Canadian company Heritage Cannabis to raise up to $20M via equity line of credit

Heritage Cannabis Holdings Corp. is raising up to $20 million from Obsidian Global Partners by way of an equity line of credit agreement in which Obsidian will purchase shares of the Canadian marijuana company in private placements over time – when Heritage wants it to.

Heritage will pay Obsidian a $300,000 initial fee using common shares that will be locked up for four months plus a day.

Toronto-headquartered Heritage will also pay another $300,000 fee in cash or shares after drawing $10,000,000 under the equity financing agreement.

Obsidian will not be issued shares that would result in the New York-headquartered company owning more than 9.99% of Heritage’s shares, according to a news release.

“Heritage will use the proceeds of the equity line of credit for general corporate purposes and expenses of the offering,” the company in a statement.

Heritage can request drawdowns as of March 2, 2023, or earlier if Obsidian agrees, with a 36-month term for the agreement, according to a regulatory filing.

Heritage has put more than 79 million shares in escrow, which will be subject to the same lockup as the initial fee payment.

Any unpurchased shares will be canceled at the end of the agreement.

Heritage recently announced its first U.S. product shipment to dispensaries in West Virginia via a relationship with West Virginia cannabis company Harvest Care Medical.

Shares of Heritage trade as CANN on the Canadian Securities Exchange.

Source: https://mjbizdaily.com/canada-heritage-cannabis-to-raise-up-to-20-million-via-equity-line-of-credit/