Christina Lake Cannabis Replaces Director Credit Line at Lower Rate

Christina Lake Cannabis announced on November 3, 2026 that it had entered into a secured revolving credit facility of up to $1.5 million with an entity controlled by director Salvatore Milia. Its previous secured facility of the same size, provided by an entity controlled by director Mervin Boychuk, has been repaid in full.

The transaction replaces one director-related credit line with another without increasing the stated maximum amount. The announcement does not disclose how much has been drawn under the new facility or identify a specific use of proceeds, establishing the availability of credit and its terms rather than a disclosed amount of new borrowing.

Lower Rate and Longer Repayment Notice

The new agreement has a two-year term from the agreement date and carries annual interest of 14% on outstanding amounts. Milia’s entity can demand repayment with 90 days’ notice, while Christina Lake Cannabis can repay before the end of the term without penalty.

The earlier facility, announced on October 20, 2025, also had a two-year term and permitted penalty-free early repayment, but carried a 15% annual rate and allowed Boychuk’s entity to demand repayment with 30 days’ notice. The replacement therefore combines a lower stated interest rate with more advance notice before a lender repayment demand.

Other central features remain consistent. Both facilities are secured by a second mortgage on the company’s property at 775 Highway 395 in Christina Lake, British Columbia, together with a general security agreement. Neither is convertible into company securities.

Independent Approval and Closing

Because Milia is a director, the company treats the facility as a related-party transaction under Multilateral Instrument 61-101, formally titled Protection of Minority Security Holders in Special Transactions. At least two-thirds of the company’s independent directors approved the new agreement.

Christina Lake Cannabis is relying on exemptions from the instrument’s formal valuation and minority-shareholder approval requirements. The stated grounds are that it is not listed on a specified market under the instrument and that the facility’s fair market value does not exceed $2.5 million, alongside the independent-director approval.

The company did not file a material change report more than 21 days before entering the new facility. It said the details were settled only shortly before closing and that it wanted to complete the transaction expeditiously for sound business reasons, an explanation it considers reasonable in the circumstances.

The replacement gives Christina Lake Cannabis a lower stated interest rate and more time to respond to a repayment demand without increasing the disclosed credit limit. It remains secured, non-convertible, director-related debt. Despite the two-year term, the lender can still call the facility under the demand provision, so an early repayment demand remains part of the arrangement.