Calgary, Alberta-based Sundial Growers Inc. SNDL acquired acquired a special purposed vehicle that owns $58.9 million of Zenabis Global's senior secured debt.
The loan carries interest at a rate of 14% annually, with a maturity date of March 31, 2025. In addition, it's secured by Zenabis' assets as well as assets of its subsidiaries.
Under the deal, Zenabis agreed to pay Sundial a royalty on the basis of its sales revenues from its medical, recreational and wholesale cannabis line, payable for 32 fiscal quarters.
The royalty includes: 3.5% of Net Cannabis Revenue where the Net Cannabis Revenue does not exceed $25 million; 3.0% of Net Cannabis Revenue where Net Cannabis Revenue ranges between $25 million and $30 million; 2.5% of Net Cannabis Revenue where Net Cannabis Revenue ranges between $30 million and $37.5 million; and 2.0% of Net Cannabis Revenue where Net Cannabis Revenue exceeds $37.5 million.
Sundial funded the investment with its available cash reserves totaling $110 million prior to the acquisition's closing.
The company recently entered the edibles market in Canada via a deal with chocolatier company Choklat Inc. The partnership resulted in the launch of a cannabis-infused confectionary brand.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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