Cannabis REIT AFC Gamma looks to raise at least $56 million

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Florida-based marijuana industry real estate trust (REIT) AFC Gamma has priced an underwritten public offering to raise approximately $56.4 million before expenses.

The offering includes 2.75 million common shares of AFC Gamma, priced at $20.50 per share.

The underwriters have a 30-day option to buy up to 412,500 more shares, and the offering is expected to close on June 28.

“AFC Gamma intends to use the net proceeds from the offering to fund loans related to unfunded commitments to its existing borrowers, to originate and participate in commercial loans to companies operating in the cannabis industry that are consistent with its investment strategy, and for working capital and other general corporate purposes,” the company said in a late Wednesday news release.

The share offering represents roughly 17.1% of AFC Gamma’s common stock, or up to 19.1% if the underwriters purchase the full allotment of additional shares, according to a prospectus outlining the offering.

As of June 15, AFC Gamma’s loan portfolio included 13 different borrowers, for a total of $158.6 million in principal and $29.5 million in unfunded loan commitments, the prospectus states.

The company went public on the Nasdaq exchange in March and recently announced a $22 million real estate loan to multistate marijuana operator Justice Cannabis.

Shares of AFC Gamma trade under the ticker symbol AFCG.