Canopy Growth (TSX:CGC) has closed a $5.5 million financing via two loan facilities. The funds will be used to refinance building construction and for expenditures related to the purchase of capital equipment.
As quoted in the press release:
The new financing is comprised of two separate loan facilities: a term loan and a revolving line of credit. The 5 year term loan is for approximately $3.5 million and is provided on commercial terms. The revolving loan, in the amount of $2.0 million, bears a variable interest rate based on the CIBC prime rate with a 5 year term and interest only payments.
The financing is secured by a first charge mortgage on the Tweed Farms property, a first position on a Tweed Farms general security agreement and a specific security interest, backed by a corporate guaranty from Canopy Growth.
Canopy Growth CEO, Bruce Linton, said:
Management believes it is appropriate and necessary to fund continued investment in our business in order to capitalize on Canadian and international opportunities in a timely fashion all the while considering the potential impact of key future developments in our sector, including pending changes to the Marihuana for Medical Purposes Regulations (MMPR) in response to the Allard decision which are expected to be introduced by August 24, 2016, the tabling of recommendations by the Federal Government’s Marijuana Legalization Task Force which is expected in November 2016 and the introduction of marijuana legalization legislation which is expected to happen by the spring of 2017.