Diversified US cannabis company iAnthus Capital Holdings Inc (CSE:IAN, OTCQB:ITHUF) has struck a deal to provide a US$2mln credit facility to emerging cannabis firm - Florida-focused GrowHealthy Holdings LLC.
iAnthus believes GrowHealthy could become the pre-eminent provider of medical cannabis in one of the most populous states in the USA.
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GrowHealthy's subsidiary is one of the 12 current Florida Medical Marijuana Treatment Centers (MMTCs) licensed to provide medical cannabis under Florida legislation.
Each MMTC is permitted to immediately open and operate up to 25 dispensaries, a number likely to increase, and GrowHealthy is currently negotiating lease agreements for its initial proposed dispensaries in the Tampa and West Palm Beach areas.
It is expected to deliver to its first patients in November this year.
The Florida program is very much still in its infancy, with only 17 dispensaries opened across the state so far.
The group owns a cultivation and processing facility comprised of almost 200,000 sq ft on 33 acres in Lake Wales, Florida, which at the time of licensure was the largest cultivation facility in the state.
"We are extremely impressed with GrowHealthy's management team and the company's cultivation operations, and we believe that GrowHealthy has the ability to become the preeminent provider of medical cannabis in one of the nation's most populous states," said iAnthus president Randy Maslow.
"With more than 20 million residents and favorable demographics, Florida provides enormous potential for its licensed medical cannabis providers, and we look forward to working with GrowHealthy as it establishes itself as one of the leaders in this large and fast-growing market."
GrowHealthy chief executive Don Clifford added: "This credit facility from iAnthus allows GrowHealthy to ramp up its product manufacturing capabilities and accelerate its dispensary build-out, to more quickly provide for the needs of Florida's Medical Marijuana patients."
The loan facility to GrowHealthy has a term of 12 months with a blended interest rate of 12.5% over that period, starting at a 5% annual rate until the end of January, 2018, and escalating to 20% for the remainder of the term.
It is secured by GrowHealthy's real estate holdings and related assets at its Lake Wales cultivation and processing facility.
Notably, as part of the deal, iAnthus has been granted exclusive rights to negotiate a further strategic relationship with GrowHealthy.
iAnthus shares in Toronto were unchanged at C$2.70.