Background
A pioneer in retail cannabis in Canada
Prairie Cannabis is one of the original 51 retail cannabis licence holders in Saskatchewan and has been in operation since 2018. They are located in Prince Albert, Saskatchewan, which has a population of just over 35,000. Prairie Cannabis have been very successful over the first two years of legalization and have decided to expand their stores to other municipalities in the province, as well as Ontario and possibly British Columbia.
Challenge
Lack of alternative lending in the cannabis industry
For the first store that Prairie Cannabis opened they used personal funds that have long since been repaid to themselves. For their expansion, they wanted to use borrowed funds instead of tying up personal funds for another year again. Prairie Cannabis CEO continues “There are not many lenders willing to loan funds to the cannabis industry, including the credit union we have been dealing with since we received notice of the first licence in early 2018”. Merchant Growth has provided Prairie Cannabis with an opportunity to expand their business more rapidly than they otherwise might have been able to and allowed Prairie Cannabis to keep their personal funds freed up for other purposes.
“Merchant Growth has provided us with an opportunity to expand our business more rapidly than we otherwise might have been able to and allowed us to keep our personal funds freed up for other purposes.”
Jim Southam, President & CEO – Prairie Cannabis Ltd.
Solution
Merchant Growths flexible options for financing
The non-collateralized financing they have secured from Merchant Growth is more expensive than traditional financing options, but it allows Prairie Cannabis to hold onto their personal funds. It also sets a precedence in the lending sector for other cannabis retailers. Jim Southam, CEO of Prairie Cannabis concludes “The process was very efficient and straight-forward”.
Result
The opportunity to grow and scale our business
This financing will allow Prairie Cannabis to expand their brand in Saskatchewan and get two additional Prairie Cannabis stores open for business in Saskatoon in the next couple of months.
