#United States #New York #Senior Secured Notes #cannabis industry #Ascend Wellness

Ascend Wellness Holdings Secures Funding for Growth

On January 10, 2025, Ascend Wellness Holdings, Inc. (AWH) announced its engagement in an agency agreement with Seaport Global Securities LLC to facilitate a private placement of $15 million worth of Senior Secured Notes. These notes, carrying an interest rate of 12.75%, represent a significant step for the company as it aims to fortify its financial footing and accelerate growth initiatives across various states.

Strategic Financial Move

The newly issued notes will reach maturity by July 16, 2029. They are inherently linked to a larger series of senior secured notes amounting to $235 million, which were initially issued in mid-July 2024. Ascend plans to offer these notes at a price slightly below their face value, providing a lucrative opportunity for potential investors.

According to Sam Brill, the CEO of Ascend, this strategic financing will enable the company to expand its operations within core markets effectively. The company is looking to open an additional twenty retail outlets over the next few years, which could potentially increase its retail presence by approximately 50%. This expansion underscores the company’s commitment to optimizing its assets and improving operational efficiency.

Usage of Proceeds

The proceeds from the notes issuance will primarily be funneled into general corporate activities and funding the company’s ambitious growth plans. This strategic move has gained the confidence of lenders, who remain supportive of Ascend's business strategy and vision for sustainable development.

The company will also be entering a Supplemental Indenture that facilitates the issuance of the notes and complies with requirements set forth by the majority of its outstanding notes. The financial restructuring includes amendments to existing term loans to accommodate the new issuance, a move that reflects responsible financial management.

High-Yield Investment Opportunity

The 12.75% interest on these new notes—a typically high yield—offers attractive features for investors looking for stable returns. Payments on the notes will be made semi-annually, with conditions for early redemption, adding additional layers of flexibility for investors. Ascend also emphasizes that the notes will be guaranteed by certain subsidiaries of the company, providing an extra layer of security for investors.

Regulatory Landscape

The offering of these secured notes is being conducted privately. It targets qualified institutional buyers and accredited investors in compliance with Canadian and U.S. securities laws. This structured approach not only follows legal stipulations but also opens avenues for broader capital-raising opportunities beyond domestic borders.

This private placement is poised to be a significant milestone for Ascend Wellness Holdings as it looks forward to infusing new capital into its operations amidst an evolving cannabis market landscape. As the company prepares to expand its market presence, it remains committed to delivering value not just for shareholders, but for all stakeholders involved.

As Ascend embarks on this ambitious journey with the recent notes offering, it promises to uphold transparency in its operations while adhering to the regulatory requirements governing such financial transactions. This strategic move is expected to fortify its operational structure and establish a robust foundation for future growth, placing the company in a prime position within the industry.

For more information about Ascend Wellness Holdings and their product offerings, visit www.awholdings.com.