Capital Coming into the industry.
TerrAscend Corp (TRSSF) announced the closing of its $45.5M debt financing agreement with Pelorus Equity Group. Proceeds from the Loan, which closed on Oct. 11, 2022, will support TerrAscend’s ongoing growth initiatives. Under the terms of the agreement, Pelorus has issued a floating rate loan currently bearing interest of 12.77% based on the prevailing Secured Overnight Financing Rate (SOFR), with a 2.5% SOFR floor. The duration of the Loan is 60 months, with a minimum earned interest period of 36 months. The Loan is secured by the Borrower's real estate assets in New Jersey and Maryland and is subject to customary covenants and requirements. “With this agreement, we are excited to help fuel TerrAscend’s growth and long-term business goals,” said Dan Leimel, CEO of Pelorus Equity Group and manager of the Pelorus Fund. “Our investment and lending philosophy is focused on being honest, upfront, and doing what we say we’re going to do for both our borrowers and our investors. As the demand for capital continues to increase in tandem with the growth of the cannabis industry, we plan to deliver even more innovative, flexible lending solutions and stabilized loans like this one to meet the needs of a wide range of clients, including MSOs, SSOs, and ancillary businesses.”
AYR Gets a New President.
Ayr Wellness announced yesterday that consumer packaged goods and retail industry veteran David Goubert has been appointed President, joining Ayr's leadership team to oversee the company's operational and commercial functions, including production, supply chain, retail, wholesale and marketing. According to a statement, Goubert will report to Ayr's Founder and CEO, Jonathan Sandelman. Co-Chief Operating Officer Jason Griffith, who has helped integrate Ayr's operating footprint over the last several years, will transition out of the company. Griffith has agreed to remain with the company through a transitionary period to ensure continuity. Co-Chief Operating Officer Jennifer Drake will serve as Ayr's sole Chief Operating Officer.
Michigan Changing the way they do business.
We highlighted Michigan in our monthly QA + Industry Trends Call last month, showcasing how they have seen unit volumes consistently grow but sales really haven't seen the same growth because of the price deterioration we are seeing in this market. The average ounce of weed costs a little more than $100. But last year, it was twice as much according to the state regulatory agency. And with the price of cannabis so low, businesses are feeling the impact. This pressure is more easily absorbed by larger companies that have more financial backing because they can spend more on marketing and employment but there is definitely an impact on every company in this environment. 'I think everyone is looking at you know what efficiencies they can create you know in their business model as well as maintaining their potentially vertical integration and maybe shifting their employees around,” said Shelly Edgerton (Michigan Cannabis Manufacturers Association). When you have long-term financial headwinds in the entire industry, the survives are always the companies that get creative and really look at how they operate and where they can become more efficient.
