{"id":3040,"date":"2021-12-14T18:58:06","date_gmt":"2021-12-14T18:58:06","guid":{"rendered":"http:\/\/CAIiEPm9FB1j2yvt42RlI_09M90qGQgEKhAIACoHCAow3cCjCzCgy7sDMKy5hAc"},"modified":"2021-12-14T18:58:06","modified_gmt":"2021-12-14T18:58:06","slug":"marijuana-mso-curaleaf-raises-record-425-million-from-8-debt-financing-marijuana-business-daily","status":"publish","type":"post","link":"https:\/\/thcinct.com\/?p=3040","title":{"rendered":"Marijuana MSO Curaleaf raises record $425 million from 8% debt financing – Marijuana Business Daily"},"content":{"rendered":"
\n
\"Image<\/div>\n<\/div>\n
\n
\n

Marijuana multistate operator Curaleaf Holdings said it has received commitments for a privately placed debt raise of $425 million<\/a> \u2013 the largest yet for a U.S. cannabis company \u2013 while securing an interest cost that is among the lowest in the industry.<\/p>\n

The five-year senior secured notes have an 8% annual interest rate, according to a news release issued Monday by the Massachusetts-based company.<\/p>\n

Advertisement<\/p>\n

<\/div>\n

The agreement also permits up to an additional $200 million of senior bank financing.<\/p>\n

The deal is the biggest example yet of a shift from equity to debt financing, with large MSOs enjoying some of the lowest interest rates<\/a> in U.S. cannabis industry history, thanks to stronger balance sheets and expanding marijuana markets.<\/p>\n

St. Louis-based investment firm Stifel GMP wrote that Curaleaf\u2019s debt cost \u201cis equivalent to the lowest the industry has seen to date.\u201d<\/p>\n

In October, Florida-based Trulieve Cannabis netted $350 million in proceeds<\/a> in a debt raise that also had an annual interest rate of 8%.<\/p>\n

By contrast, large MSOs were paying annual interest rates of 11% to as high as 20% on debt in 2019, according to Stifel.<\/p>\n

Curaleaf and Trulieve \u2013 the latter acquired Arizona-based Harvest Health & Recreation earlier this year<\/a> \u2013 are the two biggest cannabis companies in the U.S. based on revenue.<\/p>\n

Eleven cannabis debt financings exceeding $100 million each have closed since December 2020, New York-based Viridian Capital Advisors noted in a research report this week.<\/p>\n

\u201cLarger transactions are becoming more popular because they cater to the institutional investors entering the market looking for more liquidity,\u201d Viridian wrote.<\/p>\n

But Viridian noted a wide debt cost spread between large MSOs and smaller plant-touching operators.<\/p>\n

Denver-based Schwazze, for example, is paying a 13% annual interest rate on a $95 million raise<\/a> that recently closed.<\/p>\n

\u201cThe difference between the Curaleaf and the Schwazze deals demonstrates that the cannabis debt market has not fully matured,\u201d Viridian wrote.<\/p>\n

\n

Grow better: MJBizDaily<\/em> Greenhouse Components Buyers Guide <\/b><\/p>\n

\n

Maximize your output and quality with the right equipment. Curated by the editors of MJBizDaily<\/em>, our new, free Greenhouse Components Buyers Guide helps you choose wisely and covers irrigation, automation and ROI.<\/p>\n

Inside:<\/p>\n