Verano Holdings Corp. Completes Acquisition, Secures $150M Loan

TL;DR

Verano just closed a deal, snagged $150M on a $250M loan, and dropped some unregistered shares. Big moves!

AI Summary

On August 16, 2024, Verano Holdings Corp. reported the completion of an acquisition, the creation of a direct financial obligation, and unregistered sales of equity securities. The company entered into a credit agreement for a $250 million senior secured term loan facility, with an initial borrowing of $150 million. Additionally, Verano Holdings Corp. issued 1,000,000 subordinate voting shares to an affiliate of its principal shareholder, which were not registered under the Securities Act of 1933.

Why It Matters

This filing indicates Verano Holdings Corp. is expanding its operations through acquisition and has secured significant debt financing, which could impact its financial leverage and future growth prospects.

Risk Assessment

Risk Level: medium — The company has taken on significant debt and issued unregistered shares, which introduces financial and regulatory risks.

Key Numbers

• $250.0M — Senior Secured Term Loan Facility (Total available credit)
• $150.0M — Initial Borrowing (Amount drawn on the term loan facility)
• 1.0M — Subordinate Voting Shares Issued (Shares issued to an affiliate)

Key Players & Entities

• Verano Holdings Corp. (company) — Registrant
• August 16, 2024 (date) — Date of earliest event reported
• $250 million (dollar_amount) — Senior secured term loan facility amount
• $150 million (dollar_amount) — Initial borrowing under the credit agreement
• 1,000,000 (dollar_amount) — Number of subordinate voting shares issued
• Securities Act of 1933 (legal_document) — Regulation for share issuance

FAQ

Key Financial Figures

• $90 m — inia Members for total consideration of $90 million, subject to adjustments as set fo
• $20 million — a Closing Consideration, consisting of: $20 million in cash and $40 million of Class A subo
• $40 million — consisting of: $20 million in cash and $40 million of Class A subordinate voting shares of
• $30 million — n addition, the Virginia Buyer issued a $30 million promissory, subject to adjustment, to t
• $1.75 million — Note is payable in monthly payments of $1.75 million for the first 12 months, and $750,000 f
• $750,000 — 75 million for the first 12 months, and $750,000 for the remaining months. The princip
• $9.9 m — izona Member for total consideration of $9.9 million, payable in cash, subject to adju
• $5.1 m — SWC Members for total consideration of $5.1 million, payable in cash, subject to adju

Filing Documents

• form8-k.htm (8-K) — 55KB
• ex10-2.htm (EX-10.2) — 53KB
• ex99-1.htm (EX-99.1) — 27KB
• ex99-1_001.jpg (GRAPHIC) — 4KB
• ex99-1_002.jpg (GRAPHIC) — 4KB
• 0001493152-24-033491.txt ( ) — 328KB
• vrnof-20240816.xsd (EX-101.SCH) — 3KB
• vrnof-20240816_lab.xml (EX-101.LAB) — 33KB
• vrnof-20240816_pre.xml (EX-101.PRE) — 22KB
• form8-k_htm.xml (XML) — 3KB

03 to the extent required herein

Item 2.03 to the extent required herein. Item 3.02 Unregistered Sales of Equity Securities. As previously disclosed on the Current Report on Form 8-K filed on July 31, 2024 the Virginia EPA contemplated the issuance of the Shares to the Virginia Members. On the VA Closing Date, the Company issued $40 million of Shares to certain of the Virginia Members. The information disclosed under Item 1.01 of this Current Report on Form 8-K as it relates to the issuance of Shares is incorporated by reference into this Item 3.02 to the extent required herein. The Company issued the Shares pursuant to the Virginia EPA in reliance upon the exemptions from the registration requirements of the Securities Act of 1933, as amended, provided by Section 4(a)(2) of the Securities Act and Rule 506(c) of Regulation D promulgated thereunder. No non-accredited investors received Shares. None of CC East Virginia, Cannabist or the Virginia Members will get registration rights in connection with the issuance of the Shares pursuant to the Virginia EPA. Item 8.01 Other Events On August 22, 2024, the Company issued a press release announcing the closing of the transactions pursuant to the Agreements. A copy of such press release is filed as Exhibit 99.1 to this report. The information furnished under this item 8.01, including Exhibit 99.1 incorporated by reference herein, shall not be deemed "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act Item 9.01 Financial (d) Exhibits Exhibit No. Description 10.1 Equity Purchase Agreement, dated July 29, 2024, among Verano Holdings, LLC, Verano Holdings Corp., Columbia Care Eastern Virginia LLC and the members of Columbia Care Eastern Virginia LLC and The Cannabist Company Holdings Inc. (incorporated by reference from the Current Rep

View Full Filing

View this 8-K filing on SEC EDGAR