Provides Commitment Letter for up to an additional $5.0 million to support Ontario retail rollout
TORONTO, ON / ACCESSWIRE / March 2, 2020 / Trichome Financial Corp. ("Trichome Financial" or the "Company") (CSE:TFC) is pleased to announce that it has entered into a $2.25 million term loan (the "Term Loan") with 2673943 Ontario Inc., d/b/a Hello Cannabis ("Hello Cannabis"). Hello Cannabis has partnered with a second round AGCO lottery winner to launch and operate a retail cannabis store located at 317 Northern Ave. E. in Sault Ste. Marie, Ontario ("Hello SSM"). Upon closing, Trichome Financial advanced the first $1.0 million tranche under the Term Loan, which will be used to fund capital expenditures in connection with the retrofit of Hello SSM, as well as inventory purchases.
"Trichome is pleased to be partnering with the team at Hello Cannabis. Building on its momentum advising a first round lottery winner and operating a highly successful retail store in Dundas, Ontario, we see great potential for the team to repeat its success with the opening of a new location in Sault Ste. Marie and in other locations in the near term," said Michael Ruscetta, CEO of Trichome Financial. "Hello Cannabis has brought an analytics-based and education-focused approach to location, product offerings and customer experience and we look forward to growing our relationship as we assist with its expansion plans across Ontario."
"The roll-out of Ontario retail cannabis locations represents a very significant opportunity in the development of the legal cannabis market in Canada. Trichome Financial understands this opportunity and was able to act quickly to structure a customized credit solution that is economical to both parties," said Stephen Verbeek, CEO of Hello Cannabis. "We believe that the opportunity to bring cannabis to communities which have been underserved thus far, such as Sault Ste Marie, fits perfectly with our mission to deliver a superior customer experience through education and empowerment. The community has welcomed us with open arms and we are grateful for the opportunity."
Term Loan Details
The Term Loan is secured by a first-ranking, perfected security interest over all of the assets of Hello Cannabis and is personally guaranteed by a number of Hello Cannabis' key shareholders. The Term Loan bears interest at a rate of 10.5% per annum with interest paid monthly. The Term Loan matures in 18 months and carries an accordion feature that enables Hello Cannabis, upon approval from Trichome Financial, to upsize the funded amount of the Term Loan by $1.25 million. As additional consideration, Hello Cannabis will pay Trichome Financial a fixed-term monthly fee equal to 2.0% of gross revenue on sales from Hello SSM. Trichome Financial has also delivered a commitment letter to Hello Cannabis to provide up to an additional $5.0 million in senior secured financing, subject to due diligence and certain other conditions, to support the buildout and inventory requirements for new retail cannabis locations in Ontario.
Update on Transaction with Ontario Cannabis Holdings Corp.
Trichome Financial and Ontario Cannabis Holdings Corp. have mutually agreed to terminate the non-binding term sheet previously announced on December 19, 2019.
About Hello Cannabis
Hello Cannabis is a Canadian cannabis company focused on creating empowering and educational experiences in the retail cannabis space. As one of the first companies to open and operate a licensed recreational cannabis store in Ontario, Hello Cannabis has built both a proven business model and one of the highest rated reputations for customer experience in Ontario. The goal for Hello Cannabis is to redefine the experience of purchasing cannabis and help dissolve the negative stigma associated with it in order to open the market to new customers. With years of experience within the team and an array of analytics, our stores will offer the best variety of legal cannabis products including dried flower, pre-rolls, edibles, vapes, cannabis extracts, beverages and a large range of cannabis accessories.
About Trichome Financial Corp.
Trichome Financial is a specialty finance company focused on providing flexible and creative credit solutions to the global legal cannabis market. Trichome Financial was created to address the lack of credit availability in the large, growing and increasingly complex cannabis market. Founded by industry leaders Origin House and Stoic Advisory, Trichome Financial's experienced management team has a unique edge to capitalize on proprietary deal flow and industry insight while developing a first mover advantage as a global cannabis focused specialty finance company. Trichome Financial provides customized financing solutions across the industry value chain to support growth, capital expenditures, mergers, acquisitions, working capital and other needs. Leveraging the combined resources and knowledge of its founders, it is able to offer significant value-added financial, product, market and operational support to its partner companies. Trichome Financial's current assets are all based in Canada and it currently has no operations or assets in the United States.
For further information about Trichome Financial please visit us at www.trichomefinancial.com or @trichomefinance on Twitter and refer to the joint information circular of Trichome Financial and 22 Capital dated May 29, 2019 which is available on the Company's SEDAR profile at www.sedar.com.
READER ADVISORY
Neither the CSE nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of this press release.
This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate to, among other things: Hello Cannabis' ability to execute on its business plan and its expansion and advances of further capital to Hello Cannabis pursuant to the accordion feature of the Term Loan or under the commitment letter. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; and the delay or failure to receive board, shareholder or regulatory approvals. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Except as required by law, Trichome Financial assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change.
Contact Information
Michael Ruscetta, CEO
Telephone: (416) 467-5229
Email: [email protected]
Marc Charbin, Investor Relations
Telephone: (416) 467-5229
Email: marc.[email protected]
SOURCE: Trichome Financial Corp