(Minneapolis, MN) — Nov. 04, 2024 — Vireo Growth Inc, a cannabis company committed to providing safe access, quality products and great value to its customers, today announced that it has secured a new convertible debt facility which provides a financing commitment of up to U.S. $10.0 million in aggregate principal amount of convertible notes (the “Convertible Notes”). This facility is being funded by the Company’s senior secured lender and its affiliates under the Company’s existing credit agreement.
Chief Executive Officer Amber Shimpa commented, “We are pleased to secure this new financing commitment, with a convertible feature priced at a significant premium to market. This facility gives us additional flexibility to execute our strategy for the year ahead, which incorporates additional capex spending, working capital needs, and supports general corporate purposes. We appreciate the collaborative nature of our relationship with Chicago Atlantic, who continues to support our business as we work toward the launch of adult-use sales in Minnesota next year.”
The convertible facility has a term of three years, with a cash interest rate of 12.0 percent, and such interest shall be paid to Lender in cash on the last business day of each calendar month. All accrued and unpaid interest shall be payable in full on the Maturity Date or earlier date of prepayment, in each case adjusted for any period of less than one calendar month, if applicable. The Convertible Notes shall be convertible at any time into Subordinate Voting Shares of the Company, at the option of Lender, in whole but not in part, in a single transaction, at a conversion price equal to U.S. $0.625. The Company does not expect to issue any warrants related to this convertible loan facility.
The issuance of Convertible Notes will be considered a “related party transaction” for the purposes of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”), as the Lender is a “related party” to the Company as defined in MI 61-101. A material change report respecting the issuance of Convertible Notes will be filed less than 21 days before the expected closing date of the convertible debt facility as the Company determined to complete the convertible debt facility on an expedited basis. The issuance of Convertible Notes will be exempt from the formal valuation and minority shareholder approval requirements available under MI 61-101 pursuant to sections 5.5(a) and 5.7(1)(a) of MI 61-101 on the basis that the fair market value of the Convertible Notes does not exceed 25% of the market capitalization of the Company.
About Vireo Growth Inc.
Vireo was founded as a pioneer in medical cannabis in 2014 and we are fueled by an entrepreneurial drive that sustains our ongoing commitment to serve and delight our key stakeholders, most notably our customers, our employees, our shareholders, our industry collaborators, and the communities in which we live and operate. We work every day to get better and our team prioritizes 1) empowering and supporting strong local market leaders and 2) strategic, prudent capital and human resource allocation. For more information, please visit www.vireogrowth.com.
