Chicago Atlantic Companies Merge to Boost Cannabis Lending

Chicago Atlantic Real Estate Finance, Inc. (REFI) and Chicago Atlantic BDC, Inc. (LIEN) have agreed to combine into a single public entity. The deal will see REFI transition from a real‑estate investment trust to a business development company and merge with LIEN in an all‑stock swap. After closing, LIEN will retain its ticker “LIEN” and continue operating as a BDC.

Merger Mechanics

• Approval: Both boards approved the merger unanimously after independent committees reviewed the terms.
• Share Exchange: REFI shareholders will receive LIEN shares at a ratio based on each company’s net asset value (NAV) just before the deal closes. With NAVs from March 31, 2026, REFI holders are expected to own roughly 50% of the new company.
• Valuation Targets: The combined firm aims for a pro‑forma NAV near $613 million and an investment portfolio of roughly $771 million.

Strategic Rationale

• Broader Borrower Base: The merger expands the borrower pool, diversifying loan types—cash‑flow, real‑estate‑backed, and direct lending.
• Cost Savings & Liquidity: Management expects operational efficiencies, improved liquidity for investors, and higher earnings through smarter leverage use.
• Cannabis Market Growth: Peter Sack, who runs both companies, says the move will unlock value in the growing cannabis market and accelerate LIEN’s growth.
• Credit Quality: Executive Chairman Scott Gordon emphasized that the deal will enhance shareholder value, support earnings over time, and maintain strong credit quality.

Next Steps

• Stockholder Votes: The merger still requires shareholder approval.
• Regulatory Approval: Pending regulatory clearance and customary conditions.
• Closing Timeline: Expected in Q4 2026 if all conditions are met.
• Transaction Costs: REFI will pay $2 million toward transaction costs.

Advisory & Communication

• Key Advisors: Oppenheimer and Keefe, Bruyette & Woods.
• Conference Call: A joint call is scheduled for June 18 at 9:00 a.m. ET, with a webcast available online.

Focus & Investor Resources

Both companies specialize in lending to cannabis operators and other niche businesses. Investors can review detailed information in upcoming SEC filings, including proxy statements and prospectuses.