Auxly Cannabis (XLY.V) and Trichome Financial (TFC.C) come to terms on an $8 million debt facility

debt
08/14/2020

Trichome Financial (TFC.C) and Auxly Cannabis Group (XLY.V) agreed to an $8 million debt facility today, according to a press release.

The financial allotment will be available to several of Auxly’s subsidiaries to finance their accounts receivable from Canadian distributors and other customers.

“This transaction represents a landmark for Trichome Financial as we have now officially welcomed third-party investors into Trichome Private Credit. Launching a fund for investors has been part of our strategy since inception, and we are thrilled to have executed on our plan in difficult market conditions. The Fund will offer greater financial flexibility for Trichome Financial to close on our pipeline of bespoke transactions and diversify our revenue base. We are excited to partner with Auxly given its strategy to differentiate itself though the production and sale of quality flower, edibles and vape products. We will continue to seek similar opportunities across the cannabis value chain with companies that can demonstrate a competitive advantage with a promising business model,” commented Michael Ruscetta, CEO of Trichome Financial.

The debt facility is being funded through Trichome Financial’s private credit wing, with the majority of contributors coming from third-party investors, along with the company’s $500,000 commitment. This is the first bespoke financing provided by Trichome Private Credit, which is a fund structured for high net worth investors. Trichome Financial is the fund’s general partner, and will carry all of the responsibility for facility servicing and administration, and also earn fees as administrator, originator and participant.

The details give Auxly up to $8 million of non-dilutive capital drawn against qualifying receivables, and with a maturity date set a year from now. Trichome will offer 80% up front, and allow Auxly to finance up to $10 million of accounts receivable.

—Joseph Morton

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