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November 8, 2024 What's Trending

CT cannabis company secures $40M revolving credit facility from ‘major commercial regional bank’

HBJ PHOTO | STEVE LASCHEVER A sea of cannabis flowers shown in Curaleaf’s Simsbury grow facility.
By Greg Bordonaro

Are federally insured banks warming up to the cannabis industry? 

A recent deal announced by a major cannabis company based in Connecticut could indicate the answer is yes.

Stamford-based Curaleaf Holdings Inc., the world’s largest publicly traded cannabis company, announced that it has secured a new $40 million revolving credit facility with a major commercial regional bank. 

Curaleaf — which operates four dispensaries and a cultivation facility in the state, and has other operations in the U.S. and internationally — said it will be able to draw down on the credit line “as needed for general corporate purposes and working capital needs.”

The company declined to name the bank involved in the deal, but Chairman and CEO Boris Jordan called the financing arrangement a “milestone event for Curaleaf.”

He said the “credit line provides flexibility traditionally not available to the cannabis sector, and allows us to continue growing Curaleaf as the leader of the global cannabis industry during what continues to be a difficult capital raising environment."

Banks and credit unions have been skittish about serving the marijuana industry because cannabis remains illegal at the federal level. In short, because marijuana is still a Schedule 1 drug at the federal level, it is illegal for banks and credit unions to lend to such companies. 

However, some financial institutions have quietly dipped their toes in the market by offering cannabis customers cash management services like accounts and deposits.

The Drug Enforcement Agency, at the urging of the Biden administration, has been in the process of potentially reclassifying marijuana as a Schedule III drug, which would ease restrictions on cannabis use. But it’s not clear what impact that would have on bank financing for the industry, or if a Trump administration would continue to support that policy shift. 

Curaleaf, which trades on the Toronto Stock Exchange, earlier this year identified Stamford as its new headquarters. 

The company operates in 17 states, and had 19 cultivation sites and 147 retail locations in the U.S. as of August.

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