Varnum recently helped a Grand Rapids-based cannabis company close on a senior secured note with a federally-regulated commercial bank. The transaction is notable for the industry due to the relative lack of traditional bank financing available to cannabis companies in light of the illegality of cannabis under federal law.
Fluresh, one of Michigan’s largest vertically-integrated cannabis companies, recently closed on a senior secured note for aggregate gross proceeds of $25 million. Varnum also represented a real estate development company managed by a group of Fluresh’s founders, which closed on a $23 million senior secured loan as part of the same transaction. A press release issued by the company notes the unique nature of the transaction:
“Due to cannabis being classified as a Schedule I drug, businesses in this industry have had very little access to traditional banking services. These combined loans from an FDIC-insured bank are potentially the largest ever given to any marijuana related business (MRB), with one of the lowest interest rates recorded for a loan of this nature. MRBs are typically limited to only depository services through credit unions and some banks but have not had access to traditional lending.”
Varnum attorneys Mary Kay Shaver, Stacey George and Kim Baber worked closely with the Fluresh team to close the transaction.
More about the transaction can be found here: Mich. Pot Co. Nabs Financing With Federally Chartered Bank.