Cannabis multistate operator MariMed secured a new 10-year loan worth $58.7 million, most of which will be used to refinance existing debt at an unspecified lower interest rate.
MariMed CEO Jon Levine said the refinancing “will generate significant cash savings.”
“Importantly, we are pleased there is no warrant or other equity component resulting in dilution to our shareholders,” Levine said in a Monday statement.
MariMed described the new 10-year loan as a construction to permanent commercial real estate mortgage from an unidentified U.S. chartered bank.
The company did not disclose the interest rate but said in a news release that it was a “lower fixed rate” that will be reset five years into the loan.
MariMed will make interest-only payments for the first year.
“After the first 12 months, payments will be based on a 20-year amortization schedule,” the Massachusetts-based company said in its release.
The loan is secured against MariMed’s “operating assets and real estate holdings” in Maryland and Massachusetts.
MariMed will use the new capital to pay off $46.8 million worth of loans from Chicago Atlantic and Bank of New England as well as a seller note from MariMed’s acquisition of Massachusetts medical cannabis company Ermont earlier this year.
The remainder of the new loan will be used to finish expanding MariMed’s cultivation facility in Hagerstown, Maryland.
Levine said the refinancing will save MariMed $4.7 million in principal and interest in Year One as well as $3.5 million annually afterward.
Those savings “will significantly improve cash flow from operations going forward, and provide funds that can be used for acquisitions if we choose,” Levine said.