Columbia Care Inc (CSE:CCHW, OTCQX:CCHWF, NEO:CCHW) said it has entered into subscription agreements with institutional investors to raise up to US$25 million in a private placement with the proceeds to be used to reduce its outstanding debts and for general corporate purposes.
This comes on the same day Canopy Growth Corporation (TSX:WEED, NYSE:CGC) also inked subscription agreements with institutional investors for a private placement of up to US$50 million, indicating returning investor interest in the cannabis sector.
Columbia Care said it has entered into subscription agreements with the institutional investors for the purchase and sale of 22,244,210 units of the company for C$1.52 per unit for gross proceeds of about US$25 million.
The investors will have the option to purchase $25 million in additional units at the same price per share.
The company also said it has entered into a non-binding agreement with the investors with respect to the repurchase by the company of up to US$25 million of the principal amount of their holdings in the 6% senior secured convertible notes due June 2025 of the company, the purchase price of which would be payable in shares.
As previously disclosed, Columbia Care said it is in continued discussions with certain holders of the company’s 13% senior secured notes due May 2024 to exchange these into the company’s 9.5% senior secured notes due February 2016 on a one-for-one basis.
Shares of Columbia Care traded down 2.2% at US$1.32 following the announcement as the broader cannabis sector saw investor pullback following recent strength spurred by optimism around the rescheduling of marijuana and banking reform.
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