WeedMD enters into C$39M debt facility with Bank of Montreal, acquires 98-acre licensed Strathroy property
WeedMD Inc (CVE:WMD) (OTCMKTS:WDDMF) announced Monday that it has entered into a credit facility with Bank of Montreal and the bank will provide the company up to C$39 million of secured debt financing at approximately 5% interest per year over a three-year term.
The facility consists of a $33.1 million term loan, a $3 million equipment term loan and a $3 million revolving credit facility, all of which mature in 2022. The licensed producer and distributor of medical-grade cannabis indicated it may repay the balance without penalty at any time during the term of the loan.
On a separate note, WeedMD has exercised its option to purchase the Health Canada-licensed, 98-acre Strathroy property from Perfect Pick Farms.
READ: WeedMD on track to double production with its new outdoor cannabis cultivation property
The Strathroy purchase includes the licensed 610,000 square feet hybrid-greenhouse, more than 100,000 square feet of ancillary structures, as well as the 50 acres of land upon which the company intends to cultivate outdoor cannabis.
“Securing Bank of Montreal’s support at this exciting juncture in WeedMD’s growth provides market validation in our ability to continue to execute our strategic plan with non-dilutive financing,” said WeedMD CEO Keith Merker. “In 2018, it took us just six months to retrofit, license and bring the first phase of our state-of-the-art greenhouse online. Less than three months later, we took down our first harvests with very compelling yields and quality.”
Merker said the company has continued to expand its licensed footprint and operations across the greenhouse and has recently announced its plans for outdoor cannabis cultivation onsite.
“We expect to double our production potential with a low-cost scalable expansion,” said Merker.
The expansion is expected to allow WeedMD to yield over 100,000 kilograms of cannabis by 2020, which would double current production levels from the indoor greenhouse alone. The first phase will expand an initial 25 acres, while the second will add an additional 25.
The Toronto-based company initially selected the 98-acre property in November 2017 because of its expansion potential, said Merker.
The Aylmer, Toronto-based company has now acquired a 100% interest in the Strathroy property from Perfect Pick for the balance due under its option agreement of $22.6 million, of which $17.6 million was paid in cash and $5 million was satisfied by the issuance of 2.5 million units in WeedMD.
Each unit consists of one WeedMD share at $2, and one-quarter of a warrant, with each whole warrant exercisable into a WeedMD common share at an exercise price of $2.50 per share for five years.
WeedMD owns and operates two facilities: a 26,000-square-foot indoor facility in Aylmer, Ontario and a state-of-the-art greenhouse and outdoor facility located in Strathroy, Ontario.
Contact Uttara Choudhury at [email protected]
Follow her on Twitter: @UttaraProactive
Story by ProactiveInvestors
Source: https://www.proactiveinvestors.com/companies/news/217674/weedmd-enters-into-c39m-debt-facility-with-bank-of-montreal-acquires-98-acre-licensed-strathroy-property-217674.html
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