Marijuana industry finance company AFC Gamma significantly boosted a loan to Chicago-based Justice Cannabis Co., increasing it from the $22 million figure announced in May to $75.4 million.
Justice Cannabis plans to use the additional capital to further develop cultivation and processing operations in New Jersey and Pennsylvania, purchase assets and refinance existing debt.
Florida-based AFC Gamma committed an additional $43.4 million, and another $10 million was syndicated to an affiliate, according to a news release.
The loan is secured by a first-lien mortgage on Justice Cannabis-owned real estate in New Jersey and Pennsylvania, and other commercial interests. The interest rate wasn’t disclosed.
AFC Gamma CEO Leonard Tannenbaum said in the release that the increase in the senior secured credit facility reflects the lender’s belief that Justice Cannabis “has one of the best license stacks for a multistate operator.”
New Jersey and Pennsylvania both have “favorable supply and demand dynamics,” Tannenbaum added.
New Jersey approved a recreational cannabis market earlier this year and is preparing for a 2022 launch.
Pennsylvania’s medical cannabis industry has been sizzling, although price competition has increased.
Pressure is increasing on Pennsylvania to legalize adult use to keep pace with neighboring New Jersey.
Lawmakers in Pennsylvania recently introduced an adult-use bill, but the measure could face stiff opposition in the GOP-controlled state Senate.
