Decibel Announces Closing of $61 Million Credit Facility with ATB Financial

Executive Summary

• Decibel Cannabis Company Inc. closed a $61 million financing package with ATB Financial and ATB Cormark Capital Markets, comprising term loans and a revolving credit facility.
• The new facilities extend debt maturities to February 2030, reduce 2026 payment obligations by $5 M, and provide additional liquidity for corporate development initiatives.
• The company is now free‑cash‑flow positive with no material near‑term debt maturities, positioning it for continued domestic growth and international expansion.

Key Details

• Total Facility Size: $61 million.
• First Lien Term Facility: $40 million; amortizing principal repayments during the term with a bullet payment at maturity; replaces prior Servus Credit Union loan due Jan 2027.
• Revolving First Lien Credit Facility: $10 million; $3 million available on close, remainder subject to satisfaction of conditions subsequent; provides flexible capital for corporate development.
• Second Lien Term Facility: $11 million; no net change to total liabilities but reduces other 2026 payment obligations; amortizing principal with bullet repayment at maturity.
• Interest Rate: Benchmark rate set by ATB plus a spread tied to funded debt‑to‑trailing‑12‑month adjusted EBITDA.
• Covenants: Includes normal‑course funded‑debt, fixed‑charge and minimum cash covenants; standard positive/negative covenants and events of default for similar loans.
• Security: First Lien Facilities secured by a first‑priority security interest over all Decibel assets (borrower) and material subsidiaries (guarantors); Second Lien Facility secured by a second‑priority security interest over the same collateral.
• Strategic Impact: Extends debt maturities to Feb 2030, reduces 2026 cash outflows by $5 M, adds up‑sized revolver for growth initiatives, and supports continued expansion of domestic ready‑to‑consume products and international AgMedica operations.

Notable Quotes

• “We are now free cash flow positive and without any material near‑term debt maturities… The Company remains well positioned to continue its leadership…” – Ben Sze, CEO
• “Our strengthened balance sheet will position the Company to pursue corporate development initiatives… we will be able to pursue opportunities that drive value while maintaining a debt‑to‑EBITDA ratio of less than 2.0x.” – Stuart Boucher, CFO