potentially expand the facility depending on market conditions and growth opportunities.”
ATB Capital Markets Inc. and Chicago Atlantic Advisors, LLC acted as Lead Arrangers for the senior secured credit facility. Chicago Atlantic is also the Administrative Agent for the credit facility.
Forward Looking Statements
This press release contains certain “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking statements are not representative of historical facts or information or current condition, but instead represent only the Company’s beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of the Company’s control. Generally, such forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “future”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or may contain statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “will continue”, “will occur” or “will be achieved”. The forward-looking statements contained herein include, but are not limited to, statements or information with respect to (a) the ability to obtain additional debt financing, (b) the Company’s ability to achieve its target blended cost of capital and (c) the Company’s ability to secure additional real-estate secured indebtedness at favorable interest rates. Forward-looking statements involve and are subject to assumptions and known and unknown risks, uncertainties, and other factors which may cause actual events, results, performance, or achievements of the Company to be materially different from future events, results, performance, and achievements expressed or implied by forward-looking statements herein, including, without limitation, the risk factors discussed in the Company’s Form 10 and Form 10-Q filed on EDGAR at www.sec.gov. The forward-looking statements contained in this press release are made as of the date of this press release, and the Company does not undertake to update any forward-looking information or forward-looking statements that are contained or referenced herein, except as may be required in accordance with applicable securities laws. All subsequent written and oral forward-looking information and statements attributable to the Company or persons acting on its behalf is expressly qualified in its entirety by this notice regarding forward-looking information and statements.
(This information is primarily sourced from Verano Holdings Corp. Highly Capitalized has neither approved nor disapproved the contents of this news release. Read our Disclaimer here).
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