Ohio-based marijuana multistate operator (MSO) Standard Wellness Holdings has successfully secured a $10 million credit facility to strengthen its financial foundation and support its expansion plans. The loan comes at a critical time for the company as it seeks to streamline its operations and enhance its competitive edge in a growing industry.
Key Loan Details and Strategic Impact
The loan, structured as a 10-year term facility with an interest rate of 9.25%, amortizes over 20 years. It replaces higher-cost debt that carried a 13.5% interest rate and was due to mature in 2026. This financial maneuver not only reduces the company’s borrowing costs but also extends the maturity of most of its debt to 2033 or beyond, offering increased stability for long-term planning.
“This new financing partnership underscores our financial partners’ confidence in our business model and growth trajectory,” said Standard Wellness CEO Jared Maloof. He emphasized that the extended debt maturity enhances the company’s ability to execute its strategic vision with greater flexibility and reduced financial pressure.
Savings and Reinvestment Opportunities
Kyle Ciccarello, Standard Wellness’ vice president of finance, led the refinancing effort. He highlighted the immediate financial benefits, stating, “This facility, when combined with other recent refinancings, will deliver over $1.2 million in annual interest savings.”
These savings are expected to play a crucial role in fueling the company’s growth. Standard Wellness plans to reinvest in strategic initiatives, such as expanding operations in key markets and acquiring new assets.
- Immediate Benefits of the Loan:
- Reduction of the company’s weighted average cost of debt to under 9.75%.
- Over $1.2 million in annual interest savings.
- Improved financial stability and flexibility for long-term investments.
Expansion Efforts Across Multiple States
Standard Wellness, headquartered in Ohio, has steadily expanded its footprint in the medical marijuana industry. Beyond Ohio, the company operates in Maryland, Missouri, and Utah.
Earlier this year, Standard Wellness made headlines with its $6.5 million acquisition of a medical marijuana dispensary in Springville, Utah. The deal marked a significant step in solidifying its presence in the state, which has shown increasing demand for medical cannabis products.
Ciccarello noted that the refinancing effort aligns with the company’s broader goal of optimizing its financial structure to support these kinds of growth-oriented moves.
Key Players in the Deal
The loan was facilitated with the assistance of New York-based Gramercy Capital Group, which acted as the financial adviser. Meanwhile, legal counsel for the transaction was provided by Dentons US, a Washington, D.C.-based law firm known for its expertise in cannabis industry deals.
Both partners brought their extensive experience to ensure a smooth transaction that aligns with Standard Wellness’ growth ambitions.
A Positive Trajectory in a Competitive Market
As the medical marijuana sector continues to expand, MSOs like Standard Wellness are capitalizing on opportunities to strengthen their position. The company’s ability to refinance at favorable terms reflects the confidence financial partners have in its business model and strategic direction.
Standard Wellness’ leadership has expressed optimism about its future, with CEO Jared Maloof stating, “With this facility, we are well-positioned to continue executing our long-term strategy while delivering value to our stakeholders.”
The company’s disciplined approach to managing its debt load, combined with strategic acquisitions, underscores its commitment to sustainable growth in a competitive and evolving industry.