Heritage Cannabis amends non-revolving loan agreement with BJK Holdings

Heritage Cannabis Holdings Corp said it has entered into an amended non-revolving loan agreement with BJK Holdings Ltd,  improving the terms of its existing loan with BJK agreed on March 29, 2021.  

The amended loan agreement increases the loan amount to $7.175 million from $7 million and extends the maturity date to February 1, 2023.

As part of the revised deal, Heritage Cannabis paid a one-time extension fee of $175,000 to BJK on October 12, 2021.

READ: Heritage Cannabis subsidiary inks two deals to supply medical cannabis products to Australia

BJK also advanced Heritage $2.6 million on the closing date, at the Royal Bank of Canada’s prime lending rate plus 1.25%, adjusted automatically with each quoted or published change in rate.

Heritage explained that the additional loan was advanced to help fund capital asset acquisitions and for general corporate purposes.

The cannabis company also secured a revolving line of credit up to a maximum of $5 million, with an interest rate of 18% per annum. In total, Heritage now has access to $14.775 million through its amended loan agreement with BJK.

For its part, Heritage granted BJK 10 million warrants at an exercise price of $0.25 per share for a period of 24 months.

“We are very pleased to have secured this additional capital at such an exciting time in the growth of the business,” David Schwede, CEO of Heritage, said in a statement. “The improved terms and access to additional funds from BJK are a testament to our strategy and offer flexibility and strength to our balance sheet as we solidify our position in the Canadian cannabis market and execute on our international strategy.”

Heritage plans to use the capital to fund its robust growth strategy.

David Thiessen with BJK also offered commentary on behalf of his company: “We have been very impressed with the Heritage team and the execution to this point.”

“We believe Heritage is moving towards becoming one of the leaders in the cannabis sector and we were pleased to work with them to extend additional capital against the same security package,” Thiessen said. “We look forward to watching our capital unlock additional value for all stakeholders.”

Heritage Cannabis is positioning itself to be a leader in the North American cannabis sector, offering innovative products to both the medical and recreational legal cannabis markets in Canada and the US. The company currently has an extensive portfolio of high-quality cannabis products under the brands Purefarma, Pura Vida, RAD, Premium 5, feelgood., CB4 and ArthroCBD.

Contact the writer at [email protected]

Story by ProactiveInvestors