Cannabis operator Red White & Bloom restructures debt

Canada-based cannabis multistate operator Red White & Bloom Brands has restructured about 145 million Canadian dollars ($105 million) of issued outstanding debt as part of a larger debt-renewal program.

The transaction is expected to reduce shareholder dilution, lower debt-carrying costs and enable the Toronto-headquartered company to refocus its operations on “profitable growth initiatives,” according to a news release.

The restructuring:

• Eliminated the potential dilution of 198 million common shares, accounting for 42.1% of the issued and outstanding common shares.
• Extended maturity dates for CA$33 million of restructured debt to November 2026 with the balance of $112 million extended through September 2017.
• Deferred cash interest and principal payments for the restructured debt until their new maturity dates.
• Reduced principal by $5 million and achieved annualized interest expense savings of $2.5 million.

According to the release, Red White & Bloom’s year-end audit has been delayed because of the expanded scope of the procedures required to address the complexity of some transactions and the comparative financial information for previous periods.

The company, which operates in such U.S. markets as Arizona, California, Florida, Illinois, Massachusetts and Michigan, said it expects to complete and file the audit by May 30.

The restructuring comes only four months after a Michigan circuit court appointed a receiver for the assets of PharmaCo, a property Red White & Bloom acquired in February 2022.

Shares of Red White & Bloom trade on the Canadian Securities Exchange as RWB.