AFC Gamma Provides Senior Secured Credit Facility to Women-Owned Grön Edibles
AFC Gamma (NASDAQ: AFCG) has provided a senior secured credit facility to Grön Holdings, a major producer of cannabis-infused edibles. This funding will help Grön expand into new states, particularly on the East Coast. AFC Gamma's CEO highlighted the company's capacity to offer adaptable financing solutions, while Grön's CEO praised AFC Gamma's swift execution and professionalism. The credit facility is secured by all of Grön's assets. This partnership aims to bolster Grön's multi-state presence and diversify AFC Gamma's portfolio. Grön, founded in 2015, currently operates in several states and across Canada.
- AFC Gamma's credit facility will enable Grön to expand into new states, especially on the East Coast.
- The financing solution is tailored and flexible, demonstrating AFC Gamma’s ability to meet unique borrower needs.
- Grön's expansion will likely strengthen its position as a leading edibles provider in North America.
- Grön has a diverse product line and operates in multiple states and Canada, indicating a strong market presence.
- The entire credit facility is secured by Grön's assets, reducing investment risk for AFC Gamma.
- AFC Gamma's portfolio will diversify further with this new partnership.
- The credit facility is secured by all assets of Grön, indicating high leverage and financial risk for Grön.
- Expansion into new states involves significant costs and risks, which could impact Grön's financial stability.
Insights
AFC Gamma's senior secured credit facility to Grön Holdings Inc. is a noteworthy development, particularly because it highlights AFC Gamma's strategic positioning in the cannabis industry. A senior secured credit facility implies that AFC Gamma has a higher claim to Grön's assets in case of any default, securing their investment. For retail investors, this could show AFC Gamma’s confidence in the business model and growth potential of Grön. Additionally, this kind of lending is less risky for AFC Gamma compared to equity investments since it provides safer returns.
Regarding Grön, the infusion of capital will enable them to expand into new markets, particularly on the East Coast. This geographical expansion is important for Grön to increase its market share and revenue. The timing is also significant as multiple states are increasing their legal cannabis markets.
For investors in AFC Gamma, this deal could indicate potential for increased revenue and diversification of AFC Gamma’s portfolio, which are positive signals. However, they should be aware of market risks associated with the cannabis industry, including regulatory changes and market saturation.
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From a market research perspective, Grön's expansion into new states is a pivotal move that aligns with the broader trend of cannabis legalization across the United States. The increased demand for high-quality cannabis-infused edibles presents a lucrative opportunity for Grön. Their emphasis on using organic, single-origin and Fair Trade Certified ingredients could give them a competitive advantage in states with a strong consumer preference for premium products.
The partnership with AFC Gamma also signals potential positive outcomes for stakeholders. This strategic expansion could lead to increased brand recognition and consumer loyalty, important factors for long-term growth. Investors may find this appealing, as entering new markets generally results in higher revenue streams and profitability.
However, it’s important to note that market entry involves significant costs and operational challenges. Success will depend on Grön’s ability to navigate regulatory landscapes, manage supply chains and effectively market their products.
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The legal landscape of cannabis is complex and varies significantly from state to state. Grön's expansion into new markets will require thorough compliance with varying state and local regulations. This means ensuring proper licensing, meeting health and safety standards and navigating any legal restrictions on advertising and distribution.
AFC Gamma’s provision of a senior secured credit facility likely reflects a well-structured legal arrangement that protects their interests. For retail investors, understanding the legal risks involved in the cannabis sector is crucial. These include potential changes in state laws, federal regulations and enforcement actions that could impact operational capabilities and profitability.
Additionally, the first-lien term loan secured by all assets of Grön provides AFC Gamma with substantial collateral. This puts them in a strong legal position and reduces their exposure to risk, making the investment in Grön less risky from a legal standpoint.
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Funding will allow Grön to expand its footprint into new markets
WEST PALM BEACH, Fla., May 23, 2024 (GLOBE NEWSWIRE) -- AFC Gamma, Inc. (NASDAQ:AFCG) (“AFC Gamma”) today announced that it has provided a senior secured credit facility to Grön Holdings Inc. (“Grön” or “Grön Edibles”), one of North America’s largest producers of adult-use cannabis-infused edibles. Grön intends to use the proceeds from the new credit facility to expand its business into new states.
“We are excited to support Grön in catalyzing the next phase of the company’s growth as they expand further into the East Coast and solidify their position as a leading edibles provider,” said Daniel Neville, AFC Gamma’s Chief Executive Officer. “This transaction demonstrates our ability to provide flexible and tailored financing solutions that meet the unique requirements of our borrowers at all stages of their growth, while also broadening and diversifying AFC Gamma’s portfolio.”
Christine Apple, Grön's Founder and Chief Executive Officer, concurred, adding, "We are pleased to partner with AFC Gamma as we expand Grön's multi-state presence. We are impressed by the flexible financing solution presented to us, the speed in which they were able to execute, and the team's professionalism that made the process seamless and efficient. With the additional capital, we look forward to continuing to execute on our business plan and are specifically excited about our expansion to the East Coast.”
Grön Edibles was founded by Apple in 2015 in Oregon following her curiosities about gummy and chocolate with the desire to fill a market need in high-quality cannabis-infused edibles. Women-founded and led, Grön has since expanded into multiple product lines and is available in select states nationally.
AFC Gamma will hold the entire credit facility, which consists of a first-lien term loan secured by all assets of Grön. AFC Agent LLC served as agent for this transaction. SSC Advisors acted as Financial Advisor to Grön Holdings with respect to this transaction.
About AFC Gamma, Inc.
AFC Gamma, Inc. (NASDAQ: AFCG) is a publicly-traded, institutional lender that originates, structures and underwrites loans secured by commercial real estate and other types of financing solutions. AFC Gamma targets direct lending and bridge loan opportunities typically ranging from
About Grön Holdings Inc.
Grön is one of North America’s largest producers of adult-use cannabis-infused edibles. Grön’s passionate team of seasoned executives, chocolatiers, and confectioners come from all over the world and every walk of life, joining together to create something beautifully delicious for you. The company’s ingredients are organic, single-origin, Fair Trade Certified, and locally sourced whenever possible. Product offerings include Sugar-Coated Pearls, MEGAs, cannabis-infused chocolate, and Pips. Since inception, Grön has led the cannabis edibles category with a vast selection of expanding product lines. Product innovation continues to shape our offerings in markets hungry for something new. Grön cannabis edibles are available in Arizona, Missouri, Nevada, New Jersey, New York, Oregon, and across Canada, with multiple new markets added by the end of 2024. For more information, visit www.eatgron.com.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the company’s current views and projections with respect to, among other things, operating results. All statements other than historical facts, are forward-looking statements. Words such as “believes,” “expects,” “will,” “intends,” “plans,” “guidance,” “estimates,” “projects,” “anticipates,” and “future” or similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions and are not guarantees of future performance, conditions or results. Certain factors, risks and uncertainties discussed under the caption “Risk Factors” and elsewhere in AFC Gamma’s most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings, could cause actual results and performance to differ materially from those projected in these forward-looking statements.
Investor Relations Contact:
Robyn Tannenbaum
(561) 510-2293
ir@afcgamma.com
www.afcgamma.com
Media Contact:
Profile Advisors
Rich Myers and Rachel Goun
(347) 343-2999
afcgamma@profileadvisors.com
FAQ
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