Delta 9 Cannabis (TSXV:DN) (OTCQX:VRNDF) has received an increased bank credit facility, putting it in an attractive position to continue its growth. However, not everything is perfect: Delta 9 stock is down nearly 5% Friday.
Here's the latest with the Winnipeg-based company.
Delta 9 Sees Increase in Debt Financing
Last week, Delta 9 Cannabis announced it's seen an increase in debt financing, with the Canadian Western Bank agreeing to increase its existing loan and credit facility. With the changes, Delta 9's total credit facility with the Bank now comes to roughly $18.19 million. The terms of agreement with the Bank were first announced on July 24 of last year.
"This increased debt financing, together with our recently completed short form prospectus offering of debenture units have well-positioned us to continue the Company's growth and implementation of its business plan for the remainder of the year," explained Delta 9 CEO John Arbuthnot.
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"The relationship between our Company and the Bank since the date of the Original Financing has grown steadily, and the proposed terms for these amendments demonstrate the strength of our mutual trust. We have watched Canadian financial institutions becoming more comfortable with the cannabis industry each day, and our experience with the Bank over the past year is a testament to the mutual benefits that can follow from collaboration between the two industries."
The news didn't seem to stay at the forefront of investors' minds this week, however, with Delta 9 stock dropping 4.54% Friday, trading at $0.84.
Takeaway
Moving forward, it's going to be an interesting time for Delta 9 Cannabis. This increased debt financing could very well be the thing the company needs to show that it can compete with the likes of Aurora Cannabis (TSX:ACB) (NYSE:ACB) and Canopy Growth (TSX:WEED) (NYSE:CGC).
What do you think about the news? Are you surprised to see Delta 9 stock trading in the red? Let us know your thoughts in the comments below.
Featured image: DepositPhotos © Alexstar
