Valley Bank’s New Jersey Commercial Banking Team Closes a $150 Million Syndicated Credit Facility to Green Thumb Industries Inc.

Rhea-AI Summary

Valley National Bank, a subsidiary of Valley National Bancorp (NASDAQ: VLY), has closed a $150 million five-year Senior Secured Term Loan Facility for Green Thumb Industries Inc. (CSE: GTII) (OTCQX: GTBIF), a leading cannabis company. Green Thumb will use the proceeds to retire its $225 million senior secured debt due April 30, 2025. Valley acted as the Sole Lead Arranger, Sole Bookrunner, and Administrative Agent for the deal.

This transaction marks a significant milestone as it's considered a first-of-its-kind credit facility for the U.S. cannabis industry. Green Thumb, headquartered in Chicago, operates 20 manufacturing facilities and 98 retail locations across 14 U.S. markets, employing approximately 4,700 people.

Positive

• Valley Bank secured a $150 million loan facility for Green Thumb Industries, demonstrating its ability to arrange large-scale financing
• The deal positions Valley Bank as a leader in providing financial services to the growing cannabis industry
• The transaction showcases Valley Bank's innovative structuring capabilities in a challenging regulatory environment

Negative

• None.

Financial Analyst

Valley Bank's $150 million syndicated credit facility to Green Thumb Industries (GTI) marks a significant milestone in cannabis industry financing. This deal demonstrates increasing mainstream financial acceptance of cannabis businesses, potentially lowering borrowing costs and improving capital access for the sector. The five-year term provides GTI with extended financial flexibility, while the $225 million debt retirement enhances their balance sheet. As the first syndicated transaction for GTI, it sets a precedent for future deals. The involvement of a tailored syndicate of bank market investors suggests growing institutional interest in cannabis, which could lead to more favorable financing terms for the industry. This transaction may catalyze similar deals, potentially accelerating growth and consolidation in the cannabis market.

Legal Expert

This credit facility represents a landmark legal development for the U.S. cannabis industry. Despite cannabis remaining federally illegal, a major bank has structured a significant loan to a cannabis company, indicating a shift in risk assessment and legal interpretation. The deal's success suggests that financial institutions have found ways to navigate the complex regulatory landscape, potentially opening doors for more banking services to cannabis businesses. However, it's important to note that this doesn't signify full legal clarity. The industry still operates in a gray area and changes in federal enforcement priorities could impact such arrangements. The transaction's structure and Valley Bank's role as Sole Lead Arranger and Administrative Agent will likely be closely scrutinized by other financial institutions and regulators, potentially setting precedents for future cannabis industry financing.

Market Research Analyst

This financing deal signals a maturing cannabis market and could have far-reaching implications for the industry's growth trajectory. Green Thumb's extensive operations across 14 U.S. markets with 98 retail locations underscore the scale of established cannabis businesses. The company's focus on "brands that Americans love" aligns with a shift towards consumer packaged goods in the cannabis space, potentially accelerating market penetration and normalization. The emphasis on cannabis as a means of "well-being" reflects a broader trend of positioning cannabis products within the wellness sector, which could expand the consumer base. This deal may trigger a domino effect, encouraging other banks to enter the cannabis lending space and potentially leading to more favorable terms for cannabis companies. As a result, we might see accelerated expansion, increased M&A activity and more robust competition in the coming years.

NEW YORK--(BUSINESS WIRE)-- Valley National Bank, the wholly-owned subsidiary of Valley National Bancorp (NASDAQ: VLY), announces the closing of a $150 million five-year Senior Secured Term Loan Facility to Green Thumb Industries Inc. (“Green Thumb or the “Company”) (CSE: GTII) (OTCQX: GTBIF), a leading national cannabis consumer packaged goods company and owner of RISE Dispensaries. The Company intends to use the proceeds along with existing cash to retire its $225 million senior secured debt due April 30, 2025.

Valley is the Sole Lead Arranger, Sole Bookrunner, and Administrative Agent for the deal in conjunction with a tailored syndicate of bank market investors. The transaction was arranged, structured, undertaken, and syndicated by Valley’s Syndications Team who led GTI’s first syndicated transaction with an innovative structure and created a syndicate tailor-made to support GTI today and in the future.

Headquartered in Chicago, Illinois, Green Thumb Industries has 20 manufacturing facilities, 98 retail locations and operations across 14 U.S. markets. Established in 2014, Green Thumb employs approximately 4,700 employees and serves millions of patients and customers each year.

“We are proud to continue our partnership with GTI, a proven leader in the consumer-packaged goods and wellness industry,” remarked John Meyer, Senior Vice President of Commercial Banking at Valley. “Valley is committed to relationship banking at scale and to providing tailored solutions to our client base. We are thrilled to have delivered an innovative loan structure to GTI that was successfully syndicated in the bank market.”

“This financing is a first-of-its kind credit facility for the U.S. cannabis industry, marking a major step for Green Thumb and cannabis more broadly,” said Green Thumb Founder, Chairman and Chief Executive Officer Ben Kovler. “We plan to double down on our efforts to build brands that Americans love. Cannabis is a means towards more well-being, and we know Americans are craving well-being now more than ever. The future of America is more cannabis, and this debt arrangement allows us to invest for the future of America’s well-being. We are grateful to Valley for being great partners and providing a tailored solution that fits Green Thumb’s needs.”

About Valley

As the principal subsidiary of Valley National Bancorp, Valley National Bank is a regional bank with over $62 billion in assets. Valley is committed to giving people and businesses the power to succeed. Valley operates many convenient branch locations and commercial banking offices across New Jersey, New York, Florida, Alabama, California and Illinois, and is committed to providing the most convenient service, the latest innovations and an experienced and knowledgeable team dedicated to meeting customer needs. Helping communities grow and prosper is the heart of Valley’s corporate citizenship philosophy. To learn more about Valley, go to www.valley.com or call our Customer Care Center at 800-522-4100.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240912813902/en/

Pam Golden

(973) 564 - 8591

pam@glapr.com

Source: Valley National Bank

FAQ

What is the value of the credit facility Valley Bank arranged for Green Thumb Industries (GTBIF)?

Valley Bank arranged a $150 million five-year Senior Secured Term Loan Facility for Green Thumb Industries (GTBIF).

How will Green Thumb Industries use the proceeds from the Valley Bank (VLY) credit facility?

Green Thumb Industries plans to use the proceeds, along with existing cash, to retire its $225 million senior secured debt due April 30, 2025.

What roles did Valley Bank (VLY) play in the credit facility arrangement for Green Thumb Industries?

Valley Bank acted as the Sole Lead Arranger, Sole Bookrunner, and Administrative Agent for the credit facility deal with Green Thumb Industries.

Why is the Valley Bank (VLY) credit facility to Green Thumb Industries significant for the cannabis industry?

The credit facility is considered a first-of-its-kind for the U.S. cannabis industry, marking a major step for both Green Thumb and the cannabis sector in accessing traditional banking services.