Grown Rogue International, a craft cannabis manufacturer based in Oregon (CSE GRIN), (OTC GRUSF), announced that it had secured a credit facility of $7 million from “a national commercial bank insured by the FDIC.”
The four-year credit facility carries an interest rate of around 9.2% per annum, calculated as the secured overnight financing rate (SOFR) – which is currently at 4.3% – plus 4.9%. The company announced Monday that the loan would be amortized in six years, with monthly interest and no prepayment penalty.
Obie Strickler, the CEO of a bank holding company ranked in the Top 50 in the United States said that the loan was closed at favorable terms. We appreciate the confidence the bank has in our company and look forward to further developing this relationship.
Grown Rogue stated that it would use the money to fund current growth initiatives and provide additional working capital. It will also refinance some existing debt. A general security agreement secures the company’s credit obligations.
This is a major milestone as the Oregon operator continues to expand across several states including Illinois, Michigan and New Jersey. Oregon, Michigan New Jersey and Illinois are just a few examples. All but Illinois have seen significant price reductions in the last few months.
The company is still executing its plans for expansion, and entered the New Jersey Market in December after its initial harvest. Construction on Phase II of its New Jersey plant is currently underway, and will be finished in the first half 2025. The facility is expected to produce 1,100 pounds of flower per month at full capacity.
Grown Rogue aims to finish Phase I in 2025, for Illinois.
In its press release, the company stated that “it continues to make modest investments in order to improve outdoor crafts cultivation capabilities in preparation of eventual interstate trade.”
The revenue for the company’s third quarter, ending September 30, 2024 is $7 million. This represents a 7% increase from $6.65 million during the same period last year.