A large-scale East Ladner greenhouse that’s been made the switch to cannabis has secured necessary financing to expand its operations.
Before the legalization of cannabis in Canada in 2018, Village Farms International partnered Emerald Health Therapeutics Inc. to form a new venture called Pure Sunfarms.
Now selling to the B.C. and several other provincial cannabis distribution branches, Pure Sunfarms recently got the go-ahead from Health Canada, based on the company’s initial production area, to expand into a second 1.1 million square foot greenhouse facility at the site, allowing it to expand capacity as needed through successive license amendments.
Emerald last week announced that Pure Sunfarms has further expanded its credit facility with a lending syndicate led by Bank of Montreal, and including Farm Credit Canada and the addition of CIBC, to its full $59 million capacity with the completion of the credit facility’s accordion feature.
A credit facility is a loan that allows a business to take out money over a period of time rather than reapplying for a loan each time it needs funds, while an accordion is a provision that allows a borrower to expand the maximum allowed on a credit line.
The credit facility for Pure Sunfarms now consists of a $15 million revolving operating loan and a $25 million term loan, in addition to its existing $19 million loan, Emerald explained in a news release.
The new term loan is specifically designated for the 1.1 million square foot “Delta 2” greenhouse, while the existing term loan is specifically designated for the 1.1 million square foot “Delta 3” greenhouse facility that’s already been growing cannabis.
Each of the components of the credit facility, including the existing term loan, mature on February 7, 2022, the company notes.
“We are pleased to see the completion of this credit facility by top-tier Canadian commercial lenders, which today is a relatively unique accomplishment in the cannabis space,” said Riaz Bandali, CEO, of Emerald Health.
“This facility provides Pure Sunfarms with significant access to capital to continue building on its business successes.”