Troubled Cannabis Operator Schwazze Nears Debt Restructuring
(Bloomberg) – The cannabis industry begins to restructure with creditors who will cut off the debt burden of the dispensary operator and inject new money, while the cannabis industry is waiting for potential lock regulatory changes that can increase profits.
According to the people who know the situation, the company will give up more than 60 marijuana shops in exchange for cash injection of $ 65 million. Senior lenders will take over the property in a process known as Article 9, a cheaper and faster process than Chapter 11. Bankruptcy is not an option for the company due to lack of federal legislation covering grass.
Schwazze’s common and preferred shares are expected to be erased as part of the restructuring, people said not to be identified. Approximately 45 million dollars of cash from the agreement, the seller notes used to provide working capital will be used to finance the balance, he added.
People continue and said plans could change. Schwazze did not respond immediately to comments requests.
He said that senior guaranteed grade owners would offer a loan offer through an auction process to obtain a particular portion of the realization properties, and the rest of the places were subject to the wind.
Officially Medicine Man Technologies Inc. The company, called the company, is one of the many struggling pot attempts in federal legislation for the legalization of cannabis in the USA. This comes after President Donald Trump said that he had recently thought of the re -classification of marijuana as a less dangerous drug. Such a re -classification is expected to provide tax advantage to companies that sell legal, regulated cannabis and potentially increase profitability.
Schwazze is not the only cannabis operator using Article 9, which usually allows the guaranteed lenders to be foreseen on the collateral after the guarantee and then to disposal assets without resorting to section 11 protection. Separate Inc. In July, he launched such a restructuring.
Meanwhile, Schwazze, Oppenheimer & Co. He served as a legal adviser for interviews. A group of Ducera Partners and Paul Hastings, one of the creditors of the company, are working. Chicago Acts as an Atlantic Group Inc guarantee agent.
None of the advisors or creditor representatives responded to comments.
According to the public statements, the company received a default notification in December due to delays in the supervised financial reports. After the discovery of accounting errors, the company had to replace independent auditors and re -express their annual results for 2022 and 2023.
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