CALGARY, Alberta, Sept. 05, 2018 (GLOBE NEWSWIRE) -- SugarBud Craft Growers Corp. (trading as Relentless Resources Ltd.) (“SugarBud” or the “Company”) is pleased to announce that it has entered into a commitment letter with Farm Credit Canada (“FCC”) for a credit facility in the amount of $17.65 million (the “Facility”) to fund an aeroponic cannabis cultivation facility at Stavely, Alberta (the “Project”) and is in advanced negotiations with another Canadian financial institution for a revolving working capital credit facility in the amount of $2.0 million (the “Revolver”) and syndication of the Facility.
Credit Facilities
FCC is a self-sustaining federal Crown corporation that reports to Parliament through the Minister of Agriculture and Agri-Food. FCC has over 1,800 employees, 100 offices across rural Canada and a $33 billion loan portfolio.
The Facility will be transformational to SugarBud and its ability to execute on its business plan. Under the commitment letter, FCC has agreed to provide the senior secured Facility on the following principal terms:
| Facility Tranche | Amount ($ CAD) | Amortization (Years) | Interest Rate | Purpose |
| 1 | $ | 11,650,000 | 10 | Option of either: (i) variable interest rate linked to Prime Rate Open; or (ii) Closed Fixed rate ranging from 1 year to 10 years at current market rates | Stavely, Alberta Phase 1 Cannabis Cultivation Facility |
| 2 | $ | 6,000,000 | 10 | Option of either: (i) variable interest rate linked to Prime Rate Open; or (ii) Closed Fixed rate ranging from 1 year to 10 years at current market rates | Construction Cost Overruns (if Applicable), Contingencies and/or Future Capital Projects |
The Facility and advances thereunder will be conditional upon, among other things, syndication of the Facility with another Canadian financial institution (who will lead the syndicate and fund approximately $8.0 million of the Facility), and SugarBud receiving requisite Health Canada licenses.
In addition to the above, SugarBud is in advanced negotiations with a Canadian financial institution for the Revolver in the amount of $2.0 million and syndication of the Facility.
The Facility and Revolver will be used to fund an aeroponic cannabis cultivation facility at Stavely, Alberta, which is currently under construction. Key specifications of the Project are as follows:
| Phase (#) | Layers of Flowering Canopy (#) | Flowering Canopy (Square Feet) | Estimated Capital Cost (Millions) | Estimated Annual Dried Cannabis Flower Production (Kgs) |
| 1 | 3 | ~34,000 | ~$14.0 | ~8,000 |
| 2 | 3 | ~51,000 | ~$17.2 | ~12,000 |
| Total | N/A | ~85,000 | ~$31.2 | ~20,000 |
Including the Facility and the Revolver, SugarBud will have access to $19.65 million of credit facilities in addition to its current working capital of approximately $3.5 million and the proceeds from its previously announced rights offering which, if fully subscribed, will result in proceeds of $7.4 million. SugarBud is also pursuing equipment financing and other sources of non-dilutive capital with respect to certain components of the Project.
Mr. Craig Kolochuk, SugarBud’s President and Chief Executive Officer, stated: “Our ability to attract world class capital partners such as Farm Credit Canada speaks to our unique hybrid oil and gas and cannabis business model and the strength of our team. Looking back over the past five months, SugarBud has selected a top team, entered into an amalgamation agreement with a late stage ACMPR applicant, developed a high impact business plan (which includes the development of an innovative multi-layered aeroponic cannabis cultivation facility at Stavely Alberta) and achieved a path to retail distribution through its strategic alliance with Inner Spirit Holdings Ltd. We have now reduced our cost of capital to a level competitive with much larger cannabis peers and funded a large-scale, state-of-the-art cannabis cultivation facility. We are now focused on managing the construction of the Project to ensure that we come on-time and on-budget, obtaining our cultivation license from Health Canada and securing additional retail distribution agreements.”
About SugarBud Craft Growers Corp.
SugarBud is a Calgary based emerging cannabis and oil and natural gas company engaged in the development, acquisition and production of cannabis and natural gas and crude oil reserves in Alberta.
For further information regarding this news release, please contact:
Craig Kolochuk
President & Chief Executive Officer
SugarBud Craft Growers Corp.
Phone: (403) 875-5665
E-mail: craigk@sugarbud.ca | Jeff Swainson
Chief Financial Officer
SugarBud Craft Growers Corp.
Phone: (403) 796-3640
E-mail: jeffs@sugarbud.ca |
Investor Relations Contact
Gary Perkins, President
Tekkfund Capital Corp.
Tel: (416) 882-0020
E-mail: garyperkins@rogers.com
Website: https://www.sugarbud.ca/
Address: Suite 620, 634 6TH Avenue S.W., Calgary, Alberta T2P 0S4
Telephone: 4035324466
Fax: 5879559668