Multistate cannabis operator Acreage Holdings announced this week that it has agreed to a $12 million construction loan to complete the expansion of its cultivation and processing facility in the Illinois market.
The company financed with the Pelorus Fund, a cannabis-focused real estate investment trust, and carries an annual interest rate of 16% over a term of 18 months.
Construction is expected to be completed in the second quarter of 2021.
The company is building out an existing 80,000-square-foot facility that will increase its wholesale and retail capacity in dried flower, oil extracts and THC-infused beverages. Acreage has plans to launch Canopy Growth THC beverages in Illinois and California next summer.
“We have had an incredibly successful introduction into the Canadian cannabis-infused beverage industry with over 1.7 million cans of our THC-infused RTD beverages, like Tweed’s Houndstooth & Soda and Bakerstreet & Ginger sold to date,” shared Canopy Growth CEO David Klein back in October. “We introduced a new product category to cannabis consumers that we knew had the potential to disrupt one of the most mature industries and since launching in Canada, Canopy Growth now owns 5 of the top 6 SKUs in the beverage category with a 74% market share. We are excited for Canopy’s beverages to be introduced to the U.S. market next summer.”
“We see THC-infused beverages as a game-changer in U.S. cannabis, and we are excited to launch Canopy Growth’s unique beverage offerings to our core markets offering the greatest growth potential next year,” said Bill Van Faasen, interim CEO of Acreage Holdings. “We are already working on our beverage production capabilities, and look forward to tapping the wealth of experience and research Canopy can offer following its successful entry in the category last year.”
Acreage believes that the expansion will “lead to improved financial performance in the state.” The expanded product offerings are to consist of dried flower and oil extracts, with the company highlighting the intention to produce THC-infused beverages using IP licensed from Canadian partner Canopy Growth.
This past September the company had raised $33 million of capital at 7.5% interest, the proceeds of which were used to pay off higher-interest debt, including a short-term loan with an exorbitant 60% interest.