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UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported):
October 2, 2026
VIREO GROWTH
INC.
(Exact name of registrant as specified in its charter)
| British Columbia |
|
000-56225 |
|
32-0872782 |
(State or other jurisdiction of
incorporation) |
|
(Commission File Number) |
|
(IRS Employer Identification
No.) |
207 South 9th Street, Minneapolis, Minnesota 55402
(Address of principal executive offices) (Zip Code)
(612) 999-1606
(Registrant's telephone number, including area
code)
Not Applicable
(Former name or former address, if changed since
last report)
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b)
of the Act:
| Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
| N/A |
N/A |
N/A |
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the
Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company x
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
Item 1.01 Entry into a Material Definitive Agreement.
Needham Loan
On October 2, 2026 (the “Closing
Date”), Vireo Property Holdings, LLC (the “Borrower-Agent”), Vireo Property Holdings New York, LLC (“Holdings
NY”), Vireo Property Holdings Florida, LLC (“Holdings FL”), 256 County Route 117 Perth LLC (“NY PropCo”)
and 160 Comfort Road, LLC (“FL PropCo”), each a Delaware limited liability company (Borrower-Agent, Holdings NY, Holdings
FL, NY PropCo, and FL PropCo, collectively, the “Borrowers”) and each an indirect subsidiary of Vireo Growth Inc., a British
Columbia corporation (the “Company”), entered into a Loan Agreement (the “Loan Agreement”) with Needham Bank,
a Massachusetts commercial bank (the “Lender”), and the guarantors from time to time party thereto, providing for a term loan
in the aggregate principal amount of $60,000,000 (the “Needham Loan”).
In connection with the Loan
Agreement, on the Closing Date, (i) NY PropCo issued to the Lender a Gap Note in the principal amount of $11,000,000 (the “Gap Note”),
evidencing a new money advance by the Lender and secured by a Gap Mortgage granted by NY PropCo on the Perth Property (as defined below)
(the “Gap Mortgage”), (ii) in consideration for the repayment of the $49,000,000 Promissory Note dated May 26, 2026 (the “Seller
Note”) made by NY PropCo in favor of IIP-NY 2 LLC, a Delaware limited liability company (“IIP-NY”), a subsidiary of
Innovative Industrial Properties, Inc., IIP-NY endorsed to the Lender, without recourse, the Seller Note pursuant to an Allonge to Promissory
Note (the “Allonge”), and IIP-NY assigned to the Lender the mortgage securing the Seller Note pursuant to an Assignment of
Mortgage, and (iii) the Borrowers executed a Consolidated, Amended and Restated Promissory Note in the principal amount of $60,000,000
in favor of the Lender (the “A&R Note”), which amends, restates, consolidates and replaces, without novation, the Gap
Note and the Seller Note into a single debt in the principal amount of $60,000,000 for which the Borrowers are jointly and severally liable.
The Seller Note was previously disclosed in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission
(the “SEC”) on May 29, 2026. As a result of the foregoing, IIP-NY is no longer a lender to NY PropCo.
Interest and Fees
The Needham Loan bears interest
at a fixed rate of 8.50% per annum, computed on the basis of the actual number of days elapsed over a 360-day year. Any payment (other
than the payment due on the Maturity Date (as defined below)) not paid within five days after its due date is subject to a late charge
equal to 5% of the amount unpaid. The Borrowers paid the Lender at closing a fully earned, non-refundable commitment fee equal to 1.50%
of the $60,000,000 loan commitment, or $900,000.
The A&R Note requires
monthly payments of interest only for the first six months, beginning one month after the Closing Date, followed by monthly payments of
principal and interest in amounts sufficient to fully amortize the Needham Loan over a ten-year period. The entire outstanding principal
balance, together with accrued and unpaid interest, is due on April 2, 2034 (the “Maturity Date”). The Borrowers may prepay
the Needham Loan in whole or in part at any time upon five (5) Business Days’ (as defined in the Loan Agreement) prior notice to
the Lender, without premium or penalty, except that a premium equal to 3.00% of the outstanding principal amount applies if prepaid with
proceeds of a refinancing with a lender other than the Lender or its Affiliate (as defined in the Loan Agreement) on or before the first
anniversary of the Closing Date, 2.00% if prepaid after the first anniversary but on or before the second anniversary, and 1.00% if prepaid
after the second anniversary but on or before the third anniversary. No premium applies after the third anniversary or if the Needham
Loan is paid in full upon a Change of Control (as defined in the Loan Agreement).
Use of Proceeds
The proceeds of the Needham
Loan were used solely to fund (i) the refinancing of the indebtedness evidenced by the Seller Note, (ii) the acquisition by FL PropCo
of the real property located at 160 Comfort Road, Palatka, Florida 32177 (the “Palatka Property”), and (iii) a portion of
the costs and expenses incurred by the Borrowers in connection with the closing of the Needham Loan.
Security and Guarantees
The obligations of the Borrowers
under the Needham Loan are joint and several and are secured by, among other things, (i) a Consolidated, Amended and Restated Mortgage,
Assignment of Leases and Rents, Financing Statement and Security Agreement dated as of the Closing Date, granted by NY PropCo, encumbering
the approximately 389,000 square foot cannabis cultivation and production facility located at 256 County Route 117, Perth, New York, on
approximately 20.598 acres (the “Perth Property”); (ii) a Multi-State Mortgage, Assignment of Leases and Rents, Financing
Statement and Security Agreement dated as of the Closing Date, granted by FL PropCo, encumbering the Palatka Property; (iii) an Omnibus
Collateral Assignment of Agreements, Permits and Rights dated as of the Closing Date, by NY PropCo and FL PropCo, assigning to the Lender,
among other things, contracts, income, revenues, insurance and condemnation proceeds, permits, governmental approvals, licenses, warranties
and plans relating to the Perth Property and the Palatka Property; (iv) a Security Agreement dated as of the Closing Date, by the Borrowers
in favor of the Lender; (v) an Environmental Indemnity Agreement dated as of the Closing Date, by the Borrowers, as indemnitors, in favor
of the Lender; (vi) a Pledge Agreement dated as of the Closing Date, by the Borrower-Agent, Holdings NY and Holdings FL, pledging their
equity interests in the other Borrowers; and (vii) a Pledge and Hypothecation Agreement dated as of the Closing Date, by Vireo Health,
Inc., a Delaware corporation and wholly owned subsidiary of the Company (“Vireo Health”) pledging its equity interests in
the Borrower-Agent, in favor of the Lender. In addition, Green Dragon Florida LLC, a Florida limited liability company and indirect wholly
owned subsidiary of the Company (“FL Tenant”) guaranteed the obligations of the Borrowers on an unsecured basis pursuant to
an Unconditional Guaranty entered into as of the Closing Date in favor of the Lender (the “Unconditional Guaranty”). The Lender
may also debit the Borrowers’ deposit accounts maintained with the Lender, including an operating account and a reserve account,
for amounts due. The tenants of the Perth Property and the Palatka Property are Ace Heritage LLC, a New York limited liability company
and FL Tenant, respectively.
The liens securing the Needham
Loan on the Perth Property and the Palatka Property are senior to the liens securing the indebtedness (the “Second Lien Debt”)
owed to Chicago Atlantic Financial Services, LLC, as administrative agent (the “Second Lien Agent”), and Chicago Atlantic
Lincoln, LLC, as lender (the “Second Lien Lender”). The Second Lien Debt, in the original principal amount of $41,000,000,
is evidenced by a Subordinated Promissory Note dated May 22, 2026 by NY PropCo in favor of the Second Lien Lender and is secured by a
Mortgage, Assignment of Leases and Rents, Security Agreement, Financing Statement and Fixture Filing dated as of May 22, 2026 by NY PropCo
in favor of the Second Lien Agent and a Multi-State Mortgage, Assignment of Leases and Rents, Security Agreement, Financing Statement
and Fixture Filing dated as of October 2, 2026 by FL PropCo in favor of the Second Lien Agent encumbering the Palatka Property, and is
guaranteed on an unsecured basis by FL Tenant pursuant to a General Continuing Guaranty dated as of October 2, 2026 in favor of the Second
Lien Agent. These arrangements are subject to an Intercreditor and Subordination Agreement dated as of the Closing Date (the “Intercreditor
Agreement”) among the Lender, as senior lender, the Second Lien Lender and the Second Lien Agent, as subordinated lender, and the
Borrowers. John Mazarakis, a director and the Chief Executive Officer of the Company, is a partner of Chicago Atlantic Group, L.P., an
affiliate of the Second Lien Agent. Mr. Mazarakis disclosed his interest in the transactions, abstained from voting, and recused himself
from the resolutions of the Company’s board of directors approving the Needham Loan.
Covenants and Events of Default
The Loan Agreement contains
customary representations and warranties, affirmative and negative covenants, financial covenants and events of default for a loan of
this type. The negative covenants address fundamental changes, other indebtedness, liens, investments, restricted payments, changes to
tenant leases and material contracts, negative pledges, amendments of subordinated debt documents and sale-leasebacks, and require the
Borrowers to maintain special purpose entity status. Events of Default include nonpayment of principal or interest within three (3) Business
Days after when due or other sums within five (5) Business Days after when due, failure to pay at maturity, bankruptcy and insolvency
events, and covenant breaches which are generally subject to a 30-day cure but without a cure period for specified covenant breaches,
including breaches of the Debt Service Covenant, the Loan-to-Value Ratio and the Borrower Liquidity covenant (each as defined in the Loan
Agreement). Upon and during the continuance of an Event of Default, (i) the Needham Loan is subject to interest at a default rate equal
to the lesser of the interest rate then in effect plus 4.00% per annum and the maximum rate permitted by applicable law, and (ii) the
Lender may declare the Needham Loan immediately due and payable.
The foregoing descriptions
of the Loan Agreement and the A&R Note do not purport to be complete and are qualified in their entirety by reference to the full
text of those documents, copies of which are filed as Exhibits 10.1 and 10.2 to this Current Report on Form 8-K and are incorporated herein
by reference.
Item 1.02 Termination of a Material Definitive Agreement.
The information set forth in Item 1.01 above is
incorporated herein by reference.
As described in Item 1.01, in connection with the
closing of the Needham Loan, the Seller Note in favor of IIP-NY, as disclosed in the Company’s Current Report on Form 8-K filed
with the SEC on May 29, 2026, was repaid in full without prepayment penalty and as a result of the foregoing, IIP-NY is no longer a lender
to NY PropCo.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation
under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth
in Item 1.01 above is incorporated herein by reference.
As described in Item 1.01,
the Borrowers, each an indirect subsidiary of the Company, incurred a direct financial obligation under the Needham Loan in the aggregate
principal amount of $60,000,000. Upon an Event of Default under the Loan Agreement, including nonpayment, covenant breaches, material
misrepresentations, invalidity of loan documents or liens, unpermitted transfers, bankruptcy or insolvency, cross-defaults under the documents
governing the Second Lien Debt, material contracts or other indebtedness in excess of $2,000,000, a Change of Control, a Material Adverse
Effect (as defined in the Loan Agreement), certain cannabis-law and governmental forfeiture events, uninsured final judgments in excess
of $2,000,000 in the aggregate, uninsured losses exceeding $2,000,000 in a fiscal year, or opening depository accounts elsewhere without
the Lender’s consent, and subject to applicable cure periods, the Lender may declare the outstanding principal, accrued interest
and all other amounts due under the Needham Loan immediately due and payable. The Lender may also enforce its rights against the collateral
securing the Needham Loan, including the Perth Property and the Palatka Property, against Borrower-Agent, Holdings NY and Holdngs FL under
the Pledge Agreement, against Vireo Health under the Pledge and Hypothecation Agreement and against FL Tenant under the Unconditional
Guaranty.
Item 7.01 Regulation FD Disclosure.
On October 5, 2026, the Company
issued a press release announcing the matters disclosed in this Current Report on Form 8-K, which is attached as Exhibit 99.1 hereto and
is incorporated herein solely for purposes of this Item 7.01 disclosure. Pursuant to the rules and regulations of the SEC, the information
in this Item 7.01 disclosure, including Exhibit 99.1, and the information set forth therein, is deemed to have been furnished and shall
not be deemed to be “filed” under the Securities Exchange Act of 1934, as amended.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. |
Description |
| 10.1+ |
Loan Agreement, dated as of October 2, 2026, by and among Vireo Property Holdings, LLC, Vireo Property Holdings New York, LLC, Vireo Property Holdings Florida, LLC, 256 County Route 117 Perth LLC and 160 Comfort Road, LLC, as borrowers, and Needham Bank, as lender. |
| 10.2 |
Consolidated, Amended and Restated Promissory Note, dated as of October 2, 2026, made by the Borrowers in favor of Needham Bank. |
| 99.1* |
Press Release, dated October 5, 2026. |
| 104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document). |
+ Pursuant to Item 601(a)(5) of Regulation S-K,
schedules have been omitted and will be furnished on a supplemental basis to the SEC upon request.
* Furnished herewith.
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
| |
VIREO GROWTH INC. |
| |
(Registrant) |
| |
|
| |
By: |
/s/ Tyson Macdonald |
| |
Tyson Macdonald |
| |
Chief Financial Officer |
| |
|
| |
Date: October 8, 2026 |
Exhibit 99.1
Vireo Growth Inc. Announces Financing for New York and Florida Cultivation Facility
Transaction supports ownership of key cultivation and production infrastructure in Two Core Markets
MINNEAPOLIS, Oct. 05, 2026 (GLOBE NEWSWIRE) -- Vireo Growth Inc. (CSE: VREO) (OTCQX: VREOF) (“Vireo” or the “Company”),
a leading cannabis company and agricultural markets platform, today announced that VIREO PROPERTY HOLDINGS, LLC, a Delaware limited liability
company (“Holdings”), VIREO PROPERTY HOLDINGS NEW YORK, LLC, a Delaware limited liability company (“Holdings NY”),
VIREO PROPERTY HOLDINGS FLORIDA, LLC, a Delaware limited liability company (“Holdings FL”), 256 COUNTY ROUTE 117 PERTH LLC,
a Delaware limited liability company (“NY PropCo”), and 160 COMFORT ROAD, LLC, a Delaware limited liability company (“FL
PropCo”, and together with Holdings, Holdings NY, Holdings FL and NY PropCo, collectively, the “Borrower”), have entered
into a US$60 million real estate financing (the “Loan”) with a U.S. commercial bank and institutional lender, related to the
cannabis cultivation and production facilities located in Johnstown, New York and Palatka, Florida (collectively, the “Properties”).
Approximately US$49 million of the financing proceeds are being used to refinance existing senior debt that was entered into in connection
with the previously announced option to purchase the Johnstown facility and approximately US$11 million of the financing proceeds are
being used to finance the acquisition of the Palatka facility. The Palatka facility is a significant cultivation and production asset
supporting the Company’s Green Dragon operations and is an important component of Vireo’s strategy to build scale and strengthen
its vertically integrated platform in Florida. The Palatka facility was previously leased from Rainbow Palatka FL LLC (“Rainbow”).
In connection with the acquisition of the Palatka facility, the existing lease with Rainbow will be terminated and a new lease with Green
Dragon Florida LLC, an affiliate of Vireo, will be executed. The US$60 million loan bears interest at 8.5% per annum and matures on April
2, 2034. The Loan is secured by a first-priority mortgage on the Properties, a first priority pledge of membership interests by each of
Vireo Health Inc., a wholly owned subsidiary of Vireo, Holdings, Holdings NY and Holdings FL in their respective wholly owned subsidiaries
comprising Borrower, a security interest in substantially all personal property of the Borrowers and other loan parties and is subject
to customary terms and conditions.
“This $60 million credit facility is an important milestone for Vireo and directly supports our strategic growth plans,” said
Tyson Macdonald, Chief Financial Officer of Vireo Growth. “The facility carries an 8.5% interest rate, among the most attractive
rates in the cannabis sector, and reflects the strength of our business and continued access to institutional capital as we execute on
our growth strategy. We look forward to working with the lender as a long-term banking partner for our future capital needs.”
Additional information regarding the financing and its material terms and conditions will be included in the Company’s regulatory
filings.
About
Vireo Growth Inc.
Vireo Growth Inc. (CSE: VREO; OTCQX: VREOF) is a leading vertically integrated cannabis company building a broad platform across cannabis
and adjacent agricultural markets. The Company operates cultivation, manufacturing, retail dispensaries, home delivery, distribution,
and agricultural supply businesses across the United States, creating exposure to both cannabis and complementary adjacent markets. With
operations in 10 states and more than 170 dispensaries nationwide, Vireo combines disciplined capital allocation, strategic acquisitions,
and local market execution to scale its platform and drive long-term shareholder value. The Company is focused on expanding market share
and strengthening its portfolio of consumer brands and services, while supporting the customers, employees, shareholders, and communities
it serves. For more information about Vireo, visit www.vireogrowth.com.
Forward-Looking Information
This press release contains “forward-looking information” or “forward-looking statements” within the meaning of
applicable United States and Canadian securities legislation (referred to herein as “forward-looking information”). Forward-looking
information contained in this press release may be identified by the use of words such as “should,” “believe,”
“estimate,” “would,” “looking forward,” “may,” “continue,” “expect,”
“expected,” “will,” “likely,” “subject to,” and variations of such words and phrases,
or any statements or clauses containing verbs in any future tense and includes statements regarding the expected benefits of the ownership
of the Properties; and the Company’s expectations regarding its ability to service the Loan. These statements should not be read
as guarantees of future performance or results. Forward-looking information includes both known and unknown risks, uncertainties, and
other factors which may cause the actual results, performance, or achievements of the Company or its subsidiaries to be materially different
from any future results, performance, or achievements expressed or implied by the forward-looking statements or information contained
in this press release and are, without limitation, based on the assumptions and subject to various risks as set out herein and in our
Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q filed with the U.S. Securities and Exchange Commission. Forward-looking
information is based upon a number of estimates and assumptions of management, believed but not certain to be reasonable, in light of
management’s experience and perception of trends, current conditions, and expected developments, as well as other factors relevant
in the circumstances, including assumptions in respect of current and future market conditions, the current and future regulatory environment,
and the availability of licenses, approvals and permits.
Although the Company believes that the expectations and assumptions on which such forward-looking information is based are reasonable,
the reader should not place undue reliance on the forward-looking information because the Company can give no assurance that they will
prove to be correct. Actual results and developments may differ materially from those contemplated by these statements. Forward-looking
information is subject to a variety of risks and uncertainties that could cause actual events or results to differ materially from those
projected in the forward-looking information. Such risks and uncertainties include, but are not limited to: risks related to the Company’s
ability to service the Loan; risks that the anticipated benefits of the ownership of the Properties may not be realized; the Company’s
ability to maintain relationships with suppliers, customers, employees and other third parties in connection with the Properties; the
nature, cost, impact and outcome of pending and future litigation, other legal or regulatory proceedings, or governmental investigations
and actions; risks related to the timing and content of adult-use legislation in markets where the Company currently operates; current
and future market conditions, including the market price of the subordinate voting shares of the Company; risks related to epidemics and
pandemics; federal, state, local, and foreign government laws, rules, and regulations, including federal and state laws and regulations
in the United States relating to cannabis operations in the United States and any changes to such laws or regulations; operational, regulatory
and other risks; execution of business strategy; management of growth; difficulties inherent in forecasting future events; conflicts of
interest; risks inherent in an agricultural business; risks inherent in a manufacturing business; liquidity and the ability of the Company
to raise additional financing to continue as a going concern; the Company’s ability to meet the demand for flower in its various
markets; our ability to dispose of our assets held for sale at an acceptable price or at all; and risk factors set out in the Company’s
Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, which are available on EDGAR with the U.S. Securities and Exchange Commission
at www.sec.gov and filed with the Canadian securities regulators and available under the Company’s profile on SEDAR+ at www.sedarplus.com.
The statements in this press release are made as of the date of this release. Except as required by law, we undertake no obligation to
update any forward-looking statements or forward-looking information to reflect events or circumstances after the date of such statements.
For Vireo, contact:
Lynn Ricci
Director Investor Relations & Corporate Communications
investor@vireogrowth.com
781-956-7052
