Forever Green to Fund Cannabis Farm in California With Bond

A U.K.-based firm is launching a bond of up to $65 million to acquire a property in California to produce legal, medical cannabis-related products, amid a flurry of investor interest in marijuana companies.

Forever Green Holdings U.K., which will make medical cannabis-related products, cannabinoid (CBD) oil and industrial hemp, is working with asset manager Shard Capital to launch a 10-year senior secured bond to acquire the 14,000 acre property in San Luis Obispo Country, the company said in an emailed statement. It’s also seeking to set up its own R&D division.

Investing in marijuana is becoming more mainstream. The London Stock Exchange has seen several cannabis-related listings this year, a few months after the British market watchdog cleared marijuana firms which produce the drug for medicinal purposes to float on the bourse. Medical pot was legalized in the U.K. in 2018 for a narrow set of purposes, but recreational use is against the law.

Forever Green will focus on “growing Medical Marijuana for the purpose of direct sales and R&D for expanding FDA-Approved prescription medicines for specific conditions in both humans and animals,” according to the statement.

It will also research and develop medications and treatments which contain CBD, and products made of industrial hemp, which can be used in construction and help reduce greenhouse gas emissions.

Shard Capital is acting as broker, custodian and placement agent for Forever Green’s Reg-S bond. Avenir Registrars are the issuers, registrar and paying agent of the bond.

“It’s a massive growth sector, with multiple uses from healthcare to beauty and building materials,” said Chris Woods, partner at Shard Capital, in a phone interview.

The coupon of the bond could be between 6% and 8%, although the terms have not been fixed yet, he said. The note will be privately placed and it’s mainly focused on institutional investors, with a minimum allocation of $1 million, although some elective professional investors might participate too, with a $250,000 minimum requirement, he added.

The firm opted for a bond over private debt because there are a few key institutional investors who have “strongly indicated they preferred a bond structure,” said Adrian Sender, also a partner at Shard Capital.

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