Acreage Holdings, Inc.  (ACRGF) stock tumbled over 9% after the company said it entered into a short-term definitive funding agreement with an institutional investor for a total of $15 million in gross proceeds. The terms for the loan is what rattled shareholders. It’s a four month loan with a 60% interest rate.

That type of loan is akin to a payday loan and means the company must have really needed the money badly if it was willing to take those terms. The loan is secured by the company’s cannabis operations in Illinois, New Jersey, and Florida, as well as it’s U.S. intellectual property.

If it can pay back the loan, In the event of default, the company is further obligated to pay to Lender an additional fee of $6 million. Acreage may pre-pay the note without penalty or premium at any time following the 90^th day following the closing. Acreage expects to use the proceeds for working capital and general corporate purposes.

This follows funding the company received earlier this month to receive up to $60 million. According to a company statement, the two funding agreements are as follows:

• A Standby Equity Distribution Agreement with an institutional investor, under which the company may, at its discretion, periodically sell to Investor, and pursuant to which the Investor may, at its discretion, require the company to sell to it, up to $50 million of the Company’s Class A Subordinate Voting Shares, no par value.
• Completion of a private placement offering, in which it issued $11 million in a principal amount under a secured convertible debenture, with gross proceeds to the Company of $10,000,000 before transaction fees.

The announcement comes on the heels of Acreage saying it expects to take an $80-$100 million charge  in the quarter ending March 31, 2020. In 2019, Acreage reported a net loss of $195 million, so it seems 2020 may be off to a rough start as well. Acreage is also late to file its first-quarter 2020 earnings report.