TILT Holdings Secures Funding to Develop Vertical Strategy in Pennsylvania

PHOENIX, May 09, 2024 (GLOBE NEWSWIRE) -- TILT Holdings Inc. (“TILT” or the “Company”) (Cboe: TILT) (OTCQB: TLLTF), a global provider of cannabis business solutions including inhalation technologies, cultivation, manufacturing, processing, brand development and retail, announced today that an experienced retailer and operator (the “Lender”) will lend capital to TILT’s Pennsylvania subsidiary, Standard Farms (“Standard Farms”) in order for Standard Farms to construct and operate dispensaries under Pennsylvania’s Senate Bill 773. Under the Commonwealth of Pennsylvania’s (the “Commonwealth”) Medical Marijuana Program, independent cultivators can apply for one permit that will allow for three dispensary locations.

“We applaud the Commonwealth for providing a positive path forward for a small independent grower like TILT’s Standard Farms to compete in this vibrant marketplace,” stated TILT Chief Executive Officer, Tim Conder. “We are thrilled to have reached an agreement with an experienced retailer and operator to help fund this undertaking and provide construction and operational guidance along the way to ensure our success.”

Standard Farms has been a grower and processor in the Pennsylvania market since 2019 and provides its own Standard Farms house brand and brand partner products such as Old Pal and Level to the majority of dispensaries across the state.

Under the terms of a Secured Promissory Note (the “Note”), Standard Farms can borrow up to $10,500,000. Proceeds from the Note will be used to construct dispensaries obtained via a permit issued from the Department of Health, Bureau of Medical Marijuana, of the Commonwealth. Standard Farms permit will allow the construction and operation of up to three (3) medical marijuana dispensaries in the Commonwealth (collectively, the “Retail Locations”). Proceeds from the Note will also be utilized for the initial setup and operation of the Retail Locations.

The Note will mature on December 31, 2027, and will initially bear interest at 20%. The interest rate will automatically increase to 30% upon Standard Farm’s opening a Retail Location and completing a first commercial sale in the Commonwealth (“Location Opening Date”). The interest rate will automatically increase to 40% six months after the Location Opening Date. No principal or interest payments will be due under the Note before the maturity date, and the Note may not be prepaid in cash or kind without Lender’s prior written consent.