09:04 AM EDT, 06/20/2024 (MT Newswires) -- Cronos Group ( CRON ) , a global cannabinoid company, was at last look up 1.3% in US premarket trade after saying Thursday that it has invested in Cronos Growing Co., a cannabis cultivation company in which Cronos ( CRON ) has a 50% ownership stake.

According to a statement, the investment will be funded by an additional credit facility provided by Cronos ( CRON ) and is intended to assist GrowCo's expansion of its purpose-built cannabis facility in Leamington, Ontario.

As part of the investment, Cronos ( CRON ) will provide a near US$51 million ($70 million CAD) secured non-revolving credit facility to Cronos Growing, which is not required to begin repaying the $51 million principal until the quarter after the commencement of sales from the newly constructed area, at which point principal repayment will be made quarterly.

The credit facility will mature 10 years after the start of sales from the newly constructed area in the second half of 2025. The credit facility is secured by all present and after-acquired property of GrowCo and its subsidiaries. The terms of the $105 million CAD credit facility that Cronos ( CRON ) previously made available to GrowCo remain unchanged.

Among other highlights related to the investment. Cronos Growing's board on July 1 will expand to five members, with three appointed by Cronos ( CRON ).

Additionally, Cronos ( CRON ) will have the option to buy up to 70% of the total production from the expanded facility after the first sales from the newly constructed area. Before the first sale of products from the newly constructed area, Cronos ( CRON ) will be able to buy about 80% of Cronos Growing's production.

Cronos ( CRON ) will consolidate the joint venture's results in its financial statements starting in the third quarter.