After the markets closed on Monday, 4Front Ventures Corp. (CSE: FFNT) (OTCQX: FFNTF) announced that it had entered into a $10 million senior secured credit facility agreement with ALT Debt II, LP (the “Lender”), an affiliate of Altmore Capital. The company said that the money will be disbursed in two tranches and is committed to building out its retail operations in Illinois in connection with the imminent launch of its new cultivation and processing facility in Matteson.
“This additional capital will fuel our efforts to establish 4Front as a state leader across both our retail and wholesale channels in Illinois and position our operations for long-term, sustainable growth,” said Leo Gontmakher, Chief Executive Officer of 4Front. “With our new flagship facility in Matteson anticipated to power up before the end of the year, ramping up our retail operations will support a more than fourfold expansion of our production capacity in the state over the next twelve months. We currently have two Mission dispensaries in operation, and our goal is to have our full slate of 10 retail stores before the end of 2024. This funding represents an exciting next step in that direction. Matteson’s enhanced capacity, combined with the expansion of our dispensary network to 10 stores, has the potential to profitably double total Company sales.”
The outstanding principal of the Credit Facility will bear simple interest at a rate per annum equal to the greater of the WSJ Prime Rate plus 7% and 15.5%, payable monthly (principal payments postponed until six months after funding). Provided the company extends the maturity of certain other subordinated debt, the maturity date of the Credit Facility will be September 30, 2026.
Last week, 4Front did announced that it agreed to issue 1,283,425 subordinate voting share purchase warrants to the lender of a previously entered promissory note purchase agreement. The lender agreed to extend the maturity date of its loan, which has a principal amount of $2 million with a payment of an extension fee of C$65,000, which is payable in Warrants.
4Front reported its second-quarter earnings in August with revenues rising slightly along with the company’s net losses. At the time, 4Front said it was leaving the California market and turning its focus on Illinois. With the addition of a credit cushion, the company will be on its way to increasing its reach in Illinois.
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