Cresco Labs stock is on the up and up today after dropping earlier in the week following an announcement that the company had closed US$100 million credit facility.
Cresco Labs (CSE:CL) (OTCQX:CRLBF) announced on Monday that it had secured a term loan for an initial US$100 million, with a mutual option to increase the size of the facility to a maximum of US$200 million. Cresco has said that it intends to use the capital to fund further expansion in the Illinois market, as well as for closing and integration costs associated with pending acquisitions, and other strategic growth initiatives in key markets. News of the financing led to an 8% drop in Cresco Labs stock, some of which has been recovered today.
Charlie Bachtell, CEO and co-founder of Cresco Labs, said, “We have worked to create a credit facility that strengthens our balance sheet in a non-dilutive manner – with no warrants nor convertibility to equity. This transaction demonstrates that capital is available to the top operators in this industry who demonstrate a disciplined strategic focus, a responsible allocation of capital, and a track record of operational execution.” Cresco Labs stock is currently trading for $7.67.
The terms of the loan give Cresco the option to repay over a period of either 18 or 24 months, with an interest rate of approximately 12.7% per annum for an 18-month repayment and approximately 13.2% for 24 months, payable quarterly in arrears.
Cresco Labs Stock Down 15% Since Origin Takeover
Since completing its acquisition of West Coast cannabis firm Origin House at the beginning of the year, Cresco Labs stock has actually dropped around 15%, despite the combined entity creating one of the largest cannabis firms on the US market. Currently, Cresco Labs operates in Arizona, Illinois, Massachusetts, New York, Nevada, Ohio, and Pennsylvania, but this deal will give the company access to the biggest cannabis market in the world, California, where Origin operates six facilities and delivers over 50 brands of cannabis products to 400 retailers.
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