TGOD Aligns Critical C$103 Million in Funding

On the eve of its latest earnings report, and after facing recent market struggles, marijuana producer The Green Organic Dutchman Holdings (TGOD) (TSX:TGOD,OTCQX:TGODF) confirmed on Thursday (November 14) that it has obtained C$103 million in funding.

The new money, which was a recent cause of concern for the company, will arrive by way of three different phases: a sale-leaseback deal for its Ancaster Energy Center, a construction mortgage loan term sheet and a separate convertible equity note term sheet.

Brian Athaide, CEO of TGOD, said the method for the company to raise capital “despite recent headwinds affecting the entire sector” shows confidence from the firm’s financial partners.

TGOD investors have faced a harsh market in the late stages of 2019, with shares of the company taking a dramatic dip in October due to TGOD missing out on the financing needed to complete construction of two production facilities, one in Ontario and the other in Quebec.

With the new funds, the company now expects to complete construction of its processing facility in Ancaster, Ontario. TGOD is projecting that its products will hold distribution across Canada in 2020. 

The leaseback deal the company now has in place for its Ontario facility will secure proceeds of C$23 million. However, the new funding arrangements all carry similar warnings: the company cannot guarantee that each deal will close.

Athaide previously told BNN Bloomberg that the company required C$160 million in bridge financing to finish off its facilities.

Shares of the company opened Thursday’s trading session at C$0.94. However, TGOD quickly dropped after the opening bell and was down by 7.61 percent as of 10:53 a.m. EST to a price of C$0.85.

Over a year-to-date period, shares of TGOD have dropped in value by 68.16 percent.

In September, TGOD lost one of its key partners when Aurora Cannabis (NYSE:ACB,TSX:ACB) sold its remaining stake in the fellow producer.

“This is the right next step in the relationship as both companies mature and our respective strategies evolve,” Athaide previously said.

In a statement, Aurora CEO Terry Booth said his company’s interest in TGOD became irrelevant following Aurora’s all-share acquisition of Whistler Medical Marijuana.

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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.