Stifel | GMP Flash: Cresco Labs propels its liquidity position to amongst the strongest in the indus

Following the close of our sale of Valley Ag to Cresco Labs, we are now large shareholders in Cresco. We are excited by the fact that they have continued to attract capital and this non-dilutive offering bodes well for their future success. On January 23, Cresco Labs (CNSX: CL) announced a credit agreement for a senior secured term loan of up to $200m, with a first tranche of $100m expected to close by Jan. 30, 2020. The agreement provides for a mutual option to increase the size of the facility to its maximum of $200m. The loans carry a term length of 18 or 24 months (at the lenders’ option) and feature an annual coupon of 12.7% or 13.2%, respectively.

Cresco intends to use the loan proceeds to support the company’s expansion in Illinois, fund cash requirements to close and integrate pending acquisitions, and execute on other growth initiatives in key states.

Stifel | GMP Equity Research rates Cresco Labs a Buy, asserting that strong US cannabis operators such as Cresco can secure the capital necessary for growth.

Click here to read the full Stifel|GMP report.