Ascend Wellness raises one of the largest debt deals ever among cannabis companies

By Steve Gelsi

Company is using proceeds of $235 million debt offering to prepay a three-year note

Ascend Wellness on Monday announced one of the largest-ever debt-raising transactions for a U.S. cannabis company, with a $235 million private placement of 12.75% senior secured notes due in 2029.

Ascend Wellness (AAWH) Chief Executive John Hartmann told MarketWatch the deal marks a "significant milestone" for Ascend Wellness at an interest rate that's lower than many debt financings in the cannabis space.

Seaport Global Securities LLC was lead financial adviser and sole placement agent for the transaction, which ranks as the fifth-largest in the sector, according to data from Viridian Capital.

The proceeds of the debt deal will be used partly to prepay $215 million of an existing term loan, in a move to "enhance the company's financial flexibility and strengthen its balance sheet," Ascend Wellness said.

The notes are being offered on a private-placement basis in Canada as well as in the U.S. to qualified institutional buyers and accredited investors.

Ascend Wellness's stock is down 17.8% so far in 2024, while the AdvisorShares Pure U.S. Cannabis exchange-traded fund MSOS has risen 8.4%.

-Steve Gelsi

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07-15-24 0919ET

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