Advanced Cannabis Gets $30 Million of Credit as Pot Stocks Rally
Advanced Cannabis Solutions Inc. (CANN), whose stock has soared 447 percent this year, has obtained as much as $30 million in credit to help acquire properties that it will lease to marijuana growers.
The agreement provides the Centennial, Colorado-based company with $7.5 million through senior secured convertible notes sold to Full Circle Capital Corp, a closed-end investment company, the firms said today in a statement. The six-year obligation, which may be increased by $22.5 million, will be backed by real estate and require interest-only payments of 12 percent annually.
Investors have sent shares of marijuana-related businesses up as much as 1,700 percent since Colorado and Washington legalized sales to anyone 21 and older. Sales in Colorado began this month and Washington expects its retailers to join around June, according to Brian Smith, a spokesman for the State Liquor Control Board, which is overseeing the industry.
Eighteen states and the District of Columbia allow medical use of the drug, and 11 permit sales through dispensaries, according to the Denver-based National Conference of State Legislatures. National legalization has the potential to create a business with $35 billion to $45 billion of annual revenue, according to Bloomberg Industries.
Advanced Cannabis, which leases space to producers and vendors, has climbed to $17.78 as of 1:14 p.m. in New York from $3.25 at the end of last year. The company posted a $472,000 loss in the quarter ended Sept. 30, according to a Nov. 19 regulatory filing.
The U.S. Justice Department considers marijuana a controlled substance with no medical benefits, making banks reluctant to lend to such businesses for fear of violating federal law. President Barack Obama said the drug is no more “dangerous” than alcohol in an interview with the New Yorker magazine this month.
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