EXCLUSIVE: Pelorus Equity Group completes $77.3m debt financing with Harborside

Pelorus Equity Group a company that provides home loans to cannabis businesses has completed the second and final installment of its previously announced Non-dilutive mortgage financing of $77.3 million with Harborside Inc. HBOR HBORF.

The initial financing consisted of three separate loans to UL Holdings Inc. (“Urbn Leaf”), one of California’s leading cannabis retailers, and LPF JV Corporation (“Loudpack”), the company behind several award-winning cannabis brands in California. The second tranche was made available upon the final closing of the three-way merger – Harborside’s acquisition of Urbn Leaf and Loudpack. The product was mainly used to repay certain existing loans and provide additional working capital.

Once the transaction is completeHarborside will be renamed StateHouse Holdings and trades under a new symbol – CSE: STHZ, subject to approvals.

“At such a crucial time in the evolution of the cannabis market, we are proud to provide our strategic partners with customized lending solutions to achieve their goals,” Dan Leimel, CEO of Pelorus Equity Group and manager of the Pelorus Fund said. “We were extremely pleased to close this financing with Harborside, Urbn Leaf and Loudpack to support their initiatives to transform the California market landscape, and we look forward to a strong partnership with them as they grow.”

Ed Schmuls, CEO and Director of Harborside, said, “Pelorus has been a tremendous financial partner as we work to achieve this important milestone. Their ability to provide access to tailored financing, along with in-depth industry knowledge and an in-depth network of experts is unparalleled. Their solutions have proven to us why so many leading players in the industry turn to them for cannabis finance solutions.

Funding Details

The rollup financing contains a nominal interest rate of 10.25%, as well as origination, closing and other specified transaction costs, and will be ssecured by certain real estate assets and cannabis licenses of Harborside, Urbn Leaf and Loudpack. In addition, the financing is subject to debt service ratio requirements, interest reserves, certain intercompany guarantees and defaults, subordination agreements and intercreditor agreements, and a general corporate guarantee. of Harbourside.

Merger Highlights

  • Oakland, Calif.-based cannabis company Harborside said its management believes the new combined company – StateHouse – will be the largest and most developed cannabis platform in the state of California.
  • It is expected to have the largest estimated annual revenue and the largest brand market share among its currently publicly traded California peers.. On a pro forma basis, management believes that StateHouse reportedly generated gross revenue of approximately $165 million for the first nine months of 2021 (including $57.8 million from Harborsides, $45.9 million from Urbn Leaf, and $61.4 million from Loudpack).

price action

port side shares closed Friday’s trading session up 6.38% at 50 cents per share.

Matt HawkinChairman of Harborside’s Board of Directors will be one of the speakers at the Benzinga Cannabis Capital conference in Miami. There is still time to register for the event which will host many big names in the cannabis industry. Click on here for more info.

Photo: Courtesy of Elsa Olofson on Unsplash

Carol M. Barragan