Cannabist Co Reports New Debt, Accelerated Obligations, Equity Sales

TL;DR

**Cannabist Co just took on new debt and sold more stock, signaling big financial changes.**

AI Summary

On January 22, 2024, Cannabist Co Holdings Inc. (formerly Columbia Care Inc.) filed an 8-K to report entering into a material definitive agreement, creating a direct financial obligation, and triggering events that accelerate or increase existing obligations. This filing also disclosed unregistered sales of equity securities. This matters to investors because it signals significant financial restructuring and potential dilution, which could impact the stock's value and the company's future financial health.

Why It Matters

This filing indicates Cannabist Co is undertaking major financial maneuvers, including new debt and equity sales, which could significantly alter its balance sheet and ownership structure.

Risk Assessment

Risk Level: high — The filing indicates new financial obligations, potential acceleration of existing debt, and unregistered equity sales, all of which can introduce significant financial risk and dilution for shareholders.

Analyst Insight

A smart investor would carefully review the full details of the material definitive agreement and the terms of the unregistered equity sales once available to assess the true impact on the company's financial health and potential shareholder dilution.

Key Players & Entities

• Cannabist Co Holdings Inc. (company) — the registrant filing the 8-K
• Columbia Care Inc. (company) — the former name of the registrant
• January 22, 2024 (date) — date of the earliest event reported in the 8-K

Forward-Looking Statements

• The new financial obligations and equity sales will likely lead to increased debt and potential dilution for existing shareholders. (Cannabist Co Holdings Inc.) — high confidence, target: Q1 2024 earnings report
• The company's stock price may experience volatility as investors react to the implications of new debt and equity issuance. (Cannabist Co Holdings Inc. stock) — medium confidence, target: next 30 days

FAQ

Key Financial Figures

• $25 million — o repurchase (the "Repurchase") up to US$25 million principal amount of the Notes in exchan
• $5 million — ssign, transfer and sell ("Transfer") US$5 million principal amount of Notes in considerat
• $0.41 — Common Share equal to the greater of CAD$0.41 per Common Share and the 12.5% discount
• $0.47 — ares on the Exchange is greater than CAD$0.47 as of the close of trading at 4:01pm on
• $0.87 — ares on the Exchange is greater than CAD$0.87 for 5 consecutive trading days, provide
• $15 million — arate equal tranches, an aggregate of US$15 million principal amount of Notes in considerat
• $0.57 — Common Share equal to the greater of CAD$0.57 per Common Share and the 12.5% discount

Filing Documents

• d744992d8k.htm (8-K) — 28KB
• 0001193125-24-014234.txt ( ) — 140KB
• ck0001776738-20240122.xsd (EX-101.SCH) — 2KB
• ck0001776738-20240122_lab.xml (EX-101.LAB) — 16KB
• ck0001776738-20240122_pre.xml (EX-101.PRE) — 10KB
• d744992d8k_htm.xml (XML) — 3KB

01

Item 1.01. Entry into a Material Definitive Agreement. On January 22, 2024, the Cannabist Company Holdings Inc. (the "Company") entered into an exchange agreement (the "Exchange Agreement") with certain holders (the "Holders") of the Company's 6.0% senior secured convertible notes due June 2025 (the "Notes"), pursuant to which the Company agreed to repurchase (the "Repurchase") up to US$25 million principal amount of the Notes in exchange for common shares of the Company (the "Common Shares"). Pursuant to the terms of the Exchange Agreement, the Holders shall: by January 31, 2024, exchange, assign, transfer and sell ("Transfer") US$5 million principal amount of Notes in consideration of Common Shares issued at a price per Common Share equal to the greater of CAD$0.41 per Common Share and the 12.5% discount to the 5-day volume weighted average price of the Common Shares (the "Initial Exchange Price") on Cboe Canada Inc. (the "Exchange") prior to receipt of a Transfer notice; provided that the five-day volume weighted average price of the Common Shares on the Exchange is greater than CAD$0.47 as of the close of trading at 4:01pm on January 31, 2024, Transfer US$5 million principal amount of Notes in consideration of Common Shares issued at the Initial Exchange Price on or prior to February 29, 2024 (the "February Exchange"); and provided that the February Exchange is completed and the daily volume weighted average price of the Common Shares on the Exchange is greater than CAD$0.87 for 5 consecutive trading days, provided that, the trading volume of the Common Shares on the Exchange was equal to or greater than 600,000 Shares on the applicable trading dates, from the period commencing on January 1, 2024 and ending on June 30, 2024, transfer in three separate equal tranches, an aggregate of US$15 million principal amount of Notes in consideration of Common Shares issued at a price per Common Share equal to the greater of CAD$0.57 per Common Share and the 12.5% dis

03

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. The information contained in Item 1.01 of this Current Report on Form 8-K regarding the Exchange Agreement is incorporated by reference into this Item 2.03 of this Current Report to the extent required.

04

Item 2.04. Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement. The information contained in Item 1.01 of this Current Report on Form 8-K regarding the Exchange Agreement is incorporated by reference into this Item 2.04 of this Current Report to the extent required. 2

02

Item 3.02. Unregistered Sales of Equity Securities. The information contained in Item 1.01 of this Current Report on Form 8-K regarding the Exchange Agreement is hereby incorporated into this Item 3.02 by reference. The issuance of Common Shares pursuant to the Exchange Agreement is exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to Section 4(a)(2) thereof. 3 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. THE CANNABIST COMPANY HOLDINGS INC. By: /s/ David Sirolly Name: David Sirolly Title: Chief Legal Officer & General Counsel Date: January 24, 2024 4

View Full Filing

View this 8-K filing on SEC EDGAR