AFC Gamma Provides Story of Maryland with $41 Million Senior Secured Credit Facility
Rhea-AI Summary
AFC Gamma, Inc. (Nasdaq:AFCG) has committed and funded $41 million to a senior secured credit facility for Story of Maryland, (Story MD), a leading vertically integrated cannabis operator in Maryland. This transaction has helped AFC exceed its 2024 goal of $100 million in new originations. Story MD plans to use the proceeds to refinance existing debt and provide working capital.
Daniel Neville, CEO of AFC, emphasized the company's focus on reinvigorating its origination engine and highlighted Story Cannabis as an example of Cannabis 3.0 lending opportunities. Jason Vedadi, CEO of Story Cannabis, stated that the financing will strengthen Story's balance sheet and support growth initiatives.
The credit facility consists of a first-lien term loan secured by Story MD's real property, cannabis licenses, and operations in Maryland. AFC Gamma, a commercial mortgage REIT, specializes in providing institutional loans to state law compliant cannabis operators in the U.S.
Positive
- Exceeded $100 million origination target for 2024
- Committed and funded $41 million to Story of Maryland
- Expansion of lending portfolio in the cannabis sector
- Secured loan with real property, cannabis licenses, and operations as collateral
Negative
- None.
Insights
AFC Gamma's
The loan structure offers strong risk mitigation through multiple layers of collateral protection - secured by real property, cannabis license value, and operations. This first-lien position places AFC at the front of the repayment line should any issues arise. The transaction's structure aligns with prudent lending practices in the specialized cannabis sector where traditional banking remains
From a strategic perspective, this marks AFC's second transaction with Story Cannabis, indicating relationship-building with established operators rather than one-off deals with unknown entities. This approach typically leads to lower origination costs and reduced credit risk through deeper operational understanding of repeat borrowers.
For investors, this transaction signals management's ability to execute on stated priorities, with CEO Daniel Neville specifically highlighting origination reinvigoration as a top objective. The deal contributes to AFC's core revenue-generating activities as a specialized REIT, potentially supporting dividend sustainability, though specific terms including interest rate and duration were not disclosed.
This
The Maryland cannabis market presents strategic value following its transition to adult-use sales in 2023, which significantly expanded the addressable market. Vertically-integrated operators like Story control multiple points in the value chain (cultivation, processing, retail), typically generating stronger margins and operational stability compared to single-segment businesses.
The refinancing component of this transaction highlights a broader industry trend where cannabis businesses are restructuring early, often higher-cost debt secured during formation phases. By providing this refinancing alongside working capital, AFC positions itself as a financial partner supporting the company's growth rather than merely a transactional lender.
The partnership represents a competitive advantage for both entities: Story gains access to institutional capital still scarce in cannabis, while AFC secures quality loan opportunities in a specialized niche where traditional lenders remain hesitant. For cannabis industry observers, this transaction demonstrates continued institutional confidence in well-operated cannabis businesses despite ongoing federal restrictions that limit banking options.
AI-generated analysis. How Rhea-AI works. Not financial advice.
Exceeds
WEST PALM BEACH, Fla., Oct. 07, 2024 (GLOBE NEWSWIRE) -- AFC Gamma, Inc. (Nasdaq:AFCG) (“Advanced Flower Capital” or “AFC”) today announced that it has committed and funded
“One of my top priorities since joining AFC has been to reinvigorate our origination engine, and I’m thrilled to announce that with this transaction, we have exceeded our 2024 goal of
“This financing further strengthens Story’s balance sheet by providing additional working capital and allows Story to fund additional growth initiatives. Story takes pride in providing quality service in all aspects of its vertically integrated operations to the Story patrons and this financing will help support that goal. Story is grateful to AFC for offering this opportunity, and Story looks forward to working together given AFC’s proven track record and sophistication in the industry,” said Jason Vedadi, Chief Executive Officer of Story Cannabis.
Advanced Flower Capital holds the entire credit facility for Story MD, which consists of a first-lien term loan secured by the borrower's real property and the value of its cannabis licenses and operations in Maryland. AFC Agent LLC serves as the agent for this transaction.
About Advanced Flower Capital
AFC Gamma, Inc. (Nasdaq:AFCG) is a leading commercial mortgage REIT that provides institutional loans to state law compliant cannabis operators in the U.S. Through the management team’s deep network and significant credit and cannabis expertise, AFC originates, structures and underwrites loans ranging from
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the company’s current views and projections with respect to, among other things, borrower activity and growth initiatives. All statements, other than historical facts, are forward-looking statements. Words such as “believes,” “expects,” “will,” “intends,” “plans,” “guidance,” “estimates,” “projects,” “anticipates,” and “future” or similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions and are not guarantees of future performance, conditions or results. Certain factors, risks and uncertainties discussed under the caption “Risk Factors” and elsewhere in AFC’s most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings, could cause actual results and performance to differ materially from those projected in these forward-looking statements.
Investor Relations Contact:
Robyn Tannenbaum
(561) 510-2293
ir@advancedflowercapital.com
advancedflowercapital.com
Media Contact:
Profile Advisors
Rich Myers and Rachel Goun
(347) 343-2999
afcgamma@profileadvisors.com
