Times have been tough for many cannabis companies over the past months, and raising capital has also been a problem for some of those. In that regard, Acreage Holdings (OTCQX:ACRGF) has not been an exception.
A Major News
However, on Wednesday, the vertically integrated cannabis company announced that it had chosen two different avenues to raise further capital. The company revealed that it had reached an agreement by way of which as much as $50 million worth of Acreage’s Class A stock is going to be sold. However, that is not all. The company is also going to issue convertible debentures to the tune of $10 million.
In this regard, it should be mentioned that the stock sale is going to be in the form of a ‘standby equity distribution agreement.’ By way of that agreement, stock worth up to $50 million can be sold by Acreage to an individual, institutional investor from time to time. The timing and the number of shares to be sold are subject to certain rules.
Acreage did not reveal the identity of the aforementioned institutional investor. On the other hand, the convertible debentures offer an annual interest rate of as much as 15%, and the company’s dispensaries in Connecticut are going to be the securities. These debentures can be converted to Class A shares worth $1.68 a share.
In recent days, it has become clear that Acreage Holdings is scaling back its operations with one eye on hitting profitability. This Monday, the multistate cannabis operator announced that it sold off properties on Nantucket and in Massachusetts. However, that is not all. The company also announced that is sold a medical marijuana dispensary located in South Dakota. The company’s efforts to scale back its operations are solely aimed at attaining positive EBITDA this year. The company believes that if it continues to focus on its important profitable operations, then it could attain its goals quickly.