SPX3,998.84-72.86 -1.79%
DIA340.03-4.71 -1.37%
IXIC11,239.94-221.56 -1.93%

Pelorus Equity Group Loans $17.3M To Michigan Cannabis Co, Here Are The Details

Benzinga · 11/15/2022 10:54

Pelorus Equity Group, a company that provides real estate loans for cannabis, announced on Tuesday the closing of its $17.3 million debt financing agreement with Vassar Acquisitions Property Management, LLC and its cannabis operating entity, Canapa Valley Farms, and affiliated entities.

Proceeds from the loan, which closed on Oct. 27, 2022, will support Canapa Valley Farms' buildout of its state-of-the-art 90,000 sq. ft. greenhouse and 8,500 sq. ft. processing facilities.

The Details

Under the terms of the agreement, Pelorus has issued a $17.3 million five-year term loan with a floating interest rate of one-month secured overnight financing rate plus 12.5%, with a 2.5% SOFR floor.

Following month 18, the loan will become eligible for a rate decrease to one-month SOFR plus 10%, with a 2.5% SOFR floor, subject to the borrowers meeting agreed-upon metrics.

The loan is secured by the borrowers' 104,069 square foot cannabis cultivation, processing, and testing facility located on 90 acres in Vassar, Michigan, and is subject to customary covenants and requirements, along with a corporate guarantee from Vassar and a personal guarantee from its principals.

Why It Matters

"This agreement will help accelerate Canapa Valley Farms' cannabis-focused growth initiatives and collaborations, like its exclusive partnership to produce premium-quality flower and pre-rolls for award-winning Exotic Genetix in the Great Lake State," Dan Leimel, CEO of Pelorus Equity Group and manager of the Pelorus Fund, said.

Canapa Valley Farms Manager Frank DeNardo called the deal with Pelorus an "important component in getting our project complete and facility online."

Related News

Photo: Courtesy of geralt and Kindel Media by Pixabay