Chicago Atlantic to Buy BDC Peer in All-Stock Merger
The deal would create a scaled business-development company focused on cannabis and lower-middle-market lending while preserving credit quality and portfolio yield.
**Chicago Atlantic Real Estate Finance (REFI) agreed to acquire Chicago Atlantic BDC, Inc. in an all-stock transaction** designed to create a larger business-development company with enhanced growth prospects, the companies announced Wednesday.
The merger will exchange shares of REFI common stock for each share of Chicago Atlantic BDC based on the ratio of the two companies’ adjusted net asset values per share, both measured shortly before the expected fourth-quarter 2026 closing. No cash consideration or fixed exchange ratio was disclosed.
Management framed the deal as a way to unlock value that neither platform could achieve alone in the evolving cannabis-investment landscape. "The merger of REFI and LIEN brings together two platforms with a shared foundation of disciplined, senior secured lending to the cannabis industry and underserved segments of the lower middle markets," said Peter Sack, Co-Chief Executive Officer of REFI and Chief Executive Officer of Chicago Atlantic BDC. "For REFI, this transaction is a path to unlock value that would be difficult to achieve independently in the current evolving cannabis investment landscape. For LIEN, this transaction accelerates the core strategy."
Chicago Atlantic Real Estate Finance, a commercial-mortgage REIT, has built one of the largest institutional lending platforms focused on cannabis operators, with over $2.7 billion in loans closed since 2019 and a near-term pipeline of $462 million under evaluation. The company targets senior-secured loans of $10 million to $50 million with terms of two to three years, collateralized by real estate, stock pledges, and UCC-1 liens. Its portfolio yields approximately 16.9% and maintains real-estate collateral coverage of 1.1×.
The transaction follows a period of consolidation among specialty-finance platforms seeking scale amid regulatory uncertainty and competitive pressure in cannabis lending. REFI itself has been active in portfolio growth, reporting a $616 million pipeline at year-end 2025 and a 16.5% gross unlevered yield to maturity.
The combined entity will require approval from shareholders of both companies and customary regulatory clearances. REFI said it expects the deal to be accretive to distributable earnings and to preserve the high credit quality and yield profile that have defined its lending strategy.