Pelorus Equity Group, a company that provides real estate loans for cannabis, has closed its S$15.8 million debt financing agreement with TransCanna Holdings Inc. a California-based cannabis company. The loan proceeds will be used to refinance and develop TransCanna’s California facility, as well as for construction costs, and the payment of interest on existing debt.
“Successfully sourcing exciting investment opportunities with the cannabis industry’s leading companies is what sets Pelorus apart,” stated Dan Leimel, CEO of Pelorus Equity Group and manager of the Pelorus Fund. “I am thrilled to partner with TransCanna to scale their cultivation capabilities and improve availability of their award-winning products for the California market. I look forward to continuing to work with some of the largest players in the industry and seeing our many partners continue to flourish in this growing market.”
The $15.8 million debt facility accrues interest at 14% per annum. If certain requirements are met after 18 months, the interest rate will be reduced to 12% per annum.
Bob Blink, CEO of TransCanna, commented “In a rapidly evolving industry with many strict regulations and requirements, Pelorus has been influential in providing the capital necessary for continued development. We are extremely excited to partner with the Pelorus team as well as to fuel our growth in California.”
In connection with the Loan, Pelorus issued, to an affiliate of the company warrants to purchase up to 51.21 million common shares of the company. Each loan warrant entitles the affiliate to purchase, for a period of five years, one common share of the company at a price of $0.12, representing the closing price of the company’s common shares on the Canadian Securities Exchange on July 29, 2022.
“We’re excited to continue to support the cannabis industry despite the broader market volatility,” said Pelorus Equity Group managing partner Travis Goad. “A lender through all phases of the business cycle, Pelorus continues to deploy capital to the right sponsors and opportunities. We look forward to Transcanna’s growth and future success.”
TransCanna Additional Financing
Additionally, TransCanna managed to secure an extra $9.5 million in financing from Alpha Blue Ocean. Under this financing agreement, TransCanna has entered into an issuance agreement dated July 29, 2022, with Global Tech Opportunities 2, an investment fund managed by ABO that provides for the issuance of senior unsecured convertible debentures in the aggregate principal amount of up to $9,500, each at a subscription price of 95% of the aggregate principal amount thereof.