New company launched to serve debt-starved marijuana businesses

Marijuana companies looking to access the debt market to expand their business have a new lender they can turn to for funding.

Trichome Yield Corp. will provide debt financing and offer a suite of professional services for emerging and established cannabis companies, both in Canada and around the world, according to a news release.

The new venture is a subsidiary of Canada’s CannaRoyalty, which invests in Canadian and U.S.-based cannabis companies.

According to CannaRoyalty, Trichome’s financing offers less dilution than equity or cannabis “offtake” alternatives – two of the most common ways to raise capital in the marijuana sector.

“We do recognize and are looking to fill the banking void, but thinking longer term, we are also seeking to become a trusted strategic partner who can provide more than just financial value as you’d typically get with a banking relationship,” said CannaRoyalty Vice President Kevin Jarrett.

Trichome was co-founded along with real-estate investor Sprott Inc. and Stoic Advisory, an independent cannabis-focused consulting firm.

Debt financing is generally less dilutive than equity financing.

It allows business owners to own a larger share of the companies they are building, making it more appealing to fast-growing companies in the sector.

But debt has been hard to come by for capital-hungry marijuana companies in the absence of Canada’s biggest lenders, even as credit unions have led the way when it comes to offering debt.

“The market is missing a straightforward ‘one-size fits all’ asset-backed investment product,” Jarrett said.

Matt Lamers can be reached at [email protected]

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