4Front Sells Assets For $18M To Pay Down Debt, Exits Maryland And Pennsylvania
In a bid to reach cash flow positivity in the second half of 2020, 4Front Ventures Corp. (CSE:FFNT) (OTCQX:FFNTF) agreed to sell its non-core retail licenses in Maryland and Pennsylvania. The sale is expected to net Vancouver, Canada-based 4Front $18 million in cash.
Pending regulatory approval, the entire payment is expected to be received in the next 45 days. An unstated "majority" of the funds should be received in the coming week, according to a press release for the announcement.
Once fully received, $10 million will go towards paying down debts to Gotham Green Partners, a New York-based private equity firm known for deploying capital into cannabis companies.
Why It's Important
Altogether, the efforts represent 4Front's aim to concentrate on improving operations in other states, including California, Illinois, Massachusetts and Michigan.
The company, which owns the Mission dispensary brand, also announced an additional $4 million via a convertible debenture private placement led by Navy Capital. The placement is expected to finalize on May 4, or close to that date.
4Front CEO Leo Gontmakher said the transactions allow the company to not need additional funds in its bid to become cash flow positive.
"Our commitment to a lean corporate structure and focused execution allows us to achieve self-sufficient operations while minimizing dilution to our shareholders," Gontmakher said.
Gontmakher elaborated on the plans for 4Front.
"The momentum in our business is strong and we can now turn our complete attention to maximizing growth in our core geographies and expanding our vertical operations to take meaningful market share in nascent adult-use markets," he added.
Photo courtesy of 4Front
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