Sundial Growers Inc. (“Sundial”) is pleased to announce that it has entered into a definitive agreement with Cannabis Wheaton Income Corp. (TSX.V – CBW) (“Cannabis Wheaton”) for $7 million in non-dilutive debt financing. The funding will be used towards the expansion of Phase 2 of Sundial’s flagship facility in Olds, Alberta.
“We are moving fast to increase our production capabilities to meet the expected demand after the legalization of adult-use cannabis,” explained Sundial Executive Chairman, Ted Hellard. “We are thrilled to partner with Cannabis Wheaton, which has extensive experience in and commitment to the cannabis industry. This funding allows us to continue the expansion of our Olds facility without diluting share value for investors.”
Under the terms of the agreement, Cannabis Wheaton advanced $7 million to Sundial for a period of six months and this amount can be repaid either by a cash payment or through the delivery of an agreed volume of dried cannabis produced by Sundial or through a combination of cash and cannabis. If the financing is not repaid in full on or prior to the six-month maturity date, Sundial will have the option to extend the maturity date by a further six months upon paying Cannabis Wheaton a penalty amount.
The debt financing will be used to support the second phase of Sundial’s Olds expansion, where construction recently started and is expected to be completed by October 2018. Phase 2 will produce approximately 45 million grams of dry cannabis annually. The Olds facility will be purpose-built using a unique modular construction method that will allow Sundial to maximize yields by creting environments optimized for each strain. Once complete, the facility will consist of 60 individual climate controlled grow rooms, allowing the company to minimize the risk of contamination, pests and desease while maximizing yield.