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Trichome Financial Commits up to $2MM in Financing to Licensed Ontario Cannabis Retailer

March 18, 2019, 08:00 AM
Filed Under: Cannabis

Trichome Financial Corp. announced that it has entered into a $2 million financing arrangement with C.G.S. Foods Inc., a licensed Ontario cannabis retailer also known as Ganjika House. Ganjika House was one of only 25 winners of the recent lottery conducted by the Alcohol and Gaming Commission of Ontario (AGCO) and is one of the first 5 to receive its Cannabis Retail Operator License and Retail Store Authorization. Ganjika House plans to open its location at 186 Main Street South in Brampton, Ontario, on April 1, 20191.

"The Trichome team has been impressed with the entrepreneurial spirit, commitment and vision of C.G.S. founder and sole shareholder Clint Seukeran," said Michael Ruscetta, CEO of Trichome. "Ontario represents the largest retail opportunity in Canada. We believe C.G.S. possesses a significant first mover advantage in a constrained regulatory environment and is well-positioned to earn attractive returns on invested capital while being ideally positioned for industry growth and consolidation. Ganjika House represents a bold vision for cannabis retail and Trichome looks forward to partnering with Clint on this unique platform opportunity."

Under the terms of the Financing, Trichome has agreed to provide C.G.S. with up to $2 million for a period of two years, comprised of a Revolving Credit Facility and Term Loan, both of which are fully secured. The Financing provides Trichome with attractive rates of contractual cash flow and warrants to acquire, for a period of 5 years, a minimum of 10.3% and up to 13.3% of the common shares of C.G.S. should the entire term loan be drawn. C.G.S. may draw up to $1 million on the Revolving Credit Facility against eligible inventory and will draw half of the Term Loan immediately. 

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