Jushi Holdings Inc (CSE:JUSH, OTCQX:JUSHF) has announced the closing of its previously announced private offering of approximately US$69 million aggregate principal amount of its 12% second lien notes and detached warrants to purchase up to around 16 million of the company’s subordinate voting shares at an exercise price of US$2.086.
The company said it used the gross proceeds from the offering of US$69 million, together with approximately US$9 million of cash on hand, to repurchase and redeem all of its outstanding existing 10% senior secured notes due January 2023 and pay accrued interest, fees and expenses.
Jushi said it has also received subscriptions for an additional US$5 million to be closed at a later date.
READ: Jushi Holdings reveals plans for proposed debt financing of US$68M
The notes in the offering will mature on December 7, 2026, bear interest of 12.0% per annum, payable in cash quarterly, and will be guaranteed by certain of the company’s direct and indirect domestic subsidiaries and secured by second priority liens on certain assets of the company and certain of the company’s direct and indirect domestic subsidiaries.
In connection with the offering, the purchasers of the notes also received four-year warrants at 50% coverage with an expiry date of December 7, 2026, at an exercise price per share equal to US$2.086.
The offering and sale of the notes and warrants have not been and will not be registered under the Securities Act of 1933, as amended, or the laws of any other jurisdiction, and may not be offered or sold in the US absent registration or an applicable exemption from registration requirements.
Amendments to Acquisition Facility
The company also announced that it has amended its existing US$100 million Senior Secured Credit Facility with SunStream Bancorp Inc, a joint venture sponsored by Sundial Growers Inc.
Under the terms of the amended acquisition facility, the company’s loan will be a first-lien term loan capped at US$65 million, bear an interest rate of 11% per annum, payable quarterly, will no longer carry a standby fee, and will mature on December 31, 2024. The financial covenants in the amended facility have been modified to remove the total leverage ratio covenant and replace it with a minimum quarterly revenue covenant.
Additionally, in connection with the amended facility, the company has made a one-time issuance to SunStream of 2.0 million subordinate voting share purchase warrants issued at US$2.086.
Jushi Holdings is a vertically integrated cannabis company led by an industry-leading management team. In the US, Jushi is focused on building a multi-state portfolio of branded cannabis assets through opportunistic acquisitions, distressed workouts, and competitive applications.
New poll shows cannabis consumption remains resilient
Separately, Jushi revealed the results of its second annual “Cannabis Consumer Insights Holiday Poll,” which highlighted how cannabis consumers are adapting under inflationary pressures.
The poll revealed that cannabis consumption remains resilient, despite a majority of consumers struggling with inflation.
The poll surveyed 1,000 cannabis consumers from US states with state-legalized cannabis sales for adults 21 years and older.
“Our independently conducted poll shows that even with mounting inflationary pressures and cost-saving behaviors on the rise, demand for cannabis remains very resilient,” said Jim Cacioppo, CEO of Jushi.
“In fact, we found customers are actually consuming the same or more than they were a year ago – they’re just purchasing less expensive alternatives to compensate for the rising cost of living. We believe staying on top of the latest consumer behavior trends will make our brands, products and digital and physical retail experiences more relevant as we continue to focus on our profitability and performance.”
According to the poll, the “vast majority” of cannabis consumers are consuming more or about the same amount of cannabis as they were a year ago.
Other findings included a shift from the importance of branding and strain type in purchasing decisions. Today, cannabis consumers are more strain agnostic, increasingly shopping around more as a cost-saving measure, Jushi said.
That said, 73% of respondents stated that they are actually spending more or about the same.
For more results from the poll, including the latest consumer behavior, shopping, spending and product shifts year-over-year, click here.
-- Updates with poll information --
Contact the author at jon.hopkins@proactiveinvestors.com