Aphria, one of Canada’s largest licensed medical marijuana producers, announced it has secured 100 million Canadian dollars ($74 million) in financing.
The financing will be used mostly to expand Aphria’s production capacity, which “is expected to supply more than 75,000 (kilograms) of high-quality cannabis at one of the lowest costs in the industry,” CEO Vic Neufield said in the release.
According to the release, CA$75 million of the total funding comes from equity financing, while the remaining CA$25 million comes via a five-year term loan.
Aphria, based in Leamington, Ontario, trades on the Toronto Stock Exchange under the ticker symbol APH.
Toronto-based Clarus Securities is the lead underwriter for the equity portion of the transaction. Under terms of the deal, Clarus and the other writers agreed to buy 11,538,480 shares of Aphria stock at CA$6.50 per share.
In the event the arrangement is oversubscribed, the underwriters have the option to buy an additional 1,730,722 shares. If exercised, that option would bring the equity side of the deal to over CA$86.3 million. The deal is expected to close May 9, according to the news release.
The CA$25 million loan, which will bear a 3.95% interest rate, comes from WFCU Credit Union of Windsor, Canada.
This deal follows Aphria’s two recent investments in the U.S. cannabis market. The company invested CA$25 million earlier this month toward the purchase of licensed CBD business in Florida and in March increased its stake by CA$4.1 million in an Arizona MMJ grower.