MariMed, Inc. (OTCQX: MRMD) (the “Company” or “MariMed”), a leading multi-state cannabis operator focused on health and wellness, today announced the closing of a $46 million financing facility with Hadron Healthcare Fund (“Hadron”) pursuant to the terms of a Securities Purchase Agreement (“SPA”).Today’s initial funding of $23 million, will be used to repay substantially all of the Company’s long-term debt other than mortgage-backed loans as well as to upgrade and expand MariMed’s owned and managed cannabis facilities. The balance of the committed funds will be available for MariMed to continue executing on its strategic plan and complete the consolidation of other state cannabis businesses into MariMed.
“We are thrilled to have been selected by Hadron as their preferred partner to complete this strategic investment in the US MSO sector,” said Bob Fireman, CEO of MariMed. “This financing is a substantial recognition of both the Company’s position in the industry as well as the strength and track record of our management team. This infusion of capital comes at a key inflection point for MariMed and will not only further strengthen our balance sheet, but also enable us to complete targeted acquisitions and strongly position us to act on other attractive opportunities for accelerated growth as the cannabis industry continues to evolve.”
MariMed intends to utilize this capital investment to position itself as one of the leading vertically integrated US multi-state cannabis operators. The Company expects to expand its cultivation capacity to increase cannabis production and implement automated technologies and specialized equipment to improve the efficiencies in the Company’s production labs and kitchens in order to produce greater volumes of MariMed’s portfolio of proprietary brands and infused products. MariMed’s executive leadership team has significant experience and an extensive track record of executing in the cannabis industry. To date, the MariMed team has successfully won 17 cannabis licenses in multiple states for itself and on behalf of its clients and has developed over 300,000 square feet of state-of-the-art, regulatory compliant cultivation, production and dispensing facilities.
“When we looked at the history of the MariMed and its management team, we strongly felt MariMed was the best opportunity for our continued interest and investment into the United States MSO space,” said Marco D’Attanasio, CIO of Hadron Capital (Cayman) Ltd, the investment manager of Hadron Healthcare Fund. “MariMed’s strong brand presence, operational excellence, and management track record, supported by our capital investment, will give them the best tools to continue to execute and drive stockholder value. We view MariMed assets and revenue as a platform to build a top professional and profitable MSO in the cannabis industry. We look forward to working with them as a long-term partner.”
Transaction Details
The SPA provides for the sale of up to $46 million of Series C Convertible Preferred Shares of the Company. At today’s initial closing, Hadron purchased $23 million of Units for $3.70 per Unit. Each Unit consists of one share of Series C Preferred Stock and a Common Stock purchase warrant. Each share of Series C Preferred Stock is convertible, at Hadron’s option, into five shares of Common Stock and each warrant is exercisable, at an exercise price of $1.087 per share, for one-half of a share of Common Stock for each conversion share (2 ½ warrants shares per Unit). The balance of the committed funds (up to $23 million) will be issued on the same terms as the securities issued today and will be available for MariMed to complete the consolidation of other state cannabis businesses units into MariMed. In addition, if Hadron exercises all of the warrants for cash, MariMed will receive additional proceeds of approximately $34 million. Beacon Securities Limited introduced the parties to the transaction.
About Hadron Capital (Cayman) Ltd
Hadron Capital (Cayman) Ltd is an independent investment manager with global reach that was founded in 2004. Hadron has a track record of strong returns and has won multiple performance awards over the years. Hadron was an early investor in some of the largest multi-state operators in the sector and its US cannabis investment portfolio is valued at over US $300 million. Hadron’s investment philosophy is strongly based on bottom-up, thorough and deep analysis. Hadron works with companies to unleash value and acts as a long-term financial partner and provider of capital for their portfolio companies.
