Standard Wellness Holdings, LLC, a multi-state cannabis operator, has successfully secured a $10 million credit facility to refinance high-cost debt and bolster its growth strategy. The loan, structured as a 10-year term with an amortization period of 20 years, positions the company to achieve greater financial stability and expand its operations across key markets.
Strategic Move to Reduce Debt Costs
The $10 million loan comes with an attractive interest rate of 9.25%, a significant improvement compared to the 13.5% rate on debt maturing in 2026. This refinancing effort is expected to save the company over $1.2 million annually in interest expenses, which can now be redirected to strategic growth initiatives.
Jared Maloof, CEO of Standard Wellness, expressed his confidence in the new arrangement. “This financing highlights the trust our financial partners have in our business and its future. With 75% of our debt now maturing in 2033 or beyond, we’ve solidified a foundation for long-term stability and growth,” he said.
Highlights of the Credit Facility
- Loan Amount: $10 million
- Term: 10 years, amortized over 20 years
- Interest Rate: 9.25%
- Impact: Annual savings of $1.2 million in interest costs
This deal also showcases Standard Wellness’ ability to attract favorable financial backing in a challenging market, signaling robust operational health and growth prospects.
Building a Financially Stronger Future
The refinancing effort was spearheaded by Kyle Ciccarello, Vice President of Finance at Standard Wellness. Ciccarello emphasized the impact of this move on the company’s financial strategy, stating, “Reducing our weighted average cost of debt below 9.75% not only saves money but also enhances our ability to reinvest in critical areas for growth.”
He further highlighted that the company’s approach to refinancing reflects a broader effort to create a financially resilient business model. This is especially crucial as cannabis operators face unique challenges in accessing traditional banking and credit facilities.
Advisors and Legal Counsel
The deal was structured with the assistance of trusted financial advisors and legal counsel:
- Financial Advisor: Gramercy Capital Group, LLC
- Legal Counsel: Dentons US LLP
Their expertise ensured smooth execution of the transaction, enabling Standard Wellness to seize this opportunity for financial optimization.
Expanding Footprint in the Cannabis Market
Standard Wellness, founded in 2017, operates across Ohio, Missouri, and Utah and holds additional licenses in Maryland. With a vertically integrated business model, the company manages cultivation, processing, and dispensary operations, positioning itself as a comprehensive player in the cannabis market.
- Operates five retail locations under The Forest brand
- First-ever legal marijuana sale in Ohio
- Pioneered cannabis delivery to Utah pharmacies in February 2020
The company employs around 350 people and remains committed to improving quality of life through safe, legal cannabis access for medical and adult use.
Industry Implications
Standard Wellness’ success in securing this facility at a competitive rate reflects a broader trend in the cannabis industry: a growing ability to attract traditional financing. Historically, cannabis operators have faced hurdles due to regulatory and legal barriers. However, deals like this demonstrate shifting perceptions and increasing investor confidence in the sector’s potential.
While challenges remain, particularly in accessing federal banking services, moves like this signal that established players with strong business models can navigate these complexities effectively.
A Table Snapshot of the Impact
| Aspect | Previous Debt | New Debt | Impact |
|---|---|---|---|
| Interest Rate | 13.5% | 9.25% | $1.2M annual interest savings |
| Maturity Date | 2026 | 2033 | Long-term financial stability |
| Weighted Average Debt Cost | Above 9.75% | Below 9.75% | Improved financial health |
Looking Ahead
As Standard Wellness leverages the savings and stability brought by this credit facility, the company is poised to scale its operations and invest in innovative solutions. With a strong presence in its existing markets and plans for further expansion, the company continues to set benchmarks for financial and operational excellence in the cannabis industry.
This move not only strengthens the company’s bottom line but also reaffirms its commitment to sustainable growth in a competitive market.
Michael Brown is a seasoned journalist with a knack for uncovering compelling stories within the realm of cannabis. Through his investigative reporting and in-depth analysis, he sheds light on the regulatory challenges, market trends, and societal impacts of the burgeoning cannabis industry. Michael’s commitment to objective journalism and ethical reporting makes him a trusted voice in providing readers with balanced and informative articles about this rapidly evolving landscape.
