Green Organic Dutchman Announces $77M Funding Package

The Green Organic Dutchman Holdings Ltd. (TSX: TGOD) (OTC: TGODF) announced Thursday it has signed arrangements for up to CA$103 million ($77.6 million) in funding that consists of a sale-leaseback agreement for the Ancaster Energy Centre, a convertible equity note term sheet and a construction mortgage loan term sheet.

The sale-leaseback agreement for the Ancaster Energy Centre will generate proceeds of CA$23 million, the company said. The deal has a 10-year term, after which the company can buy back the energy center for CA$1. 

The company also signed a term sheet with an investment fund for a $30-milion note with a 5% coupon, convertible into shares of The Green Organic Dutchman.

A construction mortgage loan term sheet with an investment fund is for CA$40 million and is secured with the facilities at Ancaster and Valleyfield, according to The Green Organic Dutchman. 

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The company aims to close the transactions by the end of the fourth quarter, but said there is no guarantee they will occur by then — or at all.

The cannabis company said it plans to use the capital to finalize the building of the processing facility at Ancaster and the construction of six zones in the Valleyfield hybrid greenhouse, as well as to support working capital demands until it generates positive operational cash flow and realizes national distribution of its products next year.

"Our ability to raise capital, despite recent headwinds affecting the entire sector, is a clear show of confidence from our financial partners," CEO Brian Athaide said in a statement.

"It is reflective of the value of our significant assets, the trust investors are putting into TGOD's strong corporate governance, transparency and accountability, and the opportunity for the company's unique positioning to quickly capture and grow the organic segment."