Chicago Atlantic Real Estate Finance, Inc. Announces Second-Lien Financing of Thirty-Two Cannabis Retail Properties

July 13, 2026 - 22:01

Chicago Atlantic Real Estate Finance, Inc. has completed a financing transaction involving second-lien notes backed by a portfolio of cannabis retail properties. The deal, announced on July 13, 2026, saw the company issue 4,306,754 common shares at a price of $14.53 per share. In exchange, the company received approximately $62.5 million in second lien notes secured by 32 retail properties managed by Koach Properti.

The transaction represents a significant move for the commercial mortgage real estate investment trust, which focuses on lending to the cannabis industry. By converting debt into equity, Chicago Atlantic is adjusting its capital structure while maintaining exposure to the underlying real estate assets. The properties involved are spread across multiple locations, though the company did not disclose specific geographic details in the announcement.

Chicago Atlantic operates as a REIT that provides financing solutions to state-licensed cannabis operators. This deal allows the firm to strengthen its balance sheet by replacing debt instruments with common equity. The second-lien notes carry a subordinate position to any senior debt on the properties, meaning they rank lower in priority for repayment in case of default.

The issuance of shares at $14.53 each reflects the company's current market valuation and provides a direct mechanism for acquiring the notes without a cash outlay. For investors, the transaction dilutes existing shareholders but also removes the risk associated with holding the second-lien notes on the company's books. The move signals confidence in the long-term value of the retail properties, even as the cannabis industry faces ongoing regulatory and market challenges.