Pennsylvania’s Standard Farms, a subsidiary of Arizona-based cannabis multistate operator Tilt Holdings, secured a $10.5 million loan.
The loan will fund Standard Farms’ plans to build and run medical marijuana dispensaries in Pennsylvania, according to a news release.
An unidentified “experienced retailer and operator” issued the secured promissory note, the release noted.
Standard Farms can borrow up to $10.5 million to build and operate up to three medical marijuana dispensaries.
The promissory note matures on Dec. 31, 2027, and the loan carries a 20% interest rate.
The interest increases to:
- 30% once Standard has opened its first dispensary and completed a sale.
- 40% six months after the first location opens.
No payments will be due before the maturity date, but Standard Farms can prepay in cash or kind without the lender’s written consent.
The note is secured against the retail assets of Standard Farms and a second priority security interest in its equity interests held by a Standard subsidiary, Baker Technologies.
Standard Farms already supplies products to Pennsylvania’s MMJ market.
A recently passed law now allows the state’s producers and growers to sell directly to MMJ consumers.
“We applaud the Commonwealth for providing a positive path forward for a small independent grower like Tilt’s Standard Farms to compete in this vibrant marketplace,” Tim Conder, CEO of the multistate operator, said in a statement.
Conder executed a cost reduction strategy at Tilt last year.
