New company launched to serve debt-starved marijuana companies

Marijuana companies looking to access the debt market to expand their business have a new lender they can turn to for funding.

Trichome Yield Corp. is intended to provide debt financing and offer a suite of professional services for emerging and established cannabis companies, both in Canada and around the world, according to a news release.

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The new venture is a subsidiary of Canada’s CannaRoyalty, which invests in Canadian and U.S.-based cannabis companies.

According to CannaRoyalty, Trichome’s financing offers less dilution than equity or cannabis “offtake” alternatives – two of the most common ways to raise capital in the marijuana sector.

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“We do recognize and are looking to full the banking void, but thinking longer term, we are also seeking to become a trusted strategic partner who can provide more than just financial value as you’d typically get with a banking relationship,” said CannaRoyalty Vice President Kevin Jarrett.

Trichome was co-founded along with real-estate investor Sprott Inc. and Stoic Advisory, an independent cannabis-focused consulting firm.

Debt financing is generally less dilutive than equity financing.

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It allows business owners to own a larger share of the companies they are building, making it more appealing to fast-growing companies in the sector.

But debt has been hard to come by for capital-hungry marijuana companies in the absence of Canada’s biggest lenders, even as credit unions have led the way when it comes to offering debt.

“The market is missing a straightforward ‘one-size fits all’ asset-backed investment product,” Jarrett said.

Matt Lamers can be reached at [email protected]

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