Cresco Labs Unlocks $32 Million in Non-Dilutive Capital
October 19 2023 - 7:30AM
Business Wire
Supports “Year-of-the-Core” focus and enhances
balance sheet
Cresco Labs Inc. (CSE:CL) (OTCQX:CRLBF) (FSE: 6CQ) (“Cresco” or
“Company”), the industry leader in branded cannabis products with a
portfolio of America’s most popular brands and the operator of
Sunnyside dispensaries, today announced the closing of the sale of
its sole licensed Arizona operation (“Encanto”) to an affiliate of
Mint Cannabis for an aggregate purchase price of $6.5 million in
cash. In addition, the Company has closed on a conventional
mortgage on its Ellenville, NY properties for a principal amount of
up to $25.3 million with an interest rate of 8.43%.
“We are pleased to announce the closing of the sale of our
remaining Arizona asset. As we have highlighted over the past
several quarters, we are focused on strengthening our operations
and increasing profitability by leaning into our Core – core
markets, core stores, core brands and core products. Our exit from
Arizona aligns with our strategy of optimizing our portfolio by
prioritizing assets with a greater path to scale,” said Charles
Bachtell, CEO of Cresco Labs. “We are also thrilled to secure a
conventional mortgage on our New York real estate at very favorable
terms. This non-dilutive financing is another sensible tool for
optimizing our balance sheet and lowering our cost of capital as we
continue to strengthen our overall business.”
Terms of the Encanto sale: The Company signed a
definitive agreement with an affiliate of Mint Cannabis on
September 13, 2023, and closed the transaction following approval
by the Arizona Department of Health Services on October 17, 2023,
yielding net cash proceeds of $6.5 million. SSC Advisors acted as
financial advisor to Cresco Labs.
Terms of the New York mortgage: On September 26, 2023,
the Company closed on a commercial mortgage secured by three
company-owned properties located in Ellenville, NY with a principal
amount of up to $25.3 million. Approximately $20 million was funded
at close, with the remaining principal held to fund future capital
expenditures. The 10-year mortgage carries an interest rate
calculated based on the FHLBank Boston 5-year rate plus 375 basis
points, resulting in an initial rate at close of 8.43%.
About Cresco Labs Inc.
Cresco Labs’ mission is to normalize and professionalize the
cannabis industry through a CPG approach to building national
brands and a customer-focused retail experience, while acting as a
steward for the industry on legislative and regulatory-focused
initiatives. As a leader in cultivation, production and branded
product distribution, the Company is leveraging its scale and
agility to grow its portfolio of brands that include Cresco, High
Supply, FloraCal, Good News, Wonder Wellness Co., Mindy’s and
Remedi, on a national level. The Company also operates highly
productive dispensaries nationally under the Sunnyside brand that
focus on building patient and consumer trust and delivering ongoing
education and convenience in a wonderfully traditional retail
experience. Through year-round policy, community outreach and SEED
initiative efforts, Cresco Labs embraces the responsibility to
support communities through authentic engagement, economic
opportunity, investment, workforce development and legislative
initiatives designed to create the most responsible, respectable
and robust cannabis industry possible. Learn more about Cresco
Labs’ journey by visiting www.crescolabs.com or following the
Company on Facebook, X or LinkedIn.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231019966247/en/
Media Jason Erkes, Cresco Labs Chief Communications Officer
press@crescolabs.com 312-953-2767 Investors Megan Kulick, Cresco
Labs SVP, Investor Relations investors@crescolabs.com General
Cresco Labs Inquiries 312-929-0993 info@crescolabs.com
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