AFC Gamma, Inc. (NASDAQ:AFCG) announced on Monday that it has closed a new senior secured credit facility for Private Company Q and expanded its existing senior secured credit facilities for BeLeaf Medical, LLC and Sunburn Cannabis.

What Happened & Why It Matters

AFC said it has committed $11 million, with $4.3 million funded at closing, in a senior secured credit facility to Georgia-based Private Company Q which holds a Class 2 cannabis license. The funds would support the buildout of a cultivation and processing facility and the creation of two new dispensary locations in the Peach State.

The Florida-based company also committed an additional $5.5 million under the expansion of BeLeaf Medical, LLC's facility and holds the entire $26.1 million expanded credit facility. AFC Gamma first provided a credit facility of $23 million to BeLeaf in 2021. BeLeaf plans to partially finance the acquisition of two dispensaries in Missouri.

In addition, AFC said it has committed an additional $1.8 million under the expansion of Sunburn's credit facility and holds the entire $36.5 million expanded credit facility. The funds will partially finance the borrower's buildout of two new dispensaries and additional low-cost cultivation capacity in Florida. Daniel Neville, AFC Gamma CEO, recently said the company has "completed a $34.0 million debt investment in Sunburn Cannabis," during the first quarter of 2024.

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AFC said it will hold the entire credit facility for BeLeaf, Sunburn and Private Company Q, each of which consists of a first-lien term loan secured by all assets of the respective borrower. AFC Agent LLC served as an agent for these transactions.

Sunburn Cannabis' New Investment From Poseidon

Separately, Sunburn announced on Monday that its most recent capital investment from Poseidon, a leading venture capital fund focused on the cannabis industry and an early investor in Sunburn that made its initial investment in 2022.

In addition, Emily Paxhia, cannabis expert and Poseidon co-founder will join Sunburn's board of managers. The company owns and operates fourteen retail locations in Florida.

"Since our initial investment, Sunburn has become one of the leading players in the Florida cannabis market, continually ranked at or near the top of the state's sales rankings per store for most mg of THC sold as compiled by the Office of Medical Marijuana Use." Paxhia said. "Cannabis isn't easy, and Florida is no exception, especially as established operators compete on pricing strategies. Sunburn has leveraged its authentic story, experienced team, fantastic retail locations, and commitment to high-quality products to catapult themselves into the Florida market and we are excited to further support their growth."

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AFCG Price Action

AFC Gamma's shares traded 0.51% higher at $9.93 per share during the pre-market session on Monday morning.